Exxon Mobil Corp. v. Saudi Basic Industries Corp.
Saudi Basic Industries Corporation (SABIC) and Exxon subsidiaries, Yanbu and ECAI, formed two joint venture entities. During the course of the relationship, SABIC charged royalties to the joint ventures for the sublicense of a polyethylene manufacturing process. ExxonMobil, Yanbu and ECAI now dispute the propriety of those royalties.
In September 2000, SABIC sued Yanbu and ECAI in Delaware Superior Court seeking a declaratory judgment that the royalties did not violate the joint venture agreements. Later that month, ExxonMobil, Yanbu and ECAI countersued SABIC in the United States District Court for the District of New Jersey seeking a declaratory judgment that SABIC had charged excessive royalties to the joint ventures. In January 2002, Yanbu and ECAI answered SABIC's state court claims, asserting as counterclaims the same claims they had filed in federal court. In March 2003, a jury in the Delaware Superior Court returned a verdict in favor of ExxonMobil. SABIC appealed the verdict, which is currently pending in the Delaware Supreme Court.
Prior to the state court trial, SABIC moved to dismiss ExxonMobil's federal court action, asserting foreign sovereign immunity. The district court denied the motion on April 3, 2002 and SABIC appealed the decision to the United States Court of Appeals for the Third Circuit. The third circuit, however, did not reach the sovereign immunity issue, instead determining that the Rooker-Feldman doctrine barred federal subject matter jurisdiction over the ExxonMobil claims because they had already been litigated in state court. The Rooker-Feldman doctrine, derived from two Supreme Court decisions, prevents lower federal courts from sitting in direct review of state court decisions. According to the Court, the doctrine is necessary because Congress has conferred jurisdiction to review state court decisions only on the Supreme Court. The court of appeals determined the Rooker-Feldman doctrine clearly barred ExxonMobil's federal claims because the Delaware Superior Court had already reached a final judgment addressing identical claims.
Question Presented:
May the Rooker-Feldman doctrine, which bars lower federal courts from conducting de facto appellate review of decisions by state courts, be
expansively interpreted to additionally incorporate preclusion principles and divest federal courts of jurisdiction solely because a pending state-court proceeding presents identical issues,
notwithstanding the long-established system of dual federal and state jurisdiction?
