Document: 526 U.S. 574119 S.Ct. 1563143 L.Ed.2d 760 145 F.3d 211, reversed and remanded. SUPREME COURT OF THE UNITED STATES No. 98 470 RUHRGAS AG, PETITIONERv.MARATHON OIL COMPANY et al. ON WRIT CERTIORARI TO APPEALSFOR FIFTH CIRCUIT [May 17, 1999] Justice Ginsburg delivered the opinion of Court. 1 This case concerns authority federal courts to adjudicate controversies. Jurisdiction resolve cases on merits requires both over category claim in suit (subject-matter jurisdiction) parties (personal jurisdiction), so that court's decision will bind them. In Steel Co. v. Citizens for Better Environment, 523 83 (1998), this Court adhered rule a court may not hypothesize subject-matter jurisdiction purpose deciding merits. rejected doctrine, once approved by several Courts Appeals, allowed tribunals pretermit jurisdictional objections "where (1) question is more readily resolved, (2) prevailing party would be same as were denied." Id., at 93. Recalling "a long venerable line our cases," id., 94, reiterated: "The requirement established threshold matter is'inflexible without exception,' " 94 95 (quoting Mansfield, C. & L. M. R. Swan, 111 379, 382 (1884)); "[j]urisdiction power declare law," '[w]ithout cannot proceed all any cause,' U.S., Ex parte McCardle, 7 Wall. 506, 514 (1869)). The Court, Co., acknowledged "the absolute purity" jurisdiction-first had been diluted few extraordinary cases, 101, O'Connor, joined Kennedy, majority understanding Court's did catalog "an exhaustive list circumstances" which exceptions solid appropriate, 110. 2 backdrop issue now before us: If, held, generally must precede dispositional order, personal decisional line? Or, do district have discretion avoid difficult when absence surer ground? particular civil action we confront was commenced state removed court. specific granted certiorari asks "[w]hether absolutely barred circumstances from dismissing lack first its jurisdiction." Pet. Cert. i. 3 We hold court, originating there no unyielding hierarchy. Customarily, resolves doubts about subject matter, but are appropriately accords priority inquiry. proceeding us such case. 4 * underlying controversy stems venture produce gas Heimdal Field Norwegian North Sea. 1976, respondents Marathon Oil Company International acquired Petroleum (Norway) (MPCN) respondent Norge (Norge). See App. 26.1 Before acquisition, held license Field; following transaction, assigned MPCN. Record, Exhs. 61 62 Document 64. 1981, MPCN contracted sell 70% share production group European buyers, including petitioner Ruhrgas AG. Exh. 63, pp. 90, 280. parties' agreement incorporated into Gas Sales Agreement (Heimdal Agreement), "governed construed accordance with Law," B, Tab Removal, Agreement, p. 102; disputes thereunder "exclusively finally settled arbitration Stockholm, Sweden, with" Chamber Commerce rules, 100. II 5 Company, (collectively, Marathon) filed lawsuit against Texas July 6, 1995, asserting state-law claims fraud, tortious interference prospective business relations, participation breach fiduciary duty, conspiracy. 33 40. alleged other buyers induced them false promises "premium prices" guaranteed pipeline tariffs invest $300 million development erection Ruhrgas' plant Germany. 26 28; Brief Respondents 2. effective monopolization diminished value 31, 33, 357; asserted furthered plans three meetings Houston, Texas, through stream correspondence directed Texas. 229, 233. 6 District Southern 214 (CA5 1998). notice removal, bases jurisdiction: diversity citizenship, see 28 U.S.C. § 1332 (1994 ed. Supp. III), theory Norge, only nondiverse plaintiff, fraudulently joined;2 question, §1331, because Marathon's "raise[d] substantial questions foreign international form part common 274; 9 205 authorizes removal "relat[ing] to" agreements.3 F.3d, 215; 115 315, 319 321 (CA5), vacated rehearing en banc granted, 129 746 (1997). moved dismiss complaint jurisdiction. remand 215. After permitting discovery, dismissed 455. ruling, relied Fifth Circuit precedent allowing establishing 445. Texas' long-arm statute, Tex. Civ. Prac. Rem. Code Ann. §17.042 (1997), extent Due Process Clause Federal Constitution. 446; Kawasaki Corp. Middleton, 699 S. W. 2d 199, 200 (Tex. 1985). addressed constitutional concluded contacts insufficient support 445 454. Finding "no evidence engaged conduct Texas," 450, determined present adequately affiliating 448.4 8 A panel Appeals "respec[t]" proper balance federalism" impelled it turn formidable presented." 318. examining rejecting each jurisdiction, 321,5 judgment ordered remanded 321. denied petition writ certiorari, limited whether existed under 205. 522 967 Circuit, own motion, banc, thereby vacating decision. 9-to-7 decision, that, decide issues first, reaching "only if found exist." 214. Noting Co.'s instruction 'established matter,' 217 94), derived "counsel against" recognition judicial directly 218. holding cases; perceived those most grave threat "usur[p] courts' residual 219.6 10 Writing seven dissenters, Judge Higginbotham agreed ordinarily should considered first. 231. If challenge involves complex questions, however, resolved than dissenters' view, take easier route. ibid. regarded illustrative appropriate: While argument presented impression, raised "[n]o purely "could relatively easily [Ruhrgas'] favor." 232 11 525 __ conflict between Circuits7 reverse. III 12 Article satisfy itself considers "For pronounce upon [the merits] has so," declared, "is act ultra vires." 101 102. incorrectly read teach exist, reaches merits, also addressed. 13 accorded nonwaiv-able delimits federal-court power, while restrictions person waivable protect individual rights. character two bedrocks unquestionably differs. Subject-matter limitations serve institutional interests. They keep within bounds Constitution Congress prescribed. Accordingly, delineations policed their initiative even highest level. 95; Fed. Rule Proc. 12(h)(3) ("Whenever appears lacks shall action."); 1447(c) ed., III) ("If time final [in case] remanded."). 14 Personal hand, "represents restriction liberty." Insurance Ireland Compagnie des Bauxites de Guinee, 456 694, 702 (1982). Therefore, insist limitation observed, or he forgo right, effectively consenting exercise adjudicatory authority. 12(h)(1) (defense waivable); Ireland, 703 (same). 15 These distinctions mean ever always "fundamental." too, essential element court," "powerless an adjudication." Employers Reinsurance Bryant, 299 374, (1937). case, indeed, impediment relies complete rests statutory interpretation, command. alien plaintiff (Norge) well defendant (Ruhrgas). joinder legitimate, required III, State Farm Fire Casualty Tashire, 386 523, 530 531 (1967), absent. contrast, safeguard due process stop ("The flows Clause."). 16 reasoned necessarily precedes ruling principle does dictate sequencing issues. "[A] dismisses non-merits grounds finding makes assumption law-declaring violates separation powers principles Mansfield Company." re Papandreou, 139 247, 255 (CADC It hardly novel choose among denying audience Thus, observed overstep limits they decline discretionary determining fall pendent Moor County Alameda, 411 693, 715 716 (1973), abstain Younger Harris, 401 37 (1971), controversy, Ellis Dyson, 421 426, 433 434 (1975). 100 n. 3; cf. Arizonans Official English Arizona, 520 43, 66 67 (1997) (pretermitting appellants' standing mootness grounds). B 17 Maintaining decided litigation originates Tr. Oral Arg. 21; 13, sees offensive ground dignity immediately stake. want determination preclude relitigating very Baldwin Iowa Traveling Men's Assn., 283 522, 524 527 (1931) issue-preclusive effect). 18 Issue preclusion subsequent state-court litigation, attend determination. hypothesizes, example, who removes seeking $50,000 compensatory $1 punitive damages contract. 11. determines law allow contract therefore remands failure amount 1332(a) ($75,000), conclusion travel back Assuming fair airing permissible although set otherwise governing adjudications. Chicot Drainage Dist. Baxter Bank, 308 371, 376 (1940) ("[Federal courts'] determinations [whether entertain assailed collaterally."); Restatement (Second) Judgments §12, (1980) ("When rendered contested action, [ordinarily] precludes litigating litigation."). Similarly, "dualistic system courts" allows make rulings supplemental 1367. 231, 7. 19 Most essentially, complementary systems administering justice Nation. Cooperation comity, competition conflict, design. State's dignitary interest bears consideration exercises order. raises "difficult [state] "as eas[ily]" conclude "federalism tip scales favor initially motion remand." Allen Ferguson, 791 F.2d 611, 616 (CA7 1986). find economy restraint overriding. See, e.g., Asociacion Nacional Pescadores Dow Quimica, 988 559, 566 567 1993) (if nonfrivolous turns issues, "federal intrusion minimized"). design leeway sensitive judgments sort. 'Our Federalism' 20 "does blind deference 'States' Rights' means centralization control every important National Government courts. Framers these courses. What concept represent sensitivity legitimate interests Governments." Younger, 44. 21 posit defendants abuse opportunistic removals. rule, suggest, encourage manufactured, convoluted theories designed wrench 219; 29. specter unwarranted recently "rests indulge comprehend, balk applying, rules prescribed . well-advised foresee likely outcome swift nonreviewable 1447(c), (d), attended displeasure whose improperly invoked." Caterpillar Inc. Lewis, 519 61, 77 78 (1996). C 22 accord Higginbotham, recognize instances involve arduous 229 ("engag[ing]" "at outset [is] often efficient way going"). expedition coequal stature impel dispose Cantor Fitzgerald, P. Peaslee, 88 152, 155 (CA2 1996) (a disposing "should convinced resolved"). Where, here, straightforward presenting law, defect turning jurisdiction.8 23 24 For reasons stated, reversed, proceedings consistent opinion. 25 ordered. Notes 1. German corporation; corporation. 21, 22. Ohio corporation, Delaware principal places formation. 239, 27 "citizens citizens subjects state" lies 1332(a)(2). Section interpreted require "complete diversity." Strawbridge Curtiss, Cranch 267 (1806); Fallon, D. Meltzer, Shapiro, Hart Wechsler's System 1528 1531 (4th 1996). citizenship Ruhrgas, incomplete. 3. Title "[w]here pending relates award falling Convention [on Recognition Enforcement Foreign Arbitral Awards June 10, 1958]." 29 4. Respecting supra, 4, shown pursued pattern fraud misrepresentation during Houston meetings. 449. further "due [Heimdal Agreement] MPCN." 450. As provides reasoned, "Ruhrgas could expected haled based meetings." Ibid. "systematic continuous Texas" kind "subject general Texas." 453 (citing Helicopteros Nacionales Colombia, A. Hall, 466 408 (1984)). 30 5. legal notwithstanding assignment turned law; show, outset, defeat diversity. 320 appeals "strike sovereignty nation," raise account. 320. Finally, independent "relat[e] 31 6. consider "nove[l]" presented. 225 "express[ed] opinion" lacked 225, 23. 32 Second 8. suggests appropriate simply affirm Ruhrgas. Petitioner 38 39, 20. That properly remand.

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