Exxon Mobil Corporation v. Saudi Basic Industries, Inc. (United States Supreme Court) 

This case involves the application of the so-called Rooker-Feldman doctrine. The doctrine comes from two cases in which parties who had lost in state court sought to initiate actions in the federal district court, complaining that the state courts had violated their federal rights. In those two instances, the Supreme Court held that the federal suits were impermissible, because federal appellate jurisdiction over state court judgments only exists in the Supreme Court itself, not the lower federal courts. In Exxon Mobil, however, the Third Circuit was faced with a different circumstance, that of parallel federal and state court actions. Exxon Mobil, parent of two joint venturers, brought suit in the New Jersey federal court under the Foreign Sovereign Immunity Act against a third joint venturer, Saudi Basic Industries (“SBI”), over royalty payments. Meanwhile, SBI sued the other joint venturers in Delaware state court. SBI unsuccessfully moved to dismiss the federal action on abstention grounds. While SBI’s appeal of the district court’s denial of its motion to dismiss was pending before the Third Circuit, the Delaware state court action was tried, resulting in a jury verdict. The Third Circuit then dismissed the New Jersey federal action sua sponte under the Rooker-Feldman doctrine. The Supreme Court granted certiorari to resolve a split in the circuits concerning the application of this doctrine. While the majority of federal appellate courts only dismiss federal cases under the Rooker-Feldman doctrine that are clearly direct challenges to a state court decision, the Second and Third Circuits dismiss under Rooker-Feldman any time a state court decision would have some preclusive effect on the federal action as res judicata, even if a party might have independent federal claims. NELF and another legal advocacy organization filed an amicus brief with the Supreme Court arguing for reversal of the Third Circuit’s decision on the ground that the Rooker-Feldman doctrine should only be applied where the federal case has been brought clearly as an attempt to gain a collateral appeal of a state court judgment, after that judgment has been rendered. Amici argued that unless businesses can effectively invoke concurrent federal jurisdiction in appropriate cases, their federally granted rights may be significantly compromised by state court decisions more responsive to local concerns. In a unanimous decision issued on March 30, 2005, the Supreme Court agreed with NELF, holding that application of the Rooker-Feldman doctrine is “confined to cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the federal district court proceedings commenced and inviting district court review and rejection of those judgments.”  125 S.Ct. 1517 (2005)