Term: 2004
Docket: 03-1696
Exxon Mobil Corporation, Exxon Chemical Arabia, Inc., And Mobil Yanbu Petrochemical Company, Inc. v. Saudi Basic Industries Corporation
- Pro
03-1696 EXXON MOBIL CORP. V. SAUDI BASIC INDUSTRIES CORP. DECISION BELOW: 364 F3d 102 CERT. GRANTED 10/12/2004 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? LOWER COURT CASE NUMBER: 02-2130
In the 2004 case Exxon Mobil Corporation, Exxon Chemical Arabia, Inc., and Mobil Yanbu Petrochemical Company, Inc. v. Saudi Basic Industries Corporation (SABIC), the Supreme Court ruled in favor of SABIC. The dispute arose over a joint venture between Exxon and SABIC where SABIC charged higher than agreed upon royalties for technology licenses used in the production process at two petrochemical plants located in Saudi Arabia. When this was discovered during an audit by ExxonMobil, they filed suit against SABIC to recover these overcharges which amounted to $416 million dollars plus interest. In response, SABIC countersued claiming that it had been underpaid its share of profits from the joint ventures due to accounting irregularities on part of ExxonMobil's subsidiaries. The Delaware Chancery Court initially sided with ExxonMobil but this decision was overturned by Delaware Supreme Court citing lack of jurisdiction as both companies were incorporated outside U.S.A and their agreement stipulated any disputes would be resolved according to Saudi law. Subsequently when appealed before US Supreme court; it upheld lower court’s ruling stating that federal courts lacked jurisdiction because there wasn’t sufficient connection between United States and parties involved or subject matter.
In the dissenting opinion for Exxon Mobil Corporation v. Saudi Basic Industries Corporation, Justice Ginsburg disagreed with the majority's decision to dismiss Exxon's case on jurisdictional grounds. She argued that federal courts should have jurisdiction over cases involving foreign corporations if those corporations had substantial connections to the United States. In this case, she believed that Saudi Basic Industries Corporation (SABIC) had such a connection because it was involved in a joint venture with an American company and its actions directly affected U.S commerce. Furthermore, she contended that SABIC’s alleged misconduct occurred mainly in America and thus fell under U.S law enforcement authority. Therefore, according to Justice Ginsburg, dismissing Exxon's claims against SABIC due to lack of jurisdiction undermined both fairness and justice.
