EXXON MOBIL v. SAUDI BASIC INDUSTRIES

Print this transcript Transcript: 

Argument of Gregory S. Coleman

Justice Stevens: We will now hear argument in Exxon Mobil against Saudi Basic Industries.

Mr. Coleman, I trust you will soon tell us why the case is not moot or whether you think it's moot, and if... if not, why not.

Mr. Coleman: Good morning, Justice Stevens.

May it please the Court:

I will begin with that, if you would like.

This case is not moot because there is an ongoing case or controversy between the parties.

There is a judgment, it is true, from the Delaware State court, which has now been affirmed by the Delaware Supreme Court.

But preclusion doctrines not Rooker-Feldman and not mootness govern the resolution of the claims that we asserted first--

Justice O'Connor: Well, what financial interests do your clients have to keep litigating today in another court?

Mr. Coleman: --I don't know the--

Justice O'Connor: What's going on?

I mean, it's very confusing.

Mr. Coleman: --Well, certainly, Justice O'Connor, we've not yet recovered on our judgment and that judgment is still there.

It is still in existence.

We've not yet collected on it.

But I don't believe that mootness turns on whether you have, in fact, collected on a judgment.

There are very few cases out there in which a party has, in fact, obtained two judgments, one from a State court and one from a Federal court, usually because a party waived the application of preclusion doctrines.

And... and we have conceded previously that that's not our interest.

What is our interest here is that we have asserted Federal jurisdiction.

This case was brought in Federal court by SABIC.

During the course of discovery, we found some things out that they had been overcharging us and we indicated that we were going to bring claims against them in Federal court.

They ran down to Delaware court by forum shopping in order to try to obtain a shorter statute of limitations, which turned out for them to be a strategic blunder of monumental proportions.

But the Federal case, when we filed it, those claims had original jurisdiction in Federal court.

They have not yet been resolved in a proper way.

We--

Justice Ginsburg: But do you have a continuing case or controversy?

That was... that... that's a bedrock Article III requirement, and if you've got all the relief that you were seeking... let's put it this way.

Suppose your opponent SABIC says, here's the check for the $417 million and we undertake that we're not going to pursue any further relief.

Would you have a case or controversy left?

Mr. Coleman: --Yes, Your Honor.

We might not have an interest in pursuing the case, but we have a legal interest in terms of Article III case or controversy.

It is well established that the... the fact of taking a judgment does not make a case moot.

In fact, if there were a holding that we think that the Federal case were moot--

Justice Ginsburg: But if you've got all the relief to which you are entitled, that does make a case moot.

Mr. Coleman: --In terms of cases that involve injunctive relief where it is impossible for a court to give you the relief that you have... that you are seeking, that is true.

But when you are seeking money damage, it is at least theoretically possible... we're not saying that we're going to ask for that, but at least theoretically possible that the Federal district court could still give us relief.

And therefore, what we are asking for is--

Justice Stevens: What relief could it give you?

Justice Souter: But what for?

Justice Stevens: What relief?

If you're paid in full, what... what relief are you entitled to?

Mr. Coleman: --Well, we think the relief that we're entitled to, in terms of this, is for the case to be remanded for the district court to resolve these issues under preclusion doctrines.

Justice Stevens: But what issues would... would the district court resolve?

Mr. Coleman: Preclusion.

Justice Souter: Well, if you win on the preclusion--

Justice Scalia: Who cares?

Justice Souter: --what do you get then in substance?

Mr. Coleman: We don't necessarily intend to take a... another judgment in Federal court.

Justice Souter: Then what do you intend to do?

If you win on preclusion, what do you do then?

Mr. Coleman: Well, hopefully we'll win on preclusion with respect not only to this suit, the New Jersey II suit, but also the New Jersey I suit, which we say the district... or the Delaware judgment precludes.

Justice Kennedy: Well, I think we'd like an answer.

Justice Ginsburg gives us... gives you a hypothetical case.

You've got the money.

The judgment has been discharged in the State courts.

What is left to do in the Federal court?

Mr. Coleman: It is likely--

Justice Kennedy: Now, the one answer I heard you give, well, we're interested in preclusion to say... well, that's all historical at that point.

Who cares?

Mr. Coleman: --It... it is likely, Your Honor... and we have previously said... that we may very well dismiss the case of our own accord.

But that doesn't mean--

Justice Kennedy: We're looking for... we're looking for something that makes the case live.

Mr. Coleman: --Our claims are alive.

There are claims there that seek relief--

Justice Kennedy: But we're... we're questioning why that is and we're asking you what relief you need to get that you wouldn't get in the hypothetical that Justice Ginsburg posed.

Mr. Coleman: --We thought we would not seek further monetary relief.

Justice Breyer: So what--

Justice Scalia: Do you know how many claims in this case that... that were not in the Delaware case?

Mr. Coleman: We have affirmative defenses to the New Jersey I, but... but the claims in New Jersey II and Delaware are the same, Your Honor.

Justice Kennedy: Is your answer that you might want equitable relief, an injunction to continue making payments in the future, or something like that?

Mr. Coleman: No, Your Honor.

We're not seeking additional monetary or equitable relief.

Justice Ginsburg: You... you would be stuck anyway because you made a counterclaim and... and it would be... on which you prevailed.

And in that counterclaim you would be precluded if you didn't ask for everything that you could get.

But... but at this stage at least, the... the door... there... there is still conceivably an avenue of further litigation because, SABIC hasn't yet said that it's not going to do anything more, that it isn't going to petition for cert, for example.

Mr. Coleman: And, indeed, Your Honor.

I mean, SABIC has represented to the Court that it likely intends to seek certiorari relief from this Court in the Delaware suit.

Justice Ginsburg: So it has--

Justice Breyer: --So if they do, it's not finished.

Mr. Coleman: It is not finished--

Justice Breyer: Yes, all right.

I'll ask them that.

Mr. Coleman: --Getting back to the Rooker-Feldman issue, which is the issue on which the Court granted cert, Rooker-Feldman is a narrow, limited doctrine, but it bars only appellate review not parallel litigation in Federal district courts.

Rooker-Feldman is not a theory of vanishing original jurisdiction, nor is it a jurisdictional substitute for the preclusion analysis mandated by Congress in the Full Faith and Credit Act.

The expansive interpretation asserted by SABIC misperceives the fundamental nature of appellate review.

It's untethered to any natural negative implication in 28 U.S.C. 1257.

It illegitimately displaces the application of section 1738, the Full Faith and Credit Act, in most cases to which it is traditionally applied, and it serves absolutely no useful purpose.

Justice Breyer: Well, the problem that bothers me... and I don't know that there's an answer to it... is you have plaintiff.

Plaintiff goes into State court.

He brings a lawsuit, a tort suit, a contract suit.

And then he decides he'd also like to go to Federal court.

He brings exactly the same suit.

And here we have two suits and exactly the same thing running along at the same time.

Now, I know there are principles from this Court's case law that says, well, that's what's supposed to happen.

They've always bothered me.

But now let's take a special instance.

The special instance is that in court one in the State, the plaintiff loses.

Now, what he decides to do is to say to the Federal court, we want you to review what they did in the State court.

Can't do that.

Right?

Mr. Coleman: Yes, Your Honor.

Justice Breyer: Okay.

So he brilliantly figures out I will omit the word review from my... from my motion.

I will ask for precisely the same thing just not use that word review.

I will ask them to go and make their decision which happens to be... in my opinion should be... 100 percent the opposite of what the State court did showing they're wrong.

But I won't use the word review.

Now, you say because he cut the word review out, he can do it.

Mr. Coleman: No, Justice Breyer.

It's not because he cut the review out.

Rooker-Feldman is an issue of appellate... the exercise of appellate jurisdiction.

So what does appellate jurisdiction mean?

Well, appellate--

Justice Ginsburg: --Mr. Coleman, would you clarify, I think, in response to Justice Breyer's inquiry?

Rooker-Feldman both involved State court litigation that was over and done with.

Then you come to the Federal court.

You have two parallel cases would be... brought within a month of each other?

Mr. Coleman: --Within 2 months of each other.

Within a month of each other, Your Honor.

Justice Ginsburg: And isn't the standard defense of the person who has started the other suit first, well, Your Honor, prior action pending, please hold the case that started second in abeyance till we get done?

And if we win in the first case, then it will be precluded.

Then the second case... the parallel case will be precluded.

That's not Rooker-Feldman territory.

Mr. Coleman: That's... that's... Your Honor, that's our position that... concurrent jurisdiction is a separate issue from the appellate review issue that Rooker-Feldman raises.

Justice Breyer, the answer to your hypothetical is that appellate review is something different from having a parallel action.

Appellate review is probably best defined by two characteristics that I'll try to flesh out for you.

The first is that the proponent alleges some sort of injury causing error by the trial court and not by the adversary and then seeks an order reversing, vacating, or otherwise nullifying that lower court order.

When a party alleges an injury by his adversary rather than the trial court, the most that can really be said is that you are continuing on a parallel litigation but not that you are seeking appellate review.

You do not have what looks like appellate review.

You're not alleging errors by the lower court.

You're not seeking an order that directly nullifies or otherwise undoes the State court judgment.

Justice Souter: No, but the argument... it seems to me the argument is that in a de facto sense, when you try to litigate the Federal case, after losing the State case, you in effect are asking the Federal court in some sense to review what happened in the State court.

Justice Ginsburg's answer to that is preclusion is the answer.

Is that your answer?

Mr. Coleman: Absolutely.

Justice Souter: Because if that... if that is... if we accept that as the answer, then there's no argument for saying you should expand Rooker-Feldman to include the de facto review as opposed to the... the very strict sense of review that you're talking about.

Mr. Coleman: That is absolutely our position, Justice Souter, that preclusion addresses all of these issues.

Justice Breyer: Well, but can you... can you expand on this a little?

I'm not taking a view on it.

I'm trying to clear up what's a confusion in my mind.

I see how you could do this on the parallel business with... with delaying it on the docket and using the doctrine of preclusion.

I understand that.

But we've still got this doctrine called Rooker-Feldman out there, and as long as you have that doctrine, it strikes me as odd if... say, it weren't a plaintiff.

Say it was the losing party, you know, that was asking the Federal judge, Judge, you have this case on your docket.

Let's move it up.

Let's decide it now.

He doesn't use the word review, but everything else is the same.

He wants a decision out of that court that is going to be the opposite of what the State court did.

And what's concerning me... maybe I shouldn't be concerned, but what's concerning me is whether he can get it or not seems to turn completely on whether he uses the word review in the petition.

Mr. Coleman: I don't... I don't think that that is true.

It should not and does not turn on the words that you use in your petition.

What it turns on is the fundamental nature of the injury that you claim and of the relief that you seek.

One reason why you don't need to be necessarily concerned about this is that in all of these cases in which one case has gone to judgment and there is a... either a continuation or a new case, preclusion is going to cover these.

The only extension of Rooker-Feldman that SABIC is asking for is what they call the actually litigated test.

That is the heart of the Full Faith and Credit Act.

Justice Ginsburg: Rooker-Feldman, if I understand it correctly, is a subject matter jurisdiction bar.

Is that--

Mr. Coleman: Yes, Your Honor.

It--

Justice Ginsburg: --Yes.

And--

Mr. Coleman: --it arises from a negative implication taken from section 1257 and a second negative implication from 1331.

Justice Ginsburg: --Well, to... so if the two lawsuits, the State court suit and the Federal suit... they're proceeding concurrently or one is held in abeyance waiting the other, there is certainly subject matter jurisdiction in the Federal court of the Federal action.

Mr. Coleman: Yes.

Justice Ginsburg: To apply Rooker-Feldman in that context would say you had subject matter jurisdiction at the outset, but then you lost it somewhere down the line.

Mr. Coleman: And... and... yes, Justice Ginsburg.

And that's a distinction between your hypothetical and Justice Breyer's.

Justice Breyer's, as I... if I understand it correctly, is that the Federal suit starts after the State court is done.

Yours is where you have parallel actions at the same time.

And where the Federal claims are parallel or even filed first, as in our case, you can't say that the moment you file those that you're seeking review of some nonexistent State court judgment.

You're simply asking for relief from something that your adversary did to you.

And the argument that SABIC makes that the court relinquishes jurisdiction has no basis or justification in anything this Court has ever said.

It is a theory of vanishing jurisdiction that I cannot understand.

Justice Kennedy: Suppose--

Justice Stevens: Mr. Coleman, can I interrupt with a question?

Mr. Coleman: Of course.

Justice Stevens: Is it your position that what should have been done in this case, not in the hypothetical case, is the trial court should have just stayed the action pending the outcome of the Delaware case?

Mr. Coleman: And, in fact, that's what the Federal district court had done, Your Honor.

Justice Stevens: And that's what... he did... that was correct.

Mr. Coleman: Yes, Your Honor.

Justice Stevens: And then when the Delaware case was over, then what should he have done?

Mr. Coleman: Well, we could either ultimately dismiss it or the Federal district court could say, looks like your Delaware case is over.

SABIC brings a motion--

Justice Stevens: And... and he has given you all the relief your entitled to.

Therefore, you go ahead and dismiss the case.

Mr. Coleman: --Yes, or SABIC brings a motion--

Justice Stevens: And therefore, my next question is why shouldn't we do exactly that now.

Mr. Coleman: --Because the question before the Court today is a question of jurisdiction, not of practical consequences other than the mootness question that SABIC has raised.

But practical consequences are that what we may do--

Justice Stevens: Well, maybe we could vacate the judgment of the court of appeals, say that was wrong, but still, order it dismissed after we vacate the judgment.

Mr. Coleman: --I think, as in Feldman, that's a question that should be first addressed by the district court.

Certainly we hope that you will vacate or reverse the Third Circuit's judgment and allow the district court to address those issues.

Perhaps we dismiss it.

Justice Stevens: But if you don't tell us what issue remains, I don't know why we shouldn't just direct the suit to be dismissed.

Mr. Coleman: There... there is a live... in... in the terms of Article III, there are live claims that remain pending before the district court.

And while it is true--

Justice Souter: And I take it that's because you don't have the cert period expired yet in the first action and you don't have the check.

Mr. Coleman: --At the very minimum--

Justice Souter: Okay.

It's... if the 3 months is expired and the check is in your hand and it's certified, what's left?

Mr. Coleman: --As a practical matter, we have no intention.

As a jurisdictional matter, there's still--

Justice Souter: I'm not asking about your intention.

Let's assume you do intend to litigate further.

What for?

Mr. Coleman: --If we did intend to litigate further, SABIC would be entitled to go to the district court and say they can't.

They are precluded.

Justice Souter: I want... I want an answer to my question.

What are you going to litigate for?

What's left?

Mr. Coleman: Well, again, setting aside our intentions and hypothetically, there are cases in which--

Justice Souter: I'm talking about your case.

What's left?

Mr. Coleman: --We... we do not seek... will not seek any further review from the district court.

Justice Souter: Nothing is left.

Mr. Coleman: Yes, Your Honor.

Justice Breyer: Now, suppose you don't have the check.

What's left?

Mr. Coleman: Well, the case is still up in the air.

Justice Breyer: Why?

Mr. Coleman: Because--

Justice Breyer: You have a judgment.

Mr. Coleman: --the case... the case is not over.

Indeed, because the State--

Justice Breyer: I never heard of a case that isn't over until you get the check.

I thought the case is over when you have the judgment.

[Laughter]

And then if they don't give you the check, you have a different matter.

We have to get it enforced.

Mr. Coleman: --There is a different matter.

But as a matter of Article III jurisdiction, Your Honor, the... the mootness doctrine does not apply to a situation where you have a judgment and it doesn't necessarily apply the moment you get paid.

Justice Kennedy: --Suppose that you lost in the State court and the judgment is final.

You then go to Federal court.

Are... is there a context in which Rooker-Feldman might then be applicable?

This is all hypothetical.

Mr. Coleman: Our argument is that it would be applicable only if the injury that we claimed in our Federal suit was an injury caused by the State court... the court itself or the judge rather than our adversary and we sought relief from that judgment.

That would obtain the nature of appellate jurisdiction rather than we say, well, SABIC did us wrong, we'd like a judgment.

And then SABIC can come in and say, well, they're precluded.

They already tried that.

Justice Kennedy: In other words, if you had some ongoing relation and, in this hypothetical, the State court ruled against you and you went in to try to reverse that ruling, that would be... that would Rooker-Feldman.

Mr. Coleman: Yes.

If we alleged harm from the court and sought relief from the court's judgment.

Justice Ginsburg: There were only the two cases, Rooker and Feldman, that established this.

Mr. Coleman: Yes.

Justice Ginsburg: Has this Court ever said anything to suggest that Rooker-Feldman, as apart from preclusion doctrine, applies to parallel litigation instead of you go into Federal court after the State court is over and you're trying to undo what the State court did?

Mr. Coleman: I don't think this Court has ever held any such thing, and I think it would be inconsistent with at least Feldman itself.

The idea of... of appellate jurisdiction over the constitutional claims in Feldman that were held not to be barred comes down in the end... SABIC says, well, those claims weren't actually litigated.

But the opinion itself on page 467 points out that the Mr. Feldman had raised his constitutional claims in front of the D.C. Court of Appeals in terms of asking for his waiver.

And when I checked the oral argument transcript from the Feldman case, it was mentioned specifically in terms of Mr. Feldman had raised the constitutional claims in front of the D.C. Court.

And that's on pages 9, 14, and 16 of the LEXIS version of the oral argument transcript.

Justice Ginsburg: But there's no preclusion unless they're also decided.

Mr. Coleman: Yes.

Well, yes.

The district court could then decide whether in fact they were precluded, and... and it's likely that they were.

I didn't follow up on what happened when the case went back down on remand.

But the Court said, we're not going to decide that.

We will allow the district court to address that in the first instance.

And so we think that the actually litigated revision of Rooker-Feldman is simply inconsistent with Feldman itself, that it improperly displaces full faith and credit that is not true to the negative implication from section 1257 which has to be a very narrow implication, indeed, because 1257 gives this Court jurisdiction, and it's only appellate jurisdiction, to suggest that another court doesn't have that appellate jurisdiction must be... must be narrowly limited to the context, the type of lawsuits that this Court would seek, which is not simply they did me wrong, please... please give me money, but rather, that lower court erred.

It violated my rights.

It is structurally or in some... in violation of Federal rights or something that the court did and that you have been asked to fix.

That, we think, is consistent with the proper negative implication from 1257, but overrunning most of preclusion law simply is not.

For these reasons, we would ask the Court to reverse.

And, Justice Stevens, I would like to reserve the remainder of my time.

Justice Stevens: You may do so.

Mr. Castanias.

I hope you'll tell us also whether you think the case is moot before you're through.

Argument of Gregory Andrew Castanias

Mr. Castanias: Justice Stevens, and may it please the Court:

This case is moot.

There is nothing for Exxon Mobil to get at this--

Justice Breyer: Well, you're still asking for cert..

Mr. Castanias: --That's right, and that's--

Justice Breyer: Well, then why is it moot?

Because something could happen.

We might get this case in theory, take it on cert, and discover a jurisdictional problem that somehow destroys the case without a decision, and should that happen, there luckily for them they have this other case going.

So as long as... you're prepared, I take it, to say you're going to ask for cert If that's what you're going to say, I don't see how the case is over.

It's up to you.

Mr. Castanias: --Okay. Well, I'm... I'm not going to take the Hobson's choice, Your Honor, but I am going to tell you, first of all, that SABIC is going to apply for cert..

At least that's my current understanding.

And second of all, that shows why this case is not justiciable at this point because if the most likely event in the... in the event of this Court's review of the Delaware determination, is a reversal on a statute of limitations problem.

That's the reason this suit was brought as the, quote, insurance policy that the Third Circuit identified, which was if the Delaware Supreme Court or the Delaware Superior Court had kicked this suit on the ground of the 3-year statute of limitations... and if you look at page 20a of the supplemental brief, the corrected supplemental brief that we filed with the Court, including the Delaware Supreme Court's opinion, you'll see that they had a whale of a time getting over the plain language of their own statute.

Justice Breyer: All right.

If for... somehow you won on that, even though it sounds a little like a State law issue, but nonetheless, if you won on that and they reversed it as a statute of limitations, then what they're saying is, well, that's just why we filed in Federal court.

We didn't want the Federal court to review the State court.

We wanted our Federal court suit as an insurance policy in case something goes wrong with the State court suit.

It has nothing whatsoever to do with Rooker-Feldman.

It is parallel adjudication, just what he said.

Now, what's your response?

Mr. Castanias: My response, Justice Breyer, is twofold.

First of all, with regard to the mootness question, if that eventuality occurs, that's the time when there may be a justiciable issue for a Federal district court.

Not now.

We've been talking about ifs and hypotheticals and what may happen in the future.

Justice Ginsburg: Mr. Castanias, was there a proper case in the district court when the complaint was initially filed there some 2 months after you filed in Delaware?

Mr. Castanias: We've never disputed that, Justice Ginsburg.

Justice Ginsburg: All right.

So you can bring two cases, identical cases, in two different courts, and that's an everyday thing, and the defense is prior action pending.

Mr. Castanias: Right.

Justice Ginsburg: Now, you are urging that Rooker-Feldman which this Court never applied when you had parallel litigation be extended into a domain which is ordinarily taken care of by preclusion doctrine.

Why would you want to mix those two things up that now seem to me rather clear, that if you have Rooker-Feldman, when you rush into a Federal court and say, Federal court, undo that State court judgment, I don't like it?

Rooker was just a paradigm case of that.

Why would you want to spread that doctrine?

What is... what is there that preclusion doctrine doesn't accomplish?

Mr. Castanias: Well, Justice Ginsburg, preclusion doctrine may accomplish this in a certain number of cases, but I think it's important... and I think I have to correct my colleague on the other side here with regard to the state of the record.

Yes, there was a stay of the New Jersey II trial court litigation, but it wasn't because of the Colorado River application that we made.

In fact, if you'll look in the appendix to the petition--

Justice Ginsburg: Well, I'm not talking about anything fancy like Colorado River.

Prior action pending is a familiar defense.

You've got two actions.

They could even be in different districts of the same State and one says, Your Honor, this case started second, the other one is going forward, hold it in abeyance because there's a prior action pending.

That's not Colorado River abstention or anything like that.

Mr. Castanias: --Well, I... I think, Your Honor, you will see that that is a component of Colorado River, and that was part of the application that we made to the district court in this case under Colorado River.

And my only answer... the only reason that I'm bringing this up, Justice Ginsburg, is that if you'll look in the appendix to the petition for certiorari, you will see that SABIC, my client, made an application for Colorado River abstention, and the district court denied that.

The district court denied that in this case.

Justice Ginsburg: Well, sometimes district judges rule incorrectly, but... but what happened here is the district court case did not go on because the two of you, both sides, said, okay, the district court... they're all bollixed up with this Foreign Sovereign Immunity Act, so we're going to agree.

You agreed that the case would go forward in Delaware, the trial in Delaware.

Is that not so?

Mr. Castanias: Well, it was... it was... if you'll look at... I believe this is at page 8a of the addendum to the red brief.

You'll see that it was Exxon Mobil that pushed in Delaware, but that actually happened before the ruling on sovereign immunity, that... that they elected to go forward in Delaware.

Justice Ginsburg: Well, when you say they pushed in Delaware, you brought them into Delaware and a... in a reverse suit.

You wanted a declaration of nonliability.

Mr. Castanias: Right.

Justice Ginsburg: They brought their case for liability in the Federal forum.

They were forced by you into the Delaware forum, and now you're saying you were pushed, that Exxon pushed.

You brought the case in Delaware.

They didn't.

Mr. Castanias: We... that is true that we brought the initial case, but the case was eventually tried on their counterclaims.

The case was inverted to make them the party plaintiff.

They went first at trial and is it... at the page I cited to you, that was where they decided to go forward with the Delaware case.

Justice Ginsburg: But it was your preferred forum, not theirs.

When they filed their complaint, they filed it in New Jersey where they had a related case pending.

So you chose the forum.

Mr. Castanias: That... that is absolutely the case with regard to the Delaware matter.

But I think what your question is getting at... and I think I have to go back a couple of minutes in our colloquy here to talk about why abstention won't do the work in this case.

In the lion's share of cases, it probably will, Your Honor, but in this case it didn't.

And this brings me back to Justice Breyer's question which said... in which he said that... that concurrent jurisdiction has always bothered him because what you're ending up with is a race to judgment.

But it's important again, Justice Breyer.

It's a race to judgment.

Justice Breyer: Well, that's... you see, Justice Ginsburg answered that.

I... I mean, she wasn't answering my question, but she did say what was a perfectly satisfactory approach, that... that the second person says, you know, Judge, there's another one pending and the judge says, okay, we'll let that go first except in some unusual instance.

Justice Kennedy: Which happens thousands of times in... in all of the courts.

It's very common and I don't know why we're over designing this vehicle.

It's simply other action pending.

End of case.

Mr. Castanias: Justice Kennedy--

Justice Kennedy: Or end of argument, not end of case.

[Laughter]

Justice Breyer: So why isn't it that the end?

I mean, here it's not moot.

They filed the other action.

You point out that you not only think something could wreck the State claim, you would love it to wreck the State claim.

And... and therefore, they have this insurance policy in Federal court which they'll gear up if and when the State claim does get wrecked as you hope.

Mr. Castanias: --Justice Breyer, I think this is the point in the argument where I want to turn to the definition of review as this Court has... has put it forth in cases like ASARCO.

This is a case that Exxon Mobil dismisses in their reply brief as mere dictum.

I don't think that this... the discussion of Rooker-Feldman and the ASARCO case can be dismissed as dictum in that it was a specific response to a specific proposal by the United States appearing as amicus to dismiss the case for lack of standing and instead remit the plaintiffs to pursuing a second suit.

In that case, the Court wrote that to readjudicate... and I'm quoting here from the opinion, and I don't have the particular page here... to readjudicate the very same issues that were determined in the State court proceedings would be... again quoting... in essence, an attempt to obtain direct review of the Arizona Supreme Court's decision in the lower Federal courts.

In ASARCO, there was no reference to what the intent of the plaintiffs was.

There was no reference to what the timing of the lawsuits was.

It was simply that identical issues actually litigated.

Justice Ginsburg: So perhaps the Court, if it had been more cautious, would have spoken not in terms of Rooker-Feldman or review, but in terms of this matter has been decided.

It is claim precluded.

That's what preclusion doctrine is supposed to do.

So in that context, maybe this Court used the wrong word.

Maybe it should have said, you litigated it, it's over and done with, now it's precluded.

Why do you need to interject the word review?

Isn't that... unless you're going to say every time court A decides a case and then you're in court B and someone is raising the same claim, that is a review of court number one rather than you're precluded in court two because of what is... has been litigated and decided in court one.

Mr. Castanias: Well, first of all, Justice Ginsburg, I'm hesitant to say that this Court was incautious in its use of words.

This was--

Justice Ginsburg: It is sometimes.

Mr. Castanias: --But... understandably, but... but with regard to... with regard to Rooker-Feldman, it was not just... it was not just an accidental... incidental invocation of it.

It was the reason for the rejection of the argument.

The reason was not res judicata.

The reason was respect for the dignity of the State court's work in the case, and that's ultimately--

Justice Ginsburg: That's why one has preclusion because you are giving respect, full faith and credit, to a decision elsewhere.

That's what preclusion doctrine is all about.

We respect the judgment of the court that rendered it.

We, therefore, give it full faith and credit.

That's what preclusion doctrine is about, is about respect and credit.

Isn't that so?

Mr. Castanias: --That's... that's... that is... that is generally right, Justice Ginsburg, but at the same time, there... we all agree... Exxon Mobil, SABIC, and the decisions of this Court... that there has to be some overlap with regard to Rooker-Feldman and SABIC... and... excuse me... and... and preclusion doctrine.

The... the argument made by Exxon Mobil, which is, in essence, the same question you're asking me, would have destroyed any reason whatsoever for the Rooker and the Feldman cases, as well as the ASARCO case.

There's also a significant body of law that's body of law that's been built up over the last 85 years in the lower courts in... in this regard.

And--

Justice Ginsburg: But you--

Justice O'Connor: So some of the lower courts have given a broad interpretation to Rooker-Feldman and have turned it into something other than the narrower view of it.

And I think that's why we granted cert in this case, to decide whether to give it a broad or a narrow interpretation.

The Third Circuit applies a rather broad interpretation of it.

Mr. Castanias: --Well, I... I guess in that respect, Justice O'Connor, I disagree because the Third Circuit, admitted by its own words, applies a very narrow version of Rooker-Feldman.

And, in fact, using this case as the vehicle to decide this, the... the definition of Rooker-Feldman in this instance amounts to no more than barring jurisdiction in a second Federal suit over the identical claims.

This is not a case where you have to worry about claims that might have been brought, the sort of things that footnote 16 in Feldman dealt with.

Justice O'Connor: But maybe that isn't a proper application of Rooker-Feldman where the complaint is not about something the State court has improperly done.

Mr. Castanias: Well--

Justice O'Connor: It isn't.

And so in that sense, the Third Circuit has a rather broader view of it I'd say.

Mr. Castanias: --Well, to be sure, Justice O'Connor, the Third Circuit's view is broader than that which appears to be adopted by the Ninth Circuit, as well as the Seventh Circuit.

And I think this brings me back to the definition of review.

The... the Ninth and Seventh Circuits' views in our estimation are wrong because they strictly look to the subjective intent of the plaintiff and as to whether the plaintiff is, in fact, seeking reversal.

That... that's the term that's used in these cases.

Noel says seeking to set aside.

But section 1257--

Justice Stevens: Of course, that's the language that was used in both Rooker and Feldman too I think.

Mr. Castanias: --And that's because, Justice Stevens, that's... that was the particular fact pattern of this... of that case.

Justice Stevens: And that's the only fact pattern any of our cases have dealt with.

Mr. Castanias: That's... in the Supreme Court, that's right.

Justice Souter: And the... and the concern is I think... at least as I understand the... the concern with it, it... it boils down to something like this.

Somebody comes along and says, don't apply claim preclusion.

Don't apply it because, for whatever reason, there's this... there's something wrong here, and... and Federal court should determine the... in fact, the... the claim preclusion of the State judgment should not apply.

The answer to that is, look, that's an issue to be raised by way of appeal of your State judgment.

You don't appeal State judgments in Federal court.

Out.

There's no such claim being made here.

The only claim that's being made here or the only conceivable claim, I guess, that can be made here is that we might want to do some litigating in the Federal case after the State case is over.

There's no claim here that claim preclusion should not apply in that instance, and because there's no such argument that claim preclusion does not apply, the answer to the problem that you're worried about is simply claim preclusion doctrine.

There's no reason to add a perihelion or something onto Rooker-Feldman to deal with what is really a very simple problem and that is, if they try to relitigate anew in Federal court, as Justice Ginsburg says, you... you plead claim preclusion.

Simple.

Why do we need to complicate it beyond that simplicity?

Mr. Castanias: Well, Justice Souter, I... I don't have any qualms with the application of claim preclusion here.

The... the Third Circuit, though, was being... was being sensitive to the interests of the State courts, as well as sensitive to the fact that it had another jurisdictional issue in front of it, which was subject matter jurisdiction under the FSIA.

And I'm... I'm certain, as certain can be, that that court would have reached the same result if res judicata had been before it.

But the... the fact is that Rooker-Feldman is there and, again, as... as with my response to Justice Ginsburg earlier, your... your question would effectively rub out any need for even Rooker and Feldman themselves.

Justice Souter: Well, no, because the... it... it would not rule out the need to have some answer when someone in a Federal court comes along and says, don't apply claim preclusion, whatever the reason may be.

Don't apply the claim preclusion rules.

There's something unfair about doing it here.

The answer to that is, look, what you're really asking us to do, when you say don't apply claim preclusion, is to review what happened in the State court, and we don't sit as an appellate court on State courts.

So there's still something for Rooker-Feldman to do on, as it were, Justice... Justice Ginsburg's claim preclusion argument.

Mr. Castanias: Well, Justice Souter, I think again, with respect to the hypothetical that you've put to me, the claim preclusion is appropriately--

Justice Souter: It'll get the... it'll get the job done that you say will need to be done if you get to that point.

Mr. Castanias: --It... it should get the job done.

Justice Souter: Why won't it?

Mr. Castanias: Well, there... there are... first of all, there are no guarantees.

The... the preclusion doctrines are... are riddled with exceptions.

Justice Souter: Then... then you--

Mr. Castanias: The preclusion doctrine--

Justice Souter: --Then... then you appeal.

Don't ask for a new body of law.

Just say, look, you got the application of claim preclusion wrong in this case.

We're going to appeal.

Mr. Castanias: --I... I disagree, Justice Souter, that... that we're asking for anything like a huge, new body of law or that the Third Circuit was making a huge, new body of law.

Justice Ginsburg: --Well, you're asking us to extend Rooker-Feldman beyond where this Court has taken it, and if I recall correctly, you really didn't ask for this.

The Third Circuit injected Rooker-Feldman into the case.

Is that not true?

Mr. Castanias: Well, that's true, Justice Ginsburg, but it's true because of the briefing cycle.

When we briefed the case, there was no Delaware judgment.

And it was only on the eve of oral argument--

Justice Scalia: Mr. Castanias--

Mr. Castanias: --Yes.

Justice Scalia: --could... could I come back to mootness?

One... one could say that not only is claim preclusion the answer to Rooker-Feldman, it's also the answer to the asserted mootness here.

I mean, you... you don't have to move to dismiss it as moot.

All you have to do is move to dismiss because of a prior adjudication that has resolved this question.

Do you know of any case in which the existence of a prior judgment in another court has been held to render a suit that someone wants to press to get a second judgment moot?

I mean, you'd think there would be a case on that, and I suppose the reason there isn't is that because the other side is always going to plead res judicata.

Mr. Castanias: Well, or the other side is going to give up.

Justice Scalia: Or give up.

But is there any case in which mootness is established by the fact that there is a prior judgment of another court giving you what you are asking for from this Court?

Mr. Castanias: Well, Justice Scalia, in the... in the realm that we're talking about here, the Fourth Circuit's decision in the Friedman's case came to a mootness conclusion.

We've also cited in our brief... and I don't recall the names of them off the top of my head... two cases in which the Court either... either dismissed or remanded for consideration of mootness in light of another State court judgment.

So I think there is... there is a body of law, but I also know that it is... as recently as yesterday looking at Wright and Miller on this issue, that when complete relief has been accorded by another tribunal, that is the classic case of mootness.

Justice Scalia: Well, I... I don't know why... well, if it's... if it were so classic, there would be a lot of cases, and I don't... I'm not sure that any of yours are right on point.

And... and I think the reason is that you don't need it, that claim preclusion is... is the remedy for the party who wants to get out of it.

Mr. Castanias: Well, and again, I'm... I'm certainly not going to fight claim preclusion because this is a suit that should not be here.

This is... this has had moving parts since we... since the petition was granted with the Delaware Supreme Court ruling and now with yesterday's denial of reargument in the Delaware Supreme Court.

What--

Justice Breyer: Why is it moot?

Or even on... why does claim preclusion apply?

I mean, if you win, from what you've said... somehow convince us that this refusal to apply the State statute of limitations properly violated some Federal law, let's say... then that would show that the State statute of limitations applied and barred their claim.

Would that be sufficient to knock out the Federal suit too?

Mr. Castanias: --I'm not sure I understand the question, Justice Breyer.

Justice Breyer: I mean, is... does the State statute of limitations, if... if it applied to the State's case, does it also apply in the Federal cases, the identical ground that everybody agrees that the State statute governs?

Mr. Castanias: The... the... there could be... there could be issue preclusive grounds on such a ruling, Justice Breyer, but... but--

Justice Breyer: I mean, if you... if you win, then... then... if you win your State case, because of the argument you made, do you also automatically win the Federal case?

Is it the same issue?

Mr. Castanias: --I... I don't think I could say that at this point because--

Justice Breyer: So it may not be the same issue.

Then... then they say, okay, it's not going to be claim preclusion, and you'd have to say insofar as it's not the same issue, it's not claim preclusion.

And therefore, they could proceed with their Federal case, which is what they want to do I guess.

Mr. Castanias: --And... and that is a future event.

Justice Breyer: Yes.

So we can't say it's moot in any... and we can't say there's an alternative basis where they'd win, can we?

I mean, I'm saying... I'm thinking if we get into conference, we're discussing this case, and I say, well, I have to think this through, is it the case that if you're right and you end up winning in this Court, that their case in Federal court is over?

I think no, it may not be.

The answer is it may not be.

Then this is not moot at all.

This is not claim precluded at all.

They then might proceed with their Federal claim.

Mr. Castanias: Well, I... I guess, Justice Breyer--

Justice Breyer: Is that right or not?

Mr. Castanias: --I don't think it's right.

Justice Breyer: Because?

Mr. Castanias: And... and I think the reason it's not right is because that just shows that there's no live controversy right now.

That's a controversy that might happen in the future.

Justice Breyer: Oh, well, but that... that isn't fair to them because, for all I know, they filed the Federal case because there's a different statute of limitations, say, that governs it that will have expired if you don't let them file it by the time... until this whole thing is over.

They just wanted it as protection.

Mr. Castanias: Well, two answers to that, Justice Breyer.

First of all, that seems to be a... a place for State doctrines of tolling to apply, not Federal law.

Second of all, this Court in... in Heck against Humphrey, which we cited in our brief, solves this--

Justice Breyer: That's explaining the unclear by the incredibly hard to understand.

Mr. Castanias: --I'm sorry.

I'm sorry, Justice Breyer.

Justice Breyer: It's explaining the unclear by reference to the incomprehensible.

But go ahead.

[Laughter]

Justice Scalia: I think I wrote that opinion.

[Laughter]

Mr. Castanias: And indeed, you did, Justice Scalia.

Justice Scalia: I never did like it.

[Laughter]

Mr. Castanias: I... I've also gotten that impression.

But... but Heck I think teaches an important... Heck teaches an important lesson for this case as well, which is that Heck was just a suit for money damages, just like this suit.

And... and yet, this Court said that there's going to be no cause of action under section 1983 because of the intersection of 1983 and habeas.

Well, we have the same result here.

There should be no Federal court case here because of the intersection of section 1257--

Justice Ginsburg: No, no, because it's where you walk in the door.

And you started out by saying this case, I think as you must, was a proper Federal case.

It was properly filed in... and it was properly filed in Delaware.

So you can't talk about a case that says, if you've got this kind of case, you go in this door.

If that kind of case, you go in that door.

You have a case here that could go in either door, the Federal, the State.

The usual rule is, is it not, that if Federal jurisdiction attaches, it doesn't get lost because of subsequent events.

For example, if a defendant moves into the plaintiff's State and the only basis for Federal jurisdiction is diversity, subject matter jurisdiction isn't lost, is it?

Mr. Castanias: --No, and in fact, the case that's cited against us for that proposition, the Freeport-McMoran case, makes clear, in the portion of it not cited by Exxon Mobil, that that rule is limited to the diversity context.

And it's not... it... it does not have its genesis in statute, but it's in policy.

We don't want to keep people from moving across State lines.

We don't want to... want to impede their... their free movement.

So we're going to look at it at the time of filing.

But what we have here is a case where maybe it was original jurisdiction when the case was filed, but it's not original anymore.

Justice Ginsburg: Maybe.

It's not... it's not maybe--

Mr. Castanias: Well, in this case, yes.

In this case, yes.

But original jurisdiction when the case was filed but not anymore because there's nothing original about it.

Justice Ginsburg: --A case can become moot, but we've already expressed considerable doubt whether that is the fate of this case.

The notion... you used it derisively... the insurance policy.

Lawyers bring protective actions all the time, don't they?

There's nothing wrong with doing that.

Mr. Castanias: Well, I guess I come back to... to where I started with Justice Breyer on the... on the merits of the Rooker-Feldman issue this morning, which is that the concurrent jurisdiction is something to be dealt with.

This Court has an uneasy body of law in the abstention area dealing with the issue of concurrent jurisdiction, but what it doesn't have is anything that deals with judgments, once you get to a judgment.

Justice Stevens: May I ask you?

It's perhaps an unfair question.

The Chief Justice generally likes to confine our attention to cases of this Court rather than the courts of appeals for our primary guidance, and most of the Rooker-Feldman law is court of appeals law, as we... we both know.

Going back just to Rooker and to Feldman, those two cases, and putting aside ASARCO for a minute, which of those two cases do you think provides you the stronger support, if indeed any support, between Rooker and Feldman?

Mr. Castanias: Well, I... I would have to say that Feldman, of the two of them, is probably stronger support.

Justice Stevens: And that is the case in which the court of appeals was itself a party to the litigation.

Mr. Castanias: That's right.

But at the same time, the... the Rooker case also dealt with relitigation of the identical issues.

And if I could just sum up here, seeing that the light is on here, the issue in this case is limited to identical lawsuits, identical claims.

The Third Circuit's decision in this case, if it constitutes an extension of Rooker-Feldman at all, is only a modest extension because it recognizes, consistent with ASARCO, consistent with Heck, and consistent with the very notion, Justice Souter, of de facto appeals, not actual appeals, but de facto appeals being prohibited by the doctrine... it recognizes that claims actually litigated in a State suit to a judgment, if they are litigated anew in the Federal court, that is de facto appellate review.

The judgment of the Third Circuit should be affirmed.

Justice Stevens: Thank you, Mr. Castanias.

Mr. Coleman, you have 8 and a half minutes left.

Rebuttal of Gregory S. Coleman

Mr. Coleman: And I'll take just a few of them, Your Honor.

I believe the concession that the Federal court exercised original jurisdiction at the time our case was filed is an important concession because I simply do not see yet still any rationale for this idea of vanishing original jurisdiction.

I also see the concession made in response to... to your question, Justice Breyer, about what happens if they win on the statute of limitations issue.

Well, one of the cases they cite on page 12, footnote 5 of their brief, the Northern Natural Gas case itself makes clear... and there are other cases.

They went to Delaware to apply the Delaware statute of limitations.

They conceded in front of the Delaware Supreme Court that even if they had won that, it wouldn't bar another lawsuit in a different forum applying a different statute of limitations.

The only way they could even hope to get the shorter statute was in Delaware.

The Delaware statute would never apply to our Federal claims, so that if somehow it went back on that procedural ground, it would not bar a trial in Federal court.

We don't think that that's likely to happen, but that is another explanation yet of why it's moot.

We also cited to the Court the Male case.

It is an old case, but it does make clear that when there is the question of jurisdiction before the court and some other court rules on the merits, that does not make the case moot.

In fact, you really wouldn't have a need for claim preclusion if that were the rule in... in mootness, because once the case is final over there, they'd all be moot, and you wouldn't need to apply--

Justice Scalia: Well, that depends on who wins.

Mr. Coleman: --You're right.

Justice Scalia: I mean, if you lost in the other suit, your claim here wouldn't be moot.

I mean, it... it would be precluded, but it's certainly not moot.

Mr. Coleman: I... I think that's right.

I'd also like to address, just very briefly, the ASARCO question.

The language that the Court used in there we don't necessarily think was loose or inappropriate, Justice Ginsburg, and the reason was the Court cites at that point an amicus brief by the United States and it cites a particular footnote.

And what that footnote says is it's a recommendation that the mining company in that case could file a Federal lawsuit seeking a judgment that the invalidation of the statute was not necessary.

But by challenging the invalidation itself, that... that looks more like a direct challenge to the State court judgment.

It's not simply a relitigation.

So that behind the Court's language there... and of course, it was really just addressing standing.

It was not directly addressing Rooker-Feldman.

But the US's suggestion in that case was a suit challenging the State court judgment, and in that situation, it looks more like appellate review, more likely to infringe upon Rooker-Feldman-type interests.

In the end, we believe that preclusion doctrines adequately cover all of this, that it is not true--

Justice Stevens: --Mr. Coleman, I don't mean to take your time, but in the ASARCO case, was the State court judgment final at the time in dispute?

Mr. Coleman: --Your Honor, there's a question about that.

I mean, the Court kept jurisdiction, but there was a determination that the statute was invalidate... was invalid and then a remand back to the district court for further proceedings.

Justice Stevens: Because if the judgment were final, then that would fit right into your... your analysis, if the judgment of the State court were final.

Mr. Coleman: Yes, Your Honor, it would.

Justice Stevens: Yes.

Mr. Coleman: In the... at the end of the day, we believe that this Court's preclusion jurisprudence is not riddled with vagaries, that it's not difficult to understand, and that it's certainly not more vague or difficult than the borrowing that they are attempting to do to bring existing preclusion doctrines into... in order to expand Rooker-Feldman.

Preclusion is the answer in this case.

We believe that the district court should be permitted to address that in the first instance, and we would ask the Court to reverse the judgment of the Third Circuit.

Thank you.

Justice Stevens: Thank you, Mr. Coleman.

The case is submitted.

Unknown Speaker: The honorable court is now adjourned until Monday next at ten o'clock.

Print this transcript Transcript: 

Argument of Chief Justice

Mr. Justice: The opinion of the court in Exxon Mobil Corporation versus Saudi Basic will be announced by Justice Ginsburg.

Argument of Justice Ginsburg

Mr. Ginsburg: This case concerns what is come to be known as the Rooker-Feldman doctrine applied by this Court only twice in 1923 in Rooker v. Fidelity Trust Company then 60 years later in District of Columbia Court of Appeals v. Feldman.

In Rooker, the plaintiffs who had suffered an adverse judgment in State court thereafter filed suit in Federal District Court alleging that the State Court judgment was unconstitutional.

Plaintiffs asked the Federal Court to declare the state judgment null and void.

In Feldman, two plaintiffs brought Federal Court actions after the District of Columbia’s Highest Court denied their petitions to waive a court rule requiring D.C. Bar applicants who have graduated from an accredited law school.

In both Rooker and Feldman, this Court emphasize that appellate jurisdiction to reverse or modify a State Court judgment is lodged exclusively in this Court.

The plaintiffs in Rooker and Feldman had litigated and lost in State Court; their subsequent federal complains invited Federal District Courts to declare the adverse State Court judgments invalid.

We held such federal suits impermissible.

The question we confront, does Rooker-Feldman cover the case at hand.

The parties Exxon Mobil and Saudi Basic Industries became involved in the dispute about royalty charges for licensing certain manufacturing technology.

Saudi Basic preemptively filed a lawsuit in Delaware State Court seeking a declaration that the royalties were proper.

Two weeks later, Exxon Mobil countersuit in Federal District Court in New Jersey seeking to hold Saudi Basic liable for royalty overcharges.

The State Court case proceeded to jury trial resulting in a verdict of over $400 million for Exxon Mobil.

Before trial took place in the State Court, the Federal District Court had denied Saudi Basic's motion to dismiss the parallel federal suit.

After the Delaware Jury verdict, Saudi Basic pursued the interlocutory appeal from the Federal District Court’s refusal to dismiss the federal action.

Responding to that appeal, the US Court of Appeals for the Third Circuit on its own motion invokes the Rooker-Feldman doctrine.

The Court of Appeals did not question the District Court's possession of subject matter jurisdiction at the outside of the suit but held its federal jurisdiction terminated when the Delaware Court ended judgment on the jury verdict.

We granted certiorari in view of the contingent in lower courts regarding the proper application of Rooker-Feldman.

The Rooker-Feldman doctrine, we hold today, is confined to cases of the kind from which the doctrine acquired its name.

Cases brought by State Court losers complaining of injuries caused by State Court judgments rendered before the District Court proceedings, commenced and inviting the District Court to reject those State Court judgments.

Rooker-Feldman does not otherwise override or supplant preclusion doctrine or augments this circumscribed doctrines that allow Federal Courts to stay or dismiss proceedings in deference to State Court actions.

When there is parallel state and federal litigation, as there is here, the entry of judgment in State Court while the federal suit is underway does not trigger the Rooker-Feldman doctrine.

Under the Full Faith and Credit Act, once the State Court adjudication is complete, disposition of the federal action would be governed by state preclusion law committee or abstention doctrines may sometime require or permit a Federal Court to stay or dismiss a federal action in favor of State Court litigation but Rooker-Feldman does not come into play to halt federal proceedings simply because a State Court reaches the finishing line first.

Exxon Mobil plainly has not repaired to Federal Court to undo the substantial Delaware judgment in its favor.

Rather, it appears Exxon Mobil filed its federal suit to protect itself in the event it lost in Delaware on grounds such as the state statute of limitations that might not preclude relief in the federal venue.

A protected action of that order is entirely proper.

The Rooker-Feldman doctrine did not deprive the Federal Court or jurisdiction at the outset of Exxon Mobil’s action and the doctrine did not emerge later to vanquish federal jurisdiction after Exxon Mobil prevails in Delaware.

Because the Third Circuit misperceived the narrow ground occupied by Rooker-Feldman, we reverse that court’s judgment.

The decision is unanimous.