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Law students spend more time in their Civil Procedure classes on jurisdiction than on any other topic. Must a district court decide a motion to dismiss on subject-matter jurisdiction grounds before any other motion? Similarly, if a case involves a motion to dismiss on personal-jurisdiction grounds as well as a venue motion, must the district court decide the jurisdictional issue first? Subject-matter jurisdiction or personal jurisdiction? First, is the district court required to resolve a subject-matter jurisdiction issue before personal jurisdiction? The U.S. Supreme Court dealt with a divided, 9-7 en banc opinion issued by the 5th U.S. Circuit Court of Appeals that held that in a removed case the district court must decide the question of whether subject matter jurisdiction exists before determining a possibly analytically less difficult motion to dismiss for lack of personal jurisdiction. Marathon Oil Co. v. Ruhrgas A.G., 145 F.3d 211 (5th Cir. 1998). The 5th Circuit’s decision was contrary to years of practice in the federal courts, which routinely decided easier forum-dispositive issues before grappling with a more difficult subject-matter jurisdiction. However, the Supreme Court overturned this case in an opinion written by Justice Ruth Bader Ginsburg, unanimously holding that the personal-jurisdiction inquiry could precede subject-matter jurisdiction inquiry. Ruhrgas A.G. v. Marathon Oil Co., 526 U.S. 574 (1999). The court reasoned that: “The Fifth Circuit erred in according absolute priority to the subject-matter jurisdiction requirement on the ground that it is nonwaivable and delimits federal-court power, while restrictions on a court’s jurisdiction over the person are waivable and protect individual rights. Although the character of the two jurisdictional bedrocks unquestionably differs, the distinctions do not mean that subject-matter jurisdiction is ever and always the more ‘fundamental.’ Personal jurisdiction, too, is an essential element of district court jurisdiction, without which the court is powerless to proceed to an adjudication.” 526 U.S. at 584. Some courts have interpreted the Ruhrgas case liberally. For example, in Alpine View Co. v. Atlas Copco A.B., 205 F.3d 208, 213-14 (5th Cir. 2000), the court had to chose whether to resolve the subject-matter jurisdiction argument before looking at the personal-jurisdiction issue. The 5th Circuit decided that when judicial economy weighed in favor of resolving a personal-jurisdiction issue first, the district court did not abuse its discretion in deciding such matter first, whether or not the subject-matter jurisdiction issues could be considered particularly difficult. The Supreme Court has granted certiorari in a 3d Circuit case involving the question of whether a district court must establish that it has personal jurisdiction before deciding whether to grant a forum non conveniens motion (FNC). The courts of appeals have split on the issue. The 2d Circuit has empowered the district courts to grant FNC dismissals before deciding whether they have personal jurisdiction. In re Arbitration Between Monegasque de Reassurances S.A.M. v. Nak Naftogaz of Ukraine, 311 F.3d 488, 497-98 (2d Cir. 2002). See also In re Papandreou, 329 U.S. App. D.C. 210, 139 F.3d 247, 255-56 (D.C. Cir. 1998) (same), superseded by statute on other grounds. The 5th Circuit, however has held that personal jurisdiction must be determined before ruling on an FNC motion. Dominguez-Cota v. Cooper Tire & Rubber Co., 396 F.3d 650, 654 (5th Cir. 2005) (per curiam). The 7th and the 9th circuits have take the same approach as the 5th Circuit’s. See Patrickson v. Dole Food Co., 251 F.3d 795 (9th Cir. 2001), aff’d in part, cert. dismissed in part, 538 U.S. 468, 123 S. Ct. 1655, 155 L. Ed. 2d 643 (2003); Kamel v. Hill-Rom Co., 108 F.3d 799 (7th Cir. 1997). In the 3d Circuit case, Malaysia Int’l Shipping v. Sinochem Int’l, 436 F.3d 349 (3d Cir.), cert. granted, Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 127 S. Ct. 36 (2006), Malaysia International sued Sinochem for fraudulent misrepresentation. Sinochem moved to dismiss for lack of subject-matter jurisdiction, personal jurisdiction or FNC, and for failure to observe the rules of comity. The district court determined that there was admiralty jurisdiction over the case, but that there was no personal jurisdiction over Sinochem. Although the district court found that further discovery might establish personal jurisdiction, it declined to order jurisdictional discovery because it decided to grant Sinochem’s motion to dismiss on FNC grounds. Malaysia International appealed. The 3d Circuit agreed with the district court that the case was supported by admiralty jurisdiction. However, reminiscent of the approach of the 5th Circuit’s en banc opinion in Ruhrgas, the 3d Circuit ruled that the district court should have determined that it had personal jurisdiction before ruling on Sinochem’s FNC motion. Accordingly, in a 2-1 opinion, it reversed and remanded for a determination on the personal-jurisdiction issue. The 3d Circuit divided its analysis into two parts. First, it decided that forum non conveniens is a nonmerits grounds for dismissal. Second, it decided that a district court must establish both subject-matter jurisdiction and personal jurisdiction before ruling on a forum non conveniens issue. On the first issue, the 3d Circuit began by introducing the Supreme Court’s ban on courts assuming “hypothetical jurisdiction” to resolve a case on the merits. See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 101-02 (1998). A court must make an actual determination whether subject-matter jurisdiction exists before it may turn to the merits of a case. A year later, the Supreme Court concluded that this principle applied equally to personal jurisdiction because “personal jurisdiction, too, is an essential element of the jurisdiction of a district . . . court, without which the court is powerless to proceed to an adjudication.” Ruhrgas A.G. v. Marathon Oil Co., 526 U.S. 574, 584 (1999). As discussed above, however, the court held that the existence of subject-matter jurisdiction need not be decided before personal jurisdiction, because “it is hardly novel for a federal court to choose among threshold grounds for denying audience to a case on the merits.” Id. at 585. The 3d Circuit explained that while Steel Co. required rulings on subject-matter jurisdiction before rulings on the merits, the Ruhrgas court held that it did not dictate that a particular jurisdictional issue be decided first. The 3d Circuit adopted the categorization of a law professor to illustrate the principles of Steel Co. and Ruhrgas. See Scott C. Idleman, “The Demise of Hypothetical Jurisdiction in the Federal Courts,” 52 Vand. L. Rev. 235, 321 (1999). First, there are jurisdictional issues that must be addressed because Article III of our Constitution requires that they be addressed. Second, there are merits-related issues, which cannot be decided unless the court first verifies jurisdiction. The third category consists of two subgroups of issues: (1) jurisdictional issues that do not have to be reached before the merits, such as non-Article III issues such as statutory standing, and (2) issues that are neither jurisdictional nor merits-related, such as procedural, remedial or evidentiary issues. 3d Circuit notes another complex split in circuits Clearly, FNC is not a constitutional Article III jurisdictional issue, and therefore does not fit within the first category. With respect to the second and third categories, the 3d Circuit noted another complex split in the circuits, some finding that FNC dismissals are not merits determinations, while others found that they were. The 3d Circuit sided with the majority view that FNC is a nonmerits ground for dismissal. An FNC dismissal fits in the third category: FNC is a nonjurisdictional, nonmerits procedural issue. Thus, the 3d Circuit had to determine whether jurisdiction must be determined before FNC. The 3d Circuit held that the district court should have determined whether personal jurisdiction existed before dismissing on FNC grounds for two reasons. First, citing Supreme Court jurisprudence, the 3d Circuit noted that the nature and definition of FNC presumes that the court deciding that issue has valid jurisdiction and venue. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 504 (1947). The purpose of the forum non conveniens doctrine is to allow a district court to decline to exercise its jurisdiction, even though the court has jurisdiction and venue, if the convenience of the parties and the court, and the interests of justice, indicate that the action should be tried in another forum. Second, the 3d Circuit looked to the decisions of the 7th Circuit’s Kamel decision and the 9th Circuit’s Patrickson decision, and inferentially by the way the Supreme Court dealt with Patrickson, that determined that FNC dismissals are invalid if the district court does not have subject-matter jurisdiction. Rejecting the flexible approach of the 2d Circuit, the 3d Circuit decided to “go a more certain way. District courts either have jurisdiction to decide forum non conveniens motions or they do not. As such, we hold that they must have jurisdiction before they can rule on which forum, otherwise available, is more convenient to decide the merits.” Id. at 363-364. The 3d Circuit noted that it reached its holding with regrets, “as we would like to leave district courts with another arrow in their dismissal quivers.” It also recognized the inefficiency in its approach, but believed that it would reduce itself to a mere pundit if it were to permit the hypothetical jurisdiction prohibited by Steel Co. So, it invited the Supreme Court to resolve the issue. By June we will know whether the court will go the formal Steel Co. route, or the practical Ruhrgas route. Georgene M. Vairo is a professor of law and William M. Rains Fellow at Loyola Law School, Los Angeles. She is on the board of editors of Moore’s Federal Practice, and writes Moore’s chapters on removal and venue problems. Vairo can be reached at [email protected].

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