Chaim KAPLAN, individually and as natural guardian of plaintiffs M.K.(1), A.L.K., M.K.(2), C.K. and E.K., et al., Appellants v. CENTRAL BANK OF THE ISLAMIC REPUBLIC OF IRAN, also known as Bank Markazi Jomhouri Islami Iran, et al., Appellees
No. 16-7142
United States Court of Appeals, FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 12, 2017 Decided July 20, 2018
Appeal from the United States District Court for the District of Columbia (No. 1:10-cv-00483)
Jeremy D. Frey argued the cause for appellees. With him on the brief was Matthew D. Foster.
No. 16-7122
CHAIM KAPLAN, ET AL., APPELLANTS
HEZBOLLAH, ALSO KNOWN AS HIZBULLAH, ALSO KNOWN AS HIZBOLLAH, ALSO KNOWN AS HEZBALLAH, ALSO KNOWN AS HIZBALLAH AND DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA, ALSO KNOWN AS NORTH KOREA, APPELLEES
Appeal from the United States District Court for the District of Columbia (No. 1:09-cv-00646)
Meir Katz argued the cause for appellants. With him on the briefs was Robert J. Tolchin.
Anthony F. Shelley, appointed by the court, argued the cause as amicus curiae in support of the portions of the District Court’s judgment at issue on appeal. With him on the brief were Ian A. Herbert and Adam W. Braskich.
Before: KAVANAUGH* and SRINIVASAN, Circuit Judges, and EDWARDS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge SRINIVASAN.
Concurring opinion filed by Senior Circuit Judge EDWARDS.
The district court dismissed both complaints. The court concluded that the ATA’s so-called act-of-war exception precluded the claims under that statute, and that the presumption against extraterritoriality barred the ATS claims. We vacate the district court’s dismissal with respect to the ATA claims and remand for further proceedings. We conclude that the district court must first determine that it has personal jurisdiction over the defendants before applying the statute’s act-of-war exception. We affirm the district court’s dismissal of the claims under the ATS based on the Supreme Court’s recent decision in Jesner v. Arab Bank, PLC, 138 S. Ct. 1386 (2018), which holds that foreign corporations (like the bank defendants here) are not subject to liability under that statute.
I.
The complaints in these cases contain the following allegations, which we assume are true given that the claims before us on appeal were dismissed based on the alleged facts. See English v. District of Columbia, 717 F.3d 968, 971 (D.C. Cir. 2013).
In 2009 and 2010, plaintiffs filed two separate actions to recover for their injuries from Hezbollah’s rocket attacks. In the first action, a group of American plaintiffs brought Anti-Terrorism Act claims against Hezbollah, Foreign Sovereign Immunities Act claims against North Korea for funding the rocket attacks, and common law tort claims against both defendants. In the second action, the same American plaintiffs brought ATA claims against Bank Saderat PLC for transferring funds from Iran to Hezbollah, and Foreign Sovereign Immunities Act claims against Iran, the Central Bank of Iran, and Bank Saderat Iran for supporting the rocket attacks. The second action also included claims by a group of non-American plaintiffs against Bank Saderat Iran and Bank Saderat PLC under the Alien Tort Statute. In addition, all plaintiffs in the second action raised claims under Israeli tort law against Bank Saderat Iran and Bank Saderat PLC.
The district court largely addressed the two cases together. Because Hezbollah and North Korea failed to appear after being served, the plaintiffs moved for a default judgment against those defendants. Bank Saderat Iran and Bank Saderat
On August 20, 2013, the district court dismissed the Anti-Terrorism Act claims (which had been brought against Hezbollah and Bank Saderat PLC), holding that the ATA’s act-of-war exception precluded liability. The court also dismissed the Alien Tort Statute claims (which had been brought against Bank Saderat PLC and Bank Saderat Iran), based on the presumption against extraterritoriality. Kaplan v. Cent. Bank of Islamic Republic of Iran, 961 F. Supp. 2d 185, 204-05 (D.D.C. 2013). And the court dismissed the Foreign Sovereign Immunities Act claims against Bank Saderat Iran, because the bank was not the “agency or instrumentality of a foreign state.” Id. at 198-99.
On July 24, 2014, the district court issued an opinion concluding that Iran and North Korea, but not the Central Bank of Iran, had materially supported Hezbollah’s attacks in violation of the Foreign Sovereign Immunities Act. On September 30, 2016, after further proceedings on the claims against Iran and North Korea, the district court entered a default judgment against those defendants, awarding the plaintiffs more than $169 million in compensatory and punitive damages.
The plaintiffs now appeal the dismissal of their Anti-Terrorism Act claims against Hezbollah and Bank Saderat PLC, as well as the dismissal of their Alien Tort Statute claims against Bank Saderat PLC and Bank Saderat Iran. Because Hezbollah had not entered an appearance, we appointed an amicus curiae to present arguments supporting the portions of the district court’s judgment at issue on appeal.
We initially consider two challenges to our appellate jurisdiction. Under
A.
We first address the timeliness of the plaintiffs’ appeal of the August 2013 dismissal of their claims against the Banks.
Relatedly, our court has determined that unserved defendants “are not ‘parties’ within the meaning of
Relying on that aspect of our decision in Cambridge, the Banks contend that the plaintiffs’ appeal is untimely. The Banks observe that, at the time of the district court’s August 2013 dismissal of the claims against them, the remaining defendants in the case involving the Banks—Iran and Central Bank of Iran (CBI)—had not yet been properly served. Thus, in the Banks’ view, Iran and CBI were not “parties” for purposes of
The Banks are correct that, under Cambridge, the existence of unresolved claims against unserved defendants generally will not preclude treatment of an order disposing of all other claims as a final, appealable judgment. But Cambridge also recognized the possibility of a different result when the district court affirmatively contemplates further proceedings on the claims against the unserved defendants. We observed that, in the Ninth Circuit, “an order disposing of all claims only against served parties is not final if ‘it is clear from the course of proceedings that further adjudication is contemplated’ by the district court.” Cambridge, 489 F.3d at 1360 n.2 (quoting Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 872 (9th Cir. 2004)).
Although we had no occasion in Cambridge to consider whether to adopt the same approach, we do so today. We conclude that, when a district court makes plain that it foresees
That approach vindicates
Consider the anomalous implications of a contrary approach, under which the resolution of claims against properly served defendants would be considered a final judgment even though the district court intends further proceedings against as-yet-unserved defendants. In such a regime, the district court would be unable to dispose of the claims against properly served defendants without entering a final judgment, even if it fully expects other defendants to be imminently served. The court might then opt to delay announcing its resolution of the claims against the already served defendants so as to avoid fracturing the case, contravening the Rules’ general preference for the swift resolution of claims. See
Applying that approach here, it is clear that, when the district court dismissed the claims against the Banks in August 2013, it contemplated further proceedings on the claims against the unserved defendants, Iran and CBI. In its memorandum opinion dismissing the claims against the Banks, the court repeatedly referred to Iran and CBI as “the remaining defendants,” and the FSIA claims against them as the “remaining claims.” Kaplan, 961 F. Supp. 2d at 206. The court also discussed the failed previous attempts at service and ordered the plaintiffs to serve Iran and CBI through diplomatic channels within twenty-one days. Id. Indeed, in its order accompanying the opinion, the court dismissed the claims against the Banks in two lines and then devoted a full page to describing how the plaintiffs should “commence service of process via diplomatic channels” for their “remaining claims.” Order, Kaplan v. Cent. Bank of Islamic Republic of Iran, No. 10-cv-483 (D.D.C. Aug. 20, 2013), ECF No. 41. In short, both the opinion and order make clear the district court’s expectation that the remaining defendants could be properly served and the claims against them would then proceed to resolution (which in fact happened).
In those circumstances, we hold that the district court’s August 20, 2013, order, dismissing the claims against the Banks, was not a final, appealable judgment. Rather, the court’s October 28, 2016, order denying plaintiffs’ motion for reconsideration (and for alteration or amendment of the judgment) was the operative appealable judgment. See
B.
Whereas the Banks contend that the appeal of the dismissal of the claims against them was too late, Amicus suggests that the appeal of the dismissal of the claims against Hezbollah may have been too early. The district court initially dismissed the ATA claims against Hezbollah on August 20, 2013. And on August 20, 2015, plaintiffs voluntarily dismissed the tort claims against Hezbollah. After further proceedings on claims involving other defendants, the district court, on September 30, 2016, entered an “Order and Judgment” that it characterized as a “final judgment.” Order & Judgment, Kaplan v. Hezbollah, No. 09-cv-646 (D.D.C. Sept. 30, 2016), ECF No. 84. One week later, on October 7, the plaintiffs filed a notice of appeal concerning the dismissal of the claims against Hezbollah.
As we have seen, an order resolving fewer than all claims against all defendants generally is not a final, appealable order. See
We conclude that there was a final, appealable judgment because the district court treated the FSIA and tort claims as a
Throughout the proceedings in the district court, the court and parties treated the case as one involving claims brought under the FSIA, such that the tort claims were subsumed in the FSIA claims. For instance, after dismissing the ATA claims against Hezbollah, the court explained that only the FSIA claims against North Korea remained. And any ambiguity about the district court’s intent to end the case—with respect to all claims—was resolved when the court issued its September 30, 2016, order, which it termed a “final appealable order” entering “final judgment” against North Korea for violating the FSIA. The judgment awarded the plaintiffs over $169 million in damages.
Plaintiffs, at that point, had obtained from North Korea all of the relief they sought, for all of the injuries they alleged. There was no remaining injury to be redressed via tort claims—any separate recovery on those claims would have been fully redundant. See Kassman v. Am. Univ., 546 F.2d 1029, 1034 (D.C. Cir. 1976); Roth v. Islamic Republic of Iran, 78 F. Supp. 3d 379, 401 (D.D.C. 2015). Consequently, the judgment, along with the district court’s unequivocal words of finality, brought the action to a close, just as the district court intended. Cf. Attias v. Carefirst, Inc., 865 F.3d 620, 624 (D.C. Cir. 2017) (characterizing the “district court’s intent [a]s a significant
III.
Recall that the district court dismissed the Anti-Terrorism Act claims against Hezbollah and Bank Saderat PLC under the statute’s act-of-war exception, and dismissed the Alien Tort Statute claims against both of the Banks based on the presumption against extraterritoriality. Plaintiffs argue that the district court erred by resolving the ATA claims on those grounds without first confirming that it had personal jurisdiction over the defendants. And because we have a duty to assure ourselves of our jurisdiction, we must also consider whether the court erred in the same respect with regard to the ATS claims.
We take up the following questions in addressing whether the district court was obligated to confirm the existence of personal jurisdiction before resolving the ATA and ATS claims: (i) can plaintiffs challenge the dismissals on that basis even though they believe personal jurisdiction exists?; (ii) if so, is personal jurisdiction an issue that a district court must examine before reaching the merits of a claim?; (iii) if so, is the ATA’s act-of-war exception a merits issue, such that it can be reached only after assuring the existence of personal jurisdiction?; and (iv) similarly, can the ATS claims be resolved based on the presumption against extraterritoriality, or based on the Supreme Court’s recent rejection of ATS liability for foreign corporations, see Jesner, 138 S. Ct. 1386, without first addressing personal jurisdiction?
We agree with the plaintiffs as to the ATA claims, and so vacate the dismissal of those claims and remand to enable the district court to address personal jurisdiction. But we affirm
A.
In the proceedings before the district court, plaintiffs understandably asserted that the court had personal jurisdiction over the defendants. In light of plaintiffs’ position to that effect in the district court, Amicus argues that plaintiffs either waived the ability to raise a challenge based on the district court’s failure to assure the existence of personal jurisdiction, or lack standing to bring such a challenge on appeal. We disagree.
Plaintiffs do not now take back their previous assertion that the district court had personal jurisdiction over the defendants. Instead, plaintiffs want the district court to establish the existence of personal jurisdiction rather than bypass the issue, because a failure by the court to establish personal jurisdiction could undermine the enforceability of its judgment in a subsequent proceeding. For instance, if this court were to reverse the district court’s dismissals and plaintiffs ultimately were to prevail on the claims, a failure to establish personal jurisdiction could impair the plaintiffs’ ability to enforce the judgment in their favor. See Combs v. Nick Garin Trucking, 825 F.2d 437, 442 (D.C. Cir. 1987) (“[A]n in personam judgment entered without personal jurisdiction over a defendant is void as to that defendant.“). That alleged injury suffices to establish the plaintiffs’ standing on appeal to challenge the district court’s orders on the ground that the court was obligated to establish personal jurisdiction before going on to resolve the claims. See Nat’l Res. Def. Council v. Pena, 147 F.3d 1012, 1018 (D.C. Cir. 1998); 15A Charles Alan Wright et al., Federal Practice and Procedure § 3902 (2d ed. 1992).
In contending that the district court was required to establish the existence of personal jurisdiction over the defendants before resolving the claims, plaintiffs rely on principles established by the Supreme Court in Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998). In Steel Co., the Court rejected the practice of “hypothetical jurisdiction,” under which a court assumes it has jurisdiction over a claim and proceeds to resolve it on the merits. Rather than assuming (without deciding) jurisdiction and going on to address the merits, Steel Co. explained, a court must first establish as “an antecedent” matter that it has jurisdiction. Id. at 101. That is because, without jurisdiction, a court lacks power to consider a case at all. Id. at 94; see Morrison v. Nat’l Australia Bank Ltd., 561 U.S. 247, 254 (2010).
Steel Co. involved a question of subject-matter jurisdiction (there, the issue of standing under Article III). See 523 U.S. at 102. Here, we consider whether the same rule of priority extends to a court’s personal jurisdiction: that is, must a court likewise assure itself that it has personal jurisdiction before moving on to address the merits of a claim? The plaintiffs say yes, but the Banks and Amicus say no. The plaintiffs have the correct understanding.
The Supreme Court settled the issue in Sinochem International Co. v. Malaysia International Shipping Corp., 549 U.S. 422 (2007). There, the Court explained that its decision in Steel Co. “clarified that a federal court generally may not rule on the merits of a case without first determining that it has jurisdiction over the category of claim in suit (subject-matter jurisdiction) and the parties (personal jurisdiction).” Id. at 430-31 (emphasis added). After Sinochem, it is clear that, when personal jurisdiction is in
While we have not previously addressed the issue squarely, our precedent is consistent with that understanding. For example, in Forras v. Rauf, the defendant moved to dismiss for lack of subject-matter and personal jurisdiction, as well as on several merits grounds. 812 F.3d 1102, 1104 (D.C. Cir.), cert. denied, 137 S. Ct. 375 (2016). The district court dismissed on the merits without addressing either jurisdictional objection. Citing ”Steel Co. and its progeny,” we found the district court erred by “leapfrogg[ing] over the serious jurisdictional issues.” Id. at 1105. Without distinguishing between subject-matter and personal jurisdiction, we held that “[t]he district court plainly should have satisfied any jurisdictional concerns before turning to a merits question[.]” Id. In another case, similarly, we relied on Sinochem in explaining that we would first address a personal-jurisdiction challenge before turning to the merits of the appeal. Gilmore v. Palestinian Interim Self-Gov’t Auth., 843 F.3d 958, 964 (D.C. Cir. 2016).
It is true that, in two prior decisions, we understood Steel Co. to require resolving issues of Article III jurisdiction before addressing the merits. See Chalabi v. Hashemite Kingdom of Jordan, 543 F.3d 725, 728 (D.C. Cir. 2008); Kramer v. Gates, 481 F.3d 788, 791 (D.C. Cir. 2007). Insofar as those decisions interpreted Steel Co.’s prohibition against “hypothetical jurisdiction” to be confined solely to questions of Article III jurisdiction, they would be in tension with the broader interpretation established in Sinochem. 549 U.S. at 431. Neither of those decisions specifically dealt with the issue of personal jurisdiction, however, and neither decision thus stands in the way of our adhering to Sinochem with respect to
While Sinochem draws an equivalence between questions of subject-matter jurisdiction and questions of personal jurisdiction for purposes of the Steel Co. rule of priority, there is an important distinction in the way a jurisdictional question arises in the two contexts. A defect of subject-matter jurisdiction is non-waivable, such that a court must always assure itself of its subject-matter jurisdiction regardless of whether a party has raised a challenge. See Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982). With personal jurisdiction, by contrast, a defendant can waive an objection by failing to raise the issue. See, e.g., id. at 703-04. A court thus generally has no obligation to raise a question of personal jurisdiction on its own. See Anger v. Revco Drug Co., 791 F.2d 956, 958 (D.C. Cir. 1986).
That in turn has implications for the operation of Steel Co.’s rule of priority. With regard to subject-matter jurisdiction, a court must assure itself of the existence of subject-matter jurisdiction before reaching the merits regardless of whether a party raises a jurisdictional challenge. With regard to personal jurisdiction, however, a court is obligated to address the issue of personal jurisdiction before reaching the merits only if an objection as to the court’s personal jurisdiction has been asserted.
Meanwhile, in the case containing the claims against Hezbollah, the defendants never entered an appearance. Their absence imposed an independent obligation on the district court to satisfy itself of its personal jurisdiction before entering a default judgment against a missing party. See Mwani v. bin Laden, 417 F.3d 1, 6 (D.C. Cir. 2005); 10A Charles Alan Wright et al., Federal Practice and Procedure § 2682 (3d ed. 1998). As a result, the personal jurisdiction issue was live in that case as well.
In neither case, however, did the district court address personal jurisdiction before dismissing the ATA claims or the ATS claims. Insofar as the grounds on which those claims were dismissed amounted to dispositions on the merits, the district court, per Steel Co. and Sinochem, should have first assured itself of its personal jurisdiction over the defendants. We thus proceed to consider next whether the grounds for dismissing those claims were dispositions on the merits—first, with respect to the ATA claims, and then, with respect to the ATS claims.
C.
The district court’s dismissal of the ATA claims under the statute’s act-of-war exception could be appropriate only if the disposition on that ground did not amount to a merits determination. The Banks contend that the act-of-war
The Supreme Court has articulated a “readily administrable bright line” for determining whether a statutory limitation like the act-of-war exception qualifies as jurisdictional. Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145, 153 (2013). Unless Congress “clearly states that a threshold limitation on a statute’s scope shall count as jurisdictional,” we generally treat the limitation as non-jurisdictional. Arbaugh v. Y&H Corp., 546 U.S. 500, 515-16 (2006). Congress, though, need not “incant magic words” to establish a limitation’s jurisdictional character. Sebelius, 568 U.S. at 153. We look both to the text of the limitation and to the statutory context to discern Congress’s intent. See Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 162, 164-65 (2010).
The Anti-Terrorism Act establishes a civil remedy for American nationals injured by acts of “international terrorism” committed outside of the United States.
Even if an act fits that definition, the ATA’s act-of-war exception provides that “[n]o action shall be maintained under section 2333 . . . for injury or loss by reason of an act of war.”
The text of the act-of-war exception does not “speak in jurisdictional terms or refer in any way to the jurisdiction of the district courts.” Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 394 (1982). Nor does the statutory context suggest that, notwithstanding the absence of a “clear jurisdictional label,” the exception “nonetheless impose[s] a jurisdictional limit.” Reed Elsevier, 559 U.S. at 162.
For instance, the act-of-war exception is not situated in a statutory section addressing jurisdiction, which can be an important sign of jurisdictional status. Id. at 164. There is a separate ATA provision entitled “Jurisdiction and venue.”
Section 2336’s “Other limitations” are appended to—and naturally coupled with—the immediately preceding section, entitled “Limitations of actions.”
The act-of-war exception’s function in the ATA, including its association with Section 2333(a), reinforces the exception’s non-jurisdictional character. The exception, along with the definitions in Section 2331, tells us “what conduct [the ATA] prohibits,” which is typically “a merits question,” not a jurisdictional one. Morrison, 561 U.S. at 254. And the exception becomes salient only if the act in question qualifies as “an act of international terrorism” in the first place.
Amicus contends that, even if the act-of-war exception is non-jurisdictional, it still presents a non-merits, threshold question that can be considered before personal jurisdiction. It is true that Steel Co.’s rule of priority does not invariably require considering a jurisdictional question before any non-jurisdictional issue. Rather, courts may address certain non-jurisdictional, threshold issues before examining jurisdictional
But an issue can qualify as a threshold one of that kind only if it can occasion a “[d]ismissal short of reaching the merits.” Sinochem, 549 U.S. at 431. In other words, a threshold question, while non-jurisdictional, still is not a merits question. Examples of such threshold questions include abstention, forum non conveniens, third-party standing, and the so-called Totten rule (requiring dismissal at the outset of an action that depends on an “espionage relationship with the Government“). See Tenet, 544 U.S. at 6 n.4, 8; Ruhrgas, 526 U.S. at 585; Pub. Citizen v. U.S. Dist. Court for D.C., 486 F.3d 1342, 1348-49 (D.C. Cir. 2007).
The ATA‘s act-of-war exception has little in common with those examples. Determining whether the exception applies to a plaintiff‘s claim requires grappling with the central question under the ATA: whether an act of terrorism (or act of war) occurred. That determination amounts to an “adjudication of the cause,” to which a court cannot proceed without first satisfying itself of its jurisdiction over the case. Sinochem, 549 U.S. at 431. The act-of-war exception thus does not qualify as a threshold issue that may be considered before establishing the court‘s jurisdiction.
Amicus gets no further in attempting to align the act-of-war exception with the political-question doctrine. The political-question doctrine speaks to a claim‘s justiciability, and we have previously held that it presents at least a non-merits, threshold issue that can be addressed before jurisdictional issues. See Hwang Geum Joo v. Japan, 413 F.3d 45, 47-48 (D.C. Cir. 2005). The point of the doctrine is to identify questions that courts should not resolve—because, for instance, there is a “textually demonstrable constitutional
Here, by contrast, there is no dispute that a court must determine whether the circumstances involve an act of war within the meaning of the statutory exception. That interpretive exercise, unlike with a non-justiciable political question, “is what courts do.” Id. at 201. There is then no reason to treat the act-of-war exception as involving a threshold issue just because the political-question doctrine presents at least a threshold issue. Rather, the exception presents a merits question, one that the district court could not reach before assuring itself of its personal jurisdiction over the defendants.
D.
We turn, finally, to the district court‘s dismissal of the ATS claims. The Alien Tort Statute vests district courts with “original jurisdiction of any civil action” brought “by an alien for a tort only, committed in violation of the law of nations.”
Here, the non-American plaintiffs sued the Banks under the ATS, alleging that the Banks’ transfer of funds to Hezbollah aided and abetted Hezbollah‘s challenged actions. Applying the presumption against extraterritoriality as set out in Kiobel, the district court dismissed the ATS claims on the
On appeal, the parties appear to assume that the question of extraterritoriality, in the context of the ATS, goes to subject-matter jurisdiction. If so, the district court could opt to resolve the claims on that jurisdictional ground without first assessing whether it had personal jurisdiction over the defendants: nothing in Steel Co. establishes an order of priority as between alternative jurisdictional grounds for disposing of a case. See Ruhrgas, 526 U.S. at 584. Because the parties assume that extraterritoriality is a jurisdictional issue under the ATS and that the district court thus was free to rest its dismissal on that ground, their arguments on appeal principally concern whether the district court correctly resolved the extraterritoriality question.
The Banks, however, also specifically preserved an argument that, as corporations, they cannot be held liable under the ATS. In doing so, they noted that the Supreme Court had granted review to consider that question in Jesner v. Arab Bank, PLC. The Court has since issued its decision in Jesner, holding that “foreign corporations may not be defendants in suits brought under the ATS.” 138 S. Ct. 1386, 1407 (2018).
There is no dispute that the Banks are foreign corporations (Bank Saderat Iran is based in Iran, and Bank Saderat PLC, a wholly-owned subsidiary, is incorporated in England and Wales). Banks’ Appellee Br. iii. In the wake of the Court‘s decision in Jesner, the Banks submitted a supplemental letter under
Although the district court dismissed the ATS claims against the Banks based on the presumption against extraterritoriality, we have latitude to affirm the court‘s judgment on an alternative ground, i.e., that the ATS does not allow for claims against foreign corporations. See EEOC v. Aramark Corp., 208 F.3d 266, 268 (D.C. Cir. 2000). But under Steel Co. and Sinochem, we can resolve the ATS claims on that ground only if it is either a jurisdictional limitation or a threshold, non-merits limitation like forum non conveniens or abstention. If, on the other hand, Jesner‘s bar against foreign corporate liability involves a merits issue, the issue could be reached only after assuring the existence of personal jurisdiction.
We conclude that Jesner‘s bar on foreign corporate liability under the ATS involves a non-merits disposition, such that we can rely on it without first assuring the existence of personal jurisdiction. See Pub. Citizen, 486 F.3d at 1348-49. In other words, the ATS bar against foreign corporate liability “[a]t a minimum” is a threshold basis for dismissal, which is enough to enable us to rest our decision on that ground. Id.
Jesner‘s exclusion of foreign corporate liability under the ATS bears the hallmarks of a threshold limitation as opposed to a merits one. The limitation has the effect in ATS cases of “denying audience to [a] case on the merits.” Id. (quoting Sinochem, 549 U.S. at 431). And it is “designed not merely to defeat the asserted claims, but to preclude judicial inquiry.” Id. at 1347 (quoting Tenet, 544 U.S. at 6 n.4).
The Court barred ATS actions against foreign corporations to avoid the “serious foreign policy consequences” entailed by permitting such suits to proceed. Id. (internal quotation marks omitted). In doing so, the Court indicated it was acting on concerns about the pendency of ATS litigation against foreign corporations at all, not merely about the ultimate prospect of a judgment against a foreign corporation on the merits. In Jesner itself, the Court observed, the pendency of the litigation had caused “prolonged diplomatic disruptions.” Id. And the bar against foreign corporate liability established in Jesner would afford a means of disposing of such cases at the outset, without the need to extend the proceedings for a more involved inquiry into questions like the “touch and concern” test for extraterritoriality. See id. at 1399 (plurality); id. at 1411 (Alito, J., concurring in part and concurring in the judgment). The bar as understood in Jesner thus aims to “preclude judicial inquiry” altogether, “not merely to defeat [ATS] claims” on the merits. Tenet, 544 U.S. at 6 n.4.
In Jesner, the extraterritoriality issue had been raised, and the government urged the Court to remand the case for resolution of that issue. See id. at 1398-99 (plurality). But the Court declined to do so, instead holding that foreign corporations are not subject to liability under the ATS. Insofar as extraterritoriality presents a jurisdictional issue in the context of the ATS, the Court could have bypassed that issue and reached the question of foreign corporate liability only if the latter issue were a non-merits one.
For those reasons, we conclude that Jesner‘s bar against foreign corporate liability “[a]t a minimum,” is a “non-merits threshold ground for dismissal” in the context of the ATS, on
* * * * *
For the foregoing reasons, we affirm the district court‘s dismissal of the plaintiffs’ ATS claims against the Banks. We vacate the district court‘s judgment dismissing the plaintiffs’ ATA claims against Hezbollah and Bank Saderat PLC, and remand for the district court to determine whether it has personal jurisdiction over the defendants.
So ordered.
I write separately to express my concern over two decisions of this court – Kramer v. Gates, 481 F.3d 788 (D.C. Cir. 2007), and Chalabi v. Hashemite Kingdom of Jordan, 543 F.3d 725 (D.C. Cir. 2008) – that appear to interpret Steel Co.‘s rule that a court must resolve jurisdictional issues prior to reaching the merits to apply only to “those primary issues related to Article III jurisdiction.” Kramer, 481 F.3d at 791; see also Chalabi, 543 F.3d at 728 (”Steel Co. requires that we prioritize the jurisdictional issue only when the existence of Article III jurisdiction is in doubt . . . .“). Our decision today properly distinguishes Chalabi and Kramer. Nevertheless, I think it is important to point out that Chalabi and Kramer, and the authorities on which they rely, do not follow the core principles that we have applied in reaching judgment in this case.
The references to “Article III jurisdiction” in the Chalabi and Kramer decisions seem to be limited to case-and-controversy requirements under Article III (e.g., standing and mootness), as distinguished from questions relating to “statutory jurisdiction” (e.g., jurisdictional time limits). Thus, in Kramer, we held that “issues related to . . . a statutory limit (even one classified as jurisdictional for many purposes)” are not primary under Steel Co. 481 F.3d at 791; see also Chalabi (stating that “[t]here is no Article III question here: [the plaintiff‘s claim] concerns only the limits of our statutory jurisdiction under the . . . Act“). The judgments in these cases appear to be correct when viewed with reference to the law extant at the time when the decisions were issued. The law has
Conceptually, this is unsurprising. Under
It is true that the Supreme Court has, at times, discussed the requirements of subject-matter jurisdiction in a manner that separates statutory authorization from constitutional authorization. See, e.g., Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986) (“Federal courts are not courts of general jurisdiction; they have only the power that is authorized by Article III of the Constitution and the statutes enacted by Congress pursuant thereto.“); Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005) (“[Courts] possess only that power authorized by Constitution and statute.“). But this merely highlights that both requirements exist; it does not intimate that the requirements delineated in a statutory grant of jurisdiction are any less a constraint on courts’ power than the requirements described directly in the Constitution.
In any event, the Kramer/Chalabi interpretation of Steel Co. appears to conflict with current Supreme Court precedent. That precedent indicates that the existence of statutory subject-matter jurisdiction, like other jurisdictional requirements, must be established before a court may reach an issue on the merits. The Court has not distinguished between statutory and Article
[Steel Co.] clarified that a federal court generally may not rule on the merits of a case without first determining that it has jurisdiction over the category of claim in suit (subject-matter jurisdiction) and the parties (personal jurisdiction). Without jurisdiction the court cannot proceed at all in any cause; it may not assume jurisdiction for the purpose of deciding the merits of the case.
While Steel Co. confirmed that jurisdictional questions ordinarily must precede merits determinations in dispositional order, Ruhrgas held that there is no mandatory sequencing of jurisdictional issues. In appropriate circumstances, Ruhrgas decided, a court may dismiss for lack of personal jurisdiction without first establishing subject-matter jurisdiction.
Both Steel Co. and Ruhrgas recognized that a federal court has leeway to choose among threshold grounds for denying audience to a case on the merits. Dismissal short of reaching the merits means that the court will not proceed at all to an adjudication of the cause.
549 U.S. at 430–31 (citations and internal quotation marks omitted). The Court‘s citation to Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999), is significant. In that case, the lower court failed to decide a statutory jurisdiction issue before addressing personal jurisdiction. Id. at 580–81. In holding that there is no mandatory ordering of jurisdictional issues, the Court clearly treated the issue of whether a claim fits within a
Thus, under Steel Co., a court without jurisdiction lacks “power to adjudicate the case” and, thus, may not act to decide the merits of the case. See 523 U.S. at 89. This principle applies equally whether jurisdiction is lacking because there is no case or controversy, or because Congress has declined to grant a lower court jurisdiction over a category of cases. Just as a plaintiff‘s lack of standing deprives the court of power to say what the law is, so too does Congress‘s decision to withhold power from the court. See Ex parte McCardle, 74 U.S. 506, 514 (1868) (“Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause.“).
It is a bit of an aside, but not insignificant, that the Court‘s decision in Sinochem also expanded upon Steel Co.‘s observation that there is no “absolute purity” in the rule that jurisdiction is always an antecedent question. Steel Co., 523 U.S. at 101. In fleshing out this point, Sinochem holds that forum non conveniens – a nonjurisdictional issue – can be decided prior to matters of jurisdiction. The Court explained that
[a] forum non conveniens dismissal denies audience to a case on the merits; it is a determination that the merits should be adjudicated elsewhere. . . . A district court therefore may dispose of an action by a forum non conveniens dismissal, bypassing questions of subject-matter and personal jurisdiction, when considerations of convenience, fairness, and judicial economy so warrant.
549 U.S. at 432 (citations and internal quotation marks
No one would contend that forum non conveniens constitutes a jurisdictional ground for dismissal. Indeed, the Sinochem decision refers to a district court‘s “discretion to” dismiss pursuant to the doctrine. Sinochem thus firmly establishes that certain non-merits, nonjurisdictional issues may be addressed preliminarily, because [j]urisdiction is vital only if the court proposes to issue a judgment on the merits.
Pub. Citizen v. U.S. Dist. Court for D.C., 486 F.3d 1342, 1348 (D.C. Cir. 2007) (citations and some quotation marks omitted).
It is unclear whether there is any meaningful symmetry between “non-merits, nonjurisdictional” and “jurisdictional” grounds for dismissal. Judgments on forum non conveniens, for example, are reviewed pursuant to a deferential abuse of discretion standard, Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257 (1981), whereas judgments on jurisdictional issues are reviewed de novo, Mwani v. bin Laden, 417 F.3d 1, 6 (D.C. Cir. 2005). And district court judges are not obliged to decide non-merits, nonjurisdictional issues such as forum non conveniens before addressing the merits. Therefore, if one assumes that Steel Co. deals solely with jurisdiction limitations, then forum non conveniens and other non-merits, nonjurisdictional issues can be viewed as an exception to Steel Co.‘s rule of priority.
In addition, there are some “non-merits threshold ground[s] for dismissal” that have the attributes of jurisdictional issues. Pub. Citizen, 486 F.3d at 1348–49 (pondering whether dismissal pursuant to the enrolled bill rule enunciated in Marshall Field & Co. v. Clark, 143 U.S. 649 (1892), is a “jurisdictional bar“). It is unclear whether these issues should be treated as “jurisdictional” or “non-merits, nonjurisdictional” issues. The difference is that a court cannot proceed to the merits if there are jurisdictional issues to be addressed; however, a court need not address non-merits, nonjurisdictional issues before deciding the merits.
The Steel Co. rule is thus now best understood to require the federal courts to decide jurisdictional issues first before reaching the merits, unless dismissal is based on a threshold non-merits, nonjurisdictional ground. See Sinochem, 549 U.S. at 432. And, as the Court explained in Sinochem, there is no priority given to “Article III jurisdiction” over “statutory jurisdiction.” Id. at 430–31. Indeed, a court may decide a non-merits, nonjurisdictional issue before a jurisdictional issue if it will dispose of the case. This current state of the law does not fit with the Kramer/Chalabi interpretation of Steel Co.
There is one final point worth mentioning with regard to the Kramer/Chalabi application of Steel Co. Both Kramer and Chalabi relied on a footnote in Steel Co. that they say “explicitly recognized the propriety of addressing the merits where doing so made it possible to avoid a doubtful issue of statutory jurisdiction.” Kramer, 481 F.3d at 791; Chalabi, 543 F.3d at 728. There are two problems with this analysis. First, the footnote in Steel Co. that is cited by Kramer and Chalabi discusses “statutory standing,” not “statutory jurisdiction.” Steel Co., 523 U.S. at 97 & n.2. And, as the Court explained in Steel Co., “statutory standing” is quite different from “statutory jurisdiction.” See id. at 91–92 (discussing statutory standing and statutory jurisdiction). “Statutory standing,” as the term was used in Steel Co., and other cases, concerned a party‘s cause of action, not the court‘s jurisdiction.
It may be that Kramer and Chalabi intended only to differentiate between types of “statutory jurisdiction” issues, drawing a line between those that must be decided first, such as federal question or diversity jurisdiction, and those that need not, such as waivers of sovereign immunity under a specific statute. See Kramer, 481 F.3d at 791 (skipping over sovereign immunity issue); Chalabi, 543 F.3d at 728 (skipping over foreign sovereign immunity issue). But see FDIC v. Meyer, 510 U.S. 471, 475 (1994) (“Sovereign immunity is jurisdictional in nature.“). And it may be that for reasons specific to the issues in those cases, their outcomes can be squared with the case law described above. But at the very least, the court‘s language interpreting Steel Co. appears to run head on into Supreme Court precedent. At an appropriate opportunity, the court should consider whether, in light of Sinochem and Lexmark, the Kramer/Chalabi distinction between statutory and Article III jurisdictional issues can be sustained.