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Ruhrgas AG v. Marathon Oil Co.

Supreme Court of the United States · 1999 · Civil Procedure

Civil ProcedureSubject-Matter JurisdictionPersonal JurisdictionRemovalsubject-matter jurisdictionpersonal jurisdictionremovalthreshold grounds

Facts

Marathon filed state-law tort claims against Ruhrgas in Texas state court arising out of a Norwegian gas venture and alleged Ruhrgas furthered its plans through meetings and correspondence in Texas. Ruhrgas removed the case to federal court on diversity, federal-question, and arbitration-related grounds, then moved to dismiss for lack of personal jurisdiction, while Marathon moved to remand for lack of subject-matter jurisdiction. The district court found Ruhrgas' Texas contacts insufficient and dismissed for lack of personal jurisdiction. The subject-matter jurisdiction questions included difficult issues, including whether removal was proper despite the presence of an alien plaintiff and whether the case related to an international arbitration agreement.

Issue

Must a federal district court in a removed case always determine subject-matter jurisdiction before dismissing for lack of personal jurisdiction? Or may the court, in its discretion, decide personal jurisdiction first when that ground is clearer and the subject-matter question is difficult?

Rule

A federal court may not assume subject-matter jurisdiction in order to decide the merits, but there is no mandatory jurisdictional hierarchy requiring subject-matter jurisdiction to be decided before personal jurisdiction in every case. In removed as well as originally filed federal cases, a district court may choose among threshold, non-merits grounds and may dismiss for lack of personal jurisdiction before resolving subject-matter jurisdiction when the personal-jurisdiction issue is straightforward, raises no complex state-law question, and the alleged subject-matter defect presents a difficult or novel issue.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nora Bell sued Baltic Forge Ltd., a Polish manufacturer, in Illinois state court over a failed supply arrangement. Baltic Forge removed to federal court in Chicago on a novel treaty-based federal-question theory, then moved to dismiss for lack of personal jurisdiction; Nora moved to remand, and the personal-jurisdiction issue turns on a short record showing no Illinois-directed conduct.

What is the best statement of the district court's authority?

Explanation. There is no unyielding hierarchy requiring subject-matter jurisdiction to be decided before personal jurisdiction in every case, including removed cases. When personal jurisdiction is the straightforward, non-merits ground and the alleged subject-matter defect is difficult or novel, the district court may choose to dismiss for lack of personal jurisdiction first. What the court may not do is assume subject-matter jurisdiction to reach the merits.