SINOCHEM INTERNATIONAL CO. v. MALAYSIA INTERNATIONAL SHIPPING CORPORATION
Malaysia International Shipping Corporation (MISC) owned a vessel carrying steel coils for Sinochem International, a Chinese company. Sinochem brought an action in Chinese Admiralty Court, alleging that MISC had backdated documents pertaining to the loading of the cargo, and seeking to have the ship detained in China. MISC filed suit in a Pennsylvania district court, accusing Sinochem of fraudulent misrepresentation. Sinochem argued that the U.S. had no personal jurisdiction over the Chinese company, but the District Court declined to rule on the issue. Instead the court dismissed the suit on grounds of "forum non conveniens," which means that the case could be more conveniently tried in another forum, in this case the Chinese Admiralty Court.
On appeal, the U.S. Court of Appeals for the Third Circuit reversed, ruling that the lower court should have first ruled on the jurisdictional issue. The Third Circuit acknowledged the inconvenience of determining jurisdiction before dismissing the case anyway, but nevertheless sent the case back to the District Court.
Does a district court have to establish its jurisdiction over a case before dismissing the suit on the ground that it should be argued in another court that is more convenient for the parties ("forum non conveniens")?
No. The Court ruled 9-0 that "a court need not resolve whether it has [...] personal jurisdiction over the defendant if it determines that [...] a foreign tribunal is plainly the more suitable arbiter of the merits of the case." The opinion by Justice Ruth Bader Ginsburg held that while the first step of a court is normally to determine whether it has jurisdiction, a court can dismiss a case for forum non conveniens without establishing subject-matter or personal jurisdiction. The Court held that determination of jurisdiction is only important when there is a chance that the court will rule on the merits of the case. When it is clear that the case would be more conveniently tried in a foreign court, a court should immediately dismiss for forum non conveniens rather than undergo a burdensome and unnecessary determination of jurisdiction before dismissing the case anyway.
Argument of Gregory Andrew Castanias
Chief Justice Roberts: We'll hear argument first today in case 06-102, Sinochem International versus Malaysia International Shipping Corporation.
Mr. Castanias: Mr. Chief Justice, and may it please the Court:
This Court in Ruhrgas against Marathon encapsulated the relevant line of this Court's precedents in the rule that we suggest controls in this case.
What it said, it is hardly novel for a Federal court to choose among threshold grounds denying audience to a case on the merits.
Now this Court's cases extending through Steel Company and Ruhrgas and afterward, hold true to this statement.
Threshold non-merits issues may be decided by a Federal court before it determines its jurisdiction, in that term meant as subject matter and personal jurisdiction.
This Court in this case should hold the forum non conveniens is another one of those threshold non-merits grounds for denying audience to a case that can be considered first before jurisdiction.
Adopting that rule in this case will do three things.
First, it will result in a rule that is most faithful to the Court's precedents in the area.
Second, it will respect the rule of Steel Company and forbid ultra vires judgments on the merits.
There is no chance that a dismissal in forum non conveniens will exercise more power than is granted to the Federal courts by Article III or by Congress in statutes.
And finally, it will give the Federal courts the appropriate flexibility in appropriate cases to serve important interests such as economy, constitutional avoidance, and particularly relevant in this case, international comity.
Justice Kennedy: Just on the second point.
I wanted... does the rule of the Federal district court in forum non conveniens where it dismisses a case for lack of a convenient form, does it have any ongoing consequences as the law of the case?
I know our Chick Kam Choo precedent where we said Federal court determination forum non conveniens is not binding in a state court, but supposing in this case that the parties went to San Francisco with a... and said we want to sue there.
Would the San Francisco court, the United States District Court feel bound by the determination that this dispute is determined by Chinese law, and that the Chinese court is therefore the appropriate court?
Mr. Castanias: Well, I think there are two components to your question, Justice Kennedy, and let me see if I can answer both of them.
The first is whether the determination that the Federal court in Philadelphia, for example, in this case, was an inconvenient forum.
Would that determination be binding on the court in San Francisco?
Our view would be probably not.
It would be persuasive in that case, but the forum non conveniens--
Justice Kennedy: What about the ruling that this would be governed by Chinese law and that the Chinese court is the best forum to consider that?
That too has no lat... has no effect beyond the court in Philadelphia?
Mr. Castanias: --Let me... that was the second part of your question that I was going to try to answer.
And with regard to that, I think that it would not have preclusive effect in the main... in the mine run of cases.
And the reason I think it wouldn't have preclusive effect is that it would be one factor in what this Court has described as a multifarious analysis under the forum non conveniens analysis at American Dredging, and so it would be hard to say that for issue preclusion, for example, that the choice of law determination in that case was necessary to the ruling dismissing the case.
Now one might imagine a case at the margins where that was the case and there might be a case for preclusive effect, but that's, I think, not likely to be presented by this case.
Justice Ginsburg: Do you know any case, Mr. Castanias, where there has been a forum non conveniens dismissal in favor of a foreign forum where the plaintiff has then attempted to go into a different--
U.S. court to get a different resolution?
Mr. Castanias: And by U.S. court you mean Federal court like Justice Kennedy's hypothetical, or perhaps a state court as well?
Justice Ginsburg: Either one.
Mr. Castanias: Well, I think I have seen cases, and I can't cite them to you as I stand here right now, where litigants have tried to go to a state court.
Another Federal Court, I can't think of a single one.
I'm hard pressed to.
Justice Ginsburg: You... you were urging that this is a threshold issue and it has nothing to do with the merits; but there is an argument that the existence of personal jurisdiction or not might have some bearing on the forum non conveniens evaluation.
Mr. Castanias: In some cases, I suppose that could be true, Justice Ginsburg; but the point of our rule is that the only issue presented by this case is that of Federal court power.
There may be a case where it is appropriate in the district court's discretion.
In fact in Ruhrgas, you writing for the Court pointed out that the normal court order business is to determine subject matter jurisdiction first and then personal jurisdiction.
But the point of our application of that rule in this case is there may be some cases where it's appropriate, and this is a paradigmatic example of the sort of case where it would be appropriate to decide the forum non conveniens issue first, before personal jurisdiction.
I hope that satisfies... I hope that's an answer to your question.
Justice Ginsburg: Uh-huh.
Mr. Castanias: With regard to the body of this Court's decisions, we cited in our briefs cases like Leroy against Great Western, which holds that a Federal court can decide venue before deciding personal jurisdiction.
In this case it's hardly different because again, as American Dredging pointed out, forum non conveniens is properly described as a supervening venue provision.
The Gold Law case which we cite in our reply brief, and the solicitor general relies on, says that Federal courts have the power to transfer a case before determining personal jurisdiction.
And grants even more analogous here are the extension in the Tenet case.
In the case of extension, extension documents have very similar, though different, moorings as the forum non conveniens doctrine.
And they're both discretionary decisions to decline to exercise jurisdiction.
This Court pointed out, citing the Ellis case, and it pointed this out in the Steel Company, Ruhrgas and Tenet cases that extension can be decided first.
And again, applying that precedent to the case of forum non conveniens, it's... it really does follow that forum non conveniens can be decided first.
With regard to the Tenet case, that case is very close to a merits issue, perhaps even one might call it a merits issue, but it was so threshold that it was appropriate to decide the totten bar that was at issue in that case before jurisdiction.
Again, and with all of these lines of cases, deciding forum non conveniens first will have... will provide no chance of the Federal court going beyond its constitutionally and statutorily exercised powers.
Now, I'd like to leave the Court with one final thought about the way this, and the importance of applying this rule in this case.
The complaint that Malaysia International Shipping makes against Sinochem is nothing more than a claim that Sinochem defrauded a Chinese court.
There is a term used in the complaint, a fraudulent misrepresentation.
The term negligent misrepresentation is also used.
But make no mistake about it.
The complaint in this case is that Sinochem made a misrepresentation to Chinese courts.
This is precisely the sort of interference with the Chinese court system which has proceeded to judgment, and judgment by the way on these issues in favor of Sinochem and against Malaysia International, that really cries out for the flexibility inherent in our rule.
Unless the Court has further questions, I'll reserve the balance of my time.
Justice Ginsburg: One question that doesn't even have to do with the issue before us.
I'm curious about why we're speaking of fora, judicial fora, there was in this picture an agreement to arbitrate.
What happened to that?
Mr. Castanias: I'm sorry, I didn't hear the last part of your question.
Justice Ginsburg: There was an agreement to arbitrate.
And we're talking about a suit brought by one party in the United States, by the other party in China, and no arbitration occurred apparently, although I thought the contract called for it.
Mr. Castanias: My understanding, Justice Ginsburg, and this is a vague recollection from one aspect of the record, is that the arbitration clause was held not to apply in this case.
Justice Ginsburg: Thank you.
Chief Justice Roberts: That's not an exercise of law declaring authority on the merits?
Mr. Castanias: Oh, I'm sorry.
To be clear, Mr. Chief Justice, it was not held by the district court in this case to not apply.
That issue was not in front of it.
But at the time--
Chief Justice Roberts: In other words, the district court didn't hold that it didn't apply?
Mr. Castanias: --Yes, correct.
I think, I think that, I think it was agreed by the parties or understood by the Chinese court.
My memory on this with regard to the record, maybe background facts that are not in the record but I, on summing it up, are a little be fuzzy.
But I think to answer your question, Mr. Chief Justice, there, in abstention, an... an arbitration clause I think provides a closer question than this case does for an issue of whether it's law declaring authority, I think as your question put it.
It's arguable that an arbitration clause is little more than a, in essence, a forum selection clause of the same kind that a venue provision or a forum non conveniens ruling might provide.
Justice Scalia: It might have been the allegedly defrauded Chinese court that found that the arbitration clause did not apply?
Mr. Castanias: I'm sorry.
The first part of your question I had trouble--
Justice Scalia: It might have been the allegedly defrauded Chinese court which found that the arbitration clause did not apply.
Mr. Castanias: --That... it may be.
I just, I don't have that ruling in front of me.
Justice Scalia: I don't see how that court would have gotten into the act unless that was the case.
Mr. Castanias: Again, we'll reserve the remainder of our time for rebuttal.
Argument of Douglas Hallward-Driemeier
Chief Justice Roberts: Thank you, Counsel.
Mr. Hallward-Driemeier: Mr. Chief Justice, and may it please the Court:
In Steel Company the Court held that it is impermissible to adjudicate the merits of a case over which the Court may lack jurisdiction.
But it is another thing entirely for the Court to decline to exercise jurisdiction that it might well possess.
In Ruhrgas clarified, in language that counsel has already quoted, that a court may choose among threshold grounds for denying audience to a case on the merits.
Now, the dividing line between a threshold non-merits ground and a merits ground may in some cases be difficult.
And the Court has... members of the Court have disagreed in some cases; but there is an easier set of cases and that is where the Court is declining to exercise jurisdiction and especially where as here, it is doing so in favor of litigation of the substantive dispute in another forum.
And this Court has... has decided already that it is permissible, for example, for a court to decline to exercise supplemental jurisdiction before deciding a difficult question of whether it would possess subject matter jurisdiction over the supplemental claims at all.
Forum non conveniens is in the nature of an abstention extension doctrine.
In Gulf Oil, one of the first cases of this Court to describe the forum non conveniens doctrine and its factors, analogizes forum non conveniens to a Burford abstention.
The Court even in Steel Company acknowledged that abstention on grounds of Younger, for example, would be permissible to decide before resolving a disputed question of jurisdiction.
Justice Ginsburg: But the Gulf Oil case does say that a forum non conveniens dismissal presupposes that the forum is one in which there's personal jurisdiction and one of proper venue.
It's just another forum is more appropriate.
Mr. Hallward-Driemeier: That's, that's right, Your Honor.
And the Court said so in the course of rejecting an argument that because it was conceded that jurisdiction and venue were proper in the Southern District of New York, that the doctrine of forum non conveniens could not apply.
The Court said that couldn't be so, because the doctrine of forum non conveniens presupposes the availability of two fora.
But the Court did not address the entirely separate question of whether the Court could assume that even I it had jurisdiction, it would not exercise it.
Justice Scalia: It was not, not--
I think all the Court was saying was that there would no need for a doctrine of forum non conveniens where there is no personal jurisdiction.
The only point of the doctrine is to get rid of the case where you... where you do have jurisdiction.
And so you do not have to... but that doesn't mean that you must establish jurisdiction before you can exercise the doctrine.
It is a doctrine that overrides the existence of personal jurisdiction.
In that sense, it presupposes personal jurisdiction.
Mr. Hallward-Driemeier: --That... that's right, Your Honor.
And in the court already determined it lacked subject matter jurisdiction or if venue was improper, then forum non conveniens would have no work to do.
But Gulf Oil certainly didn't address this question of the ordering of these restful matters.
And of course the doctrine of forum non conveniens, its entire purpose is to allow litigation to occur in a more convenient and appropriate forum, and it would undermine severely the purposes of the doctrine--
Justice Stevens: Do I correctly understand your argument to be that, that in this case it happened to be the doubt about personal jurisdiction rather than subject matter jurisdiction but you would make the same argument if it were a doubt about subject matter jurisdiction?
Mr. Hallward-Driemeier: --That's right, we would.
And, and one of the cases that Ruhrgas quoted and relies on was the D.C. Circuit's decision in... Papandreou, which involved subject matter jurisdiction under the Foreign Sovereign Immunities Act.
And there the Court quite rightly said that it would be improper to force a foreign sovereign to undergo extensive jurisdictional discovery in this case when it was clear that at the end of the day the Court would dismiss day in favor of a foreign forum in any event.
So it would apply to, to questions of subject matter jurisdiction as well as personal--
Chief Justice Roberts: Can a district court do both?
Can it say I've reached personal jurisdiction, I conclude that I, we do not have jurisdiction over this case?
And in the alternative be dismissed on forum non conveniens grounds if it turns out we do?
Mr. Hallward-Driemeier: --I think they could do both.
The second would be really superfluous.
Chief Justice Roberts: But not if there's, I presume, if there's an appeal.
Mr. Hallward-Driemeier: If... if... an appeal, the court could, the court of appeals could affirm on either ground.
Again, to emphasize the point that counsel has made, the argument here is not that forum non conveniens must necessarily be decided before jurisdictional questions.
In fact, the natural order would be to decide jurisdictional issues first.
But as the Court held in the analogous circumstance of venue in the Leroy decision, there are circumstances that counsel in favor of reversing that order, such as avoiding a difficult constitutional issue or, as in Mr. Papandreou, avoiding imposing the burden of jurisdictional discovery on a foreign sovereign or foreign entity when a case going to be dismissed in the end in any event.
If the Court has no further questions--
Justice Kennedy: In Martin, in the hypothetical where this case is dismissed for forum non conveniens and then they go to another Federal district court, could the second Federal district court say this has already been heard by the first district court; I'm not getting into it?
Or, or does that district court have, have to go through the motion again?
Mr. Hallward-Driemeier: --Well, I think the second court would have to at the very least ascertain that circumstances had not changed or that there weren't relevant difference of facts.
Your, your hypothetical earlier was of filing, refiling this suit in California.
Justice Scalia: Now, why is that?
Now... to some extent this is a call for the district judge.
There is a degree of discretion involved in it, and it's entirely conceivable that one district judge would correctly dismiss the case for forum non conveniens whereas another district judge faced with the same question would not do so.
And both of them would be acting lawfully; isn't that... isn't that conceivable?
Mr. Hallward-Driemeier: It is in the nature of a discretionary determination, as Your Honor says, that... that different judges could reach different decisions.
In the Parsons case, Parsons versus Chesapeake and Ohio Railway, the Court emphasized there the question was whether a state court's forum non conveniens determination had preclusive effect on a Federal court's analysis of the factors.
And this Court held that did it not.
In large part because it's impossible to know that every factor would be the same or would be weighed the same by the second court.
And so I think it would be open to the second court to, to reanalyze the issues; but even if it weren't, even if there were some preclusive effects, I don't think that that undermines our position, because it is, of course, equally true of other threshold determinations such as personal and subject matter jurisdiction that they may have issue-preclusive effects in subsequent litigations.
For example, a trial court could decide that it lacks subject matter jurisdiction because the amount in controversy is insufficient because under state law, the plaintiff would not be able to recover punitive damage.
That determination would be given issue-preclusive effect in a subsequent suit filed by the same plaintiff in another district court.
In fact Justice Scalia wrote an opinion on that subject in the--
D.C. Circuit in the Dozier versus Ford Motor Company.
Justice Ginsburg: Mr. Hallward-Driemeier, because your time is running out, there is a question about a court without personal jurisdiction dismissing on forum non conveniens ground, and that is, it's common, as you know, to condition forum non conveniens dismissals on the defendant's undertaking that the defendant will not raise the statute of limitations and other conditions.
If the Court has no personal jurisdiction over the defendant, it would be unable to impose such conditions; isn't that so?
Mr. Hallward-Driemeier: Our understanding of a conditional dismissal in this circumstance is that the dismissing court is explaining its understanding of the world, and that... and facts as they bear upon its analysis, such as is the defendant subject to jurisdiction in a foreign forum.
Oftentimes, the plaintiff... if I could answer... oftentime the plaintiff objects to dismissal because they can't sue the defendant in the foreign forum.
The defendant agrees to waive any objection to jurisdiction.
That understanding of fact is a condition of the dismissal.
If it later proves to be untrue because the defendant objects to jurisdiction of the foreign court, it would be open to the plaintiff to seek to reopen the first suit on that ground.
Thank you very much.
Argument of Ann-Michele G. Higgins
Chief Justice Roberts: Thank you, Counsel.
Mr. Higgins: Thank you, Mr. Chief Justice, and may it please the Court:
We believe that this Court should affirm the judgment of the Court of Appeals for the Third Circuit based on three reasons.
We believe that personal jurisdiction is a requirement articulated in Gulf Oil versus Gilbert which remains before this judicially created doctrine may be evaluated.
Second, we believe that adopting the Third Circuit holding establishes a clear, bright line discrete rule that is easy to enforce and appropriate to evaluate at any other appellate level.
And third, we argue that the nature of the doctrine of forum non conveniens itself presupposes jurisdiction before making a ruling to dismiss for some other convenient forum.
The analysis that has brought the case to this Court has included a divergence of opinions between various circuit courts.
In the briefing, all parties tend to agree that forum non conveniens is a non-merits-based ground for evaluating a ruling.
The Fifth Circuit has decided otherwise.
We, we express some issue with the fact that in looking at a forum non conveniens analysis, the Court necessarily, as the Government has conceded in its brief, takes a peek at the merits of the dispute.
The other issue that arises is that if a court dismisses a case based on forum non conveniens, and then an appeal is sought, the appellate court always has the opportunity to evaluate both the subject matter jurisdiction and the personal jurisdiction.
The Seventh Circuit in the Intek versus--
Engle case, came up with such a ruling recently.
They expressed support for the Second Circuit and the D.C. Circuit, saying that it is appropriate to be able to deal with non-threshold matters such as forum non conveniens without ascertaining jurisdiction.
In fact, the court acknowledged that they thought the dicta expressed in the Ruhrgas opinion would become the holding of this Court.
However, for judicial efficiency, it decided to go through the analysis to determine whether or not there was personal jurisdiction in the case.
It went through subject matter of the case and personal jurisdiction, and it determined that there was no jurisdiction.
Justice Scalia: Well, that only proved that an appellate court can affirm on grounds other than the ground relied upon by the district court, even if the ground relied upon by the district court is also a valid ground.
It's up to an appellate court... it's available to an appellate court, especially where the ground is jurisdiction, to choose to look into jurisdiction and say there isn't any.
I don't know, I don't know how that adds to your case.
Mr. Higgins: Justice Scalia, I think it's appropriate.
Both parties cite the vast waste of judicial resources that would occur if forum non conveniens had to establish personal jurisdiction first.
And frankly, we see that as the other way.
The Insight case in our opinion--
Justice Scalia: Well, you found one appellate court that chose to do it that way.
Frankly, if I were sitting on an appellate panel I wouldn't do it that way if I thought the forum non conveniens ground was valid.
Mr. Higgins: --Well, I tend to agree with you on that point as well--
Justice Scalia: Yes.
Mr. Higgins: --with it.
But I think what the Third Circuit was stressing in its opinion is that you cannot subject the parties to litigate in another forum if there is some chance that your own forum does not have the personal jurisdiction.
It is a prerequisite of the doctrine itself.
And we believe that--
Justice Stevens: May I ask this question.
We talk of course about the unnecessary burden on the litigants, but I wonder if there isn't even a more fundamental problem with the procedure that the Third Circuit followed here.
That is, is there really a case or controversy down there?
Does the defendant have any motivation to spend a lot of money fighting about jurisdiction when he knows that the case is going to be transferred anyway?
Is this a real live controversy on the issue that's left open?
Mr. Higgins: --I think it is, Justice Stevens, and I think the Court would address that by saying certainly on the negligent misrepresentation claim at this stage the record indicates that there was a ruling in China, but the appellate window is still open.
And certainly the evidence has long gone into the Chinese case.
Those are completely separate issues.
Justice Ginsburg: There couldn't be any question about the alternate forum taking jurisdiction here, because it, in fact, had.
A proceeding was ongoing in China.
So you brought up the question about the Court gives up... if the Court dismisses on forum non conveniens and then the supposedly more convenient forum doesn't take the case.
But that can't be a factor in this case, where the other forum was in China and was indeed litigating the case.
Mr. Higgins: Yes, Justice Ginsburg; but as practical matter, with the resolution of this case by this Court we would certainly have to start the process, whatever ruling this Court finds, all over again.
We certainly cannot participate in the action in China because that has already gone on.
We would have the option to participate in the case in the United States because those specific issues were not litigated in China.
Justice Ginsburg: I'm sorry.
I'm not following you, so please straighten me out.
I thought that the claim was that a fraud had been committed on the Chinese court.
Mr. Higgins: That is correct, Your Honor.
Justice Ginsburg: Your claim was that a fraud had been committed on the Chinese court in connection with the arrest of this vessel and the ensuing proceedings?
Mr. Higgins: That is correct, Justice Ginsburg.
Justice Ginsburg: Now, why in the world should a court in the United States get involved in determining whether a fraud was committed on a Chinese court?
Mr. Higgins: Justice Ginsburg, we believe it was appropriate for U.S. review because of the balancing of the maritime commerce that occurred in the case because of the bills of ladings.
Although the district court believed that Chinese law would apply to the contract for the sale of the steel coils, in fact we would make the argument that with the various charter parties in the case, including the bill of lading that you reference, indeed American law would apply and there would be some different issues that would be evaluated.
Justice Ginsburg: American law to determine whether a fraud had been committed on the Chinese court?
It seems just stating it that it might be offensive to the Chinese court to have another court determine whether it had been defrauded.
Mr. Higgins: That would have been a concern, Justice Ginsburg, except that issue was brought up expressly before the Chinese court; and if I may refer you to page 18 of the joint appendix, the Chinese court ruled that, quote,
"Given that the People's Republic of China and the U.S. are different sovereignties with different jurisdictions, whether the appellant has taken actions at any U.S. court in respect of this case will have no effect on the exercise by a Chinese court of its competent jurisdiction over said case. "
Justice Ginsburg: Well, that was a very polite way of the Chinese court saying: We don't care what the United States court is doing; we've got this case, we've got the ship, and we're going to adjudicate it; and it doesn't matter.
We don't have to say anything to the United States to chastise it for even thinking it could become involved in this matter.
It was polite.
Mr. Higgins: And I agree with you, Your Honor, except it is the only indication in the record that there is some foreign nation that has expressed an opinion on this.
If you read the brief by the Solicitor General, the Government would have us think that every single case is going to involve foreign nations and delicate foreign policy disputes and such other factors.
Very clearly, there is no such evidence in the record and the only evidence we do have is from another sovereign, China, that says if you have a U.S. cause of action we have no problem if a U.S. court adjudicates it on the merits.
Having said that, the issue here was whether or not personal jurisdiction should have been decided before the forum non conveniens.
And again, we would just go back to our second point, where the court believes that it can't evaluate a doctrine without having... if it's a required factor of the doctrine that a sitting court making a ruling on that issue has to presuppose personal jurisdiction.
Justice Scalia: Well, why... I mean, I assume that in deciding forum non conveniens... that there is an inconvenient forum, the court making that judgment would assume that there was personal jurisdiction and would simply say, you know, put that into the mix.
Assuming we have personal jurisdiction, is this nonetheless an inconvenient forum?
And if the court can say yes, that's the end of the game.
I don't see what you have to gain here.
Suppose the Court does decide that it has jurisdiction and dismisses for forum non conveniens?
What, what... what are you gambling for here?
I don't understand what's the... what's the desirable outcome you hope to achieve?
Mr. Higgins: Well, for Malaysia International the desirable outcome would be upholding the Third Circuit opinion.
It then gets remanded to the district court.
Justice Scalia: Right, and the district court at best for you, at best, finds personal jurisdiction.
If it finds no personal jurisdiction, you know, it dismisses for that reason instead of for forum non conveniens.
If it finds personal jurisdiction, it would say: Oh, there is personal jurisdiction; but I assumed there was personal jurisdiction when I dismissed it for forum non conveniens, so this is really the same call that I made before.
Dismissed for forum non conveniens.
Mr. Higgins: And Justice Scalia, I concede that, but you would also have the ability of the defendant to waive personal jurisdiction.
Again, you get into the judicial resources.
The defendant could choose to waive it at that point in time and then I am right back again--
Justice Ginsburg: Why would a defendant that has moved to dismiss for forum non conveniens waive jurisdiction?
It seems to me that there is something in this picture that is to your advantage and that is if you can get the Court to say, well, we have to do personal jurisdiction first, you ask for discovery on that issue and it goes out on forum non conveniens without deciding personal jurisdiction, you are not going to get that discovery.
Mr. Higgins: --That is correct, Your Honor, and then I would have to look for an evaluation of forum non conveniens that was favorable to the client.
That was one of the issues that we raised on appeal to the Third Circuit; and the court did not make a ruling on that.
Justice Scalia: Yeah, but discovery for its own sake is no fun.
What does discovery for its own--
Unless there's something at the end of the discovery.
Now, maybe what you hoped is that the Republic of China would not accede to the discovery and therefore, you would get a default judgment or something.
You know, I just... I just don't see what's at the end of this game for you.
Mr. Higgins: That's one possibility.
But again, we talked about the policy issues of why the Government came in with the position they did.
They suggested that the United States had a very distinct interest in avoiding delay, burdensome discovery, and difficult legal issues; and frankly, my thought is the same as yours.
Any party has those desires to avoid those issues and come to a ruling in their favor.
In this case we would hope that with an adoption of personal jurisdiction first, then the court would be required to rule on our motion to reevaluate forum non conveniens and we might be able to convince the court to be able to pursuit the case here.
In this particular case, that is the goal that we seek because that is, as you say, all we have to do at the end of the game with it.
I also wanted to--
Justice Scalia: I guess we should ask the other side, but I think I know what their answer will be, whether if the Court does dismiss on the basis of forum non conveniens without first addressing personal jurisdiction, it must assume the existence of personal jurisdiction?
And what do you think?
Mr. Higgins: --I think it has to, Your Honor.
Justice Scalia: Yes, I agree.
Mr. Higgins: The Seventh Circuit case--
Justice Scalia: I agree.
So how are you going to get a different result then when it goes back and the court of appeals says, oh, yes, you had personal jurisdiction, just as you thought you did, whereupon the district court says, oh, yeah, same result.
Mr. Higgins: --But there is the possibility of a case happening, as it happened in the In Re Bridgestone case, which was a Seventh Circuit case.
In that case the court dismissed for forum non conveniens and the... I believe it dealt with the country of Mexico.
The parties had obtained a ruling in Mexico saying that the Mexican courts were not to take jurisdiction of the case.
Under those circumstances the court was required to take back the case because it no longer had the alternate forum in which to adjudicate the dispute.
So I think that's the one example of the case that you raise.
Justice Ginsburg: But we know that that's not going to happen here, because the Chinese court has adjudicated the case.
Mr. Higgins: Not on this issue, Your Honor, and actually not on the bills of lading issue.
You did raise that point and there is still the potential of arbitration taking place under the various charter parties to adjudicate the rights and liabilities of the remaining parties in the action.
So that matter is still open as well.
Justice Ginsburg: We're dealing with, because it's a foreign nation, not the codified forum non conveniens that's in 1404 and 1406.
And you are treating this as it were counterpart to 1404, which is forum non conveniens.
But 1406 is wrong venue and, as you know, in the Goldlaw case this Court said a court can transfer even though it lacks personal jurisdiction and is a place of improper venue.
Now, why isn't the forum non conveniens doctrine as applied to foreign nations a combination of 1404 and a 1406, and if it includes 1406 then you don't need your personal jurisdiction, you don't need venue, you just transfer it to a place where those conditions exist?
Mr. Higgins: I think, Your Honor, in that case, it's... as the doctrine developed, the difference lies in the statutory framework of the 1404 versus the judicially created version of the forum non conveniens.
I think you're correct that as forum non conveniens exists today, side by side with 1404, you certainly have the limited application that it will apply to only foreign nations or to a State court.
And that's what I thought was the benefit of creating a rule that's rather limited in scope, that will not touch many other factors.
It can be discrete.
It can be applied easily.
And that comports with Federal Rules of Civil Procedure 1.
We thought that was one of the reasons why a finding by this Court would be able to ease the administration of cases along those lines.
If the Court has no other questions, I certainly would urge that, based on precedent and logic and the terms of the doctrine of forum non conveniens itself, that the ruling of the Third Circuit be upheld.
Rebuttal of Gregory Andrew Castanias
Chief Justice Roberts: Thank you, Ms. Higgins.
Mr. Castanias, you have 9 minutes remaining.
Mr. Castanias: Mr. Chief Justice, unless the Court has further questions, we'll rest on the argument given in the briefs.
Chief Justice Roberts: Thank you, counsel.
The case is submitted.
Argument of Speaker
Mr. Speaker: Justice Ginsburg has the opinion of the court in 06-102, Sinochem International versus Malaysia International Shipping.
Argument of Justice Ginsburg
Mr. Ginsburg: This Case concerns the Doctrine of forum non conveniens under which a federal district court may dismiss an action on the ground that a court abroad is the more appropriate and convenient forum to adjudicate the controversy.
We gladly review to decide a question that has divided the Courts of Appeals must a district court first conclusively establish its own jurisdiction before dismissing a suit on the ground of forum non conveniens.
We hold that a district has discretion to respond at once to a defendant’s forum non conveniens plea and need that take up first any other threshold objection.
In particular, a court need not resolve whether it has authority to adjudicate the cause for subject matter jurisdiction or personal jurisdiction over the defendant if it determines that in any event of foreign tribunal is the more suitable arbiter of the merits of the case.
The underlined controversy concerns a shipment of Steel coils from Pennsylvania to China.
Malaysia International Shipping Corporation and Malaysian ship owner charged that Sinochem International Company, a Chinese State owned importer had made misrepresentations to Chinese Admiralty Court to gain arrest in China of Malaysia International’s vessel, the vessel that carried the steel coils from Philadelphia to a port in China.
Sinochem had launched legal proceedings in China alleging that Malaysia International falsified critical documents to Sinochem’s economic disadvantage.
In response Malaysia International filed the instant suit against Sinochem in the United States District Court for the Eastern District of Pennsylvania alleging that Sinochem’s petition to the Chinese court contained negligent misrepresentation.
Sinochem moved to dismiss the Federal court suit on several grounds, including lack of subject-matter jurisdiction, lack of personal jurisdiction and forum non conveniens.
The District Court determined that it had maritime subject-matter jurisdiction but then it lacked personal jurisdictions over Sinochem under Pennsylvania’s long-armstatute.
Conjecturing that limited discovery might reveal that Sinochem’s national contacts sufficed to establish personal jurisdiction under a Federal Rule, the Court nevertheless denied discovery and dismissed the case under the Doctrine of forum non conveniens in light of the proceedings on going in China.
The Court of Appeals for the Third Circuit agreed there was subject-matter jurisdiction because the suit qualified as an admiralty case and that personal jurisdiction could not be resolved without discovery.
Then over a dissent the majority concluded that the case could not be dismissed under the forum non conveniens doctrine unless and until the District Court determine definitively that it had both subject-matter jurisdiction and personal jurisdiction.
We reverse the Court of Appeals Judgment.
In Steel Co. v. Citizens for Better Environment, we clarify the jurisdictional questions ordinarily must precede merit determination in dispositional order.
More recently Ruhrgas AG v. Marathon Oil Co. made a claim that there is no mandatory sequencing of jurisdictional issues further more a federal court has leeway “to choose among threshold grounds for denying audience to a case on the merits.”
A forum non conveniens dismissal is a non merits disposition resolving a forum non conveniens challenge until no assumptions by the court of substantive law declaring power.
A district court may therefore order a forum non convenience dismissal bypassing questions of subject matter and personal jurisdiction when considerations of convenience, fairness, and judicial economy so warrant.
The dispute between Sinochem and Malaysia International presents a text book case for immediate forum non conveniens dismissal.
The District Court subject matter jurisdiction involved in issue of first impression in the Third Circuit and was considered at some length by the courts below.
That effort could have been avoided.
Discovery concerning personal jurisdiction would have burdened Sinochem with expense and delay.
All for not, the District Court inevitably would dismiss the case without reaching the merits, given its well-considered forum non conveniens appraisal.
Judicial economy would be disserved by continuing litigation in the District Court given the proceedings long launched in China all the more so because Malaysia International federal court complaint centrally allege that Sinochem had made misrepresentations to the Chinese admiralty court in order to secure the Malaysian vessels arrest in China and issue best left for resolution by the Chinese courts.
If as in the mine run of cases the Court can readily determine that it lacks jurisdiction over the cause or the defendant.
The proper cause would be to dismiss on that ground but where subject-matter jurisdiction or personal jurisdiction is difficult to determine, and forum non conveniens considerations weigh heavily in favor of dismissal, the court properly takes the less burdensome course.
The Court’s opinion is unanimous.