Preclusion Principles

Exxon Mobil Corp. v. Saudi Basic Industries Corp.

Issues 

 
In 1980, Saudi Basic Industries Corporation (SABIC) and the Exxon (now Exxon Mobil Corp.) subsidiaries, Exxon Chemical Arabia, Inc (ECAI) and Mobil Yanbu Petrochemical Company (Yanbu) created two joint venture entities: Yanpet and Kemya. SABIC entered into sublicensing agreements with the two entities under which both were to pay royalties for use of an exclusive gas-phase process to manufacture polyethylene. Nearly twenty years later, Exxon Mobil, Yanbu, and ECAI claimed that SABIC actually charged Yanpet and Kemya more than the amount of royalties actually agreed upon.
 
In 2000, SABIC sued Yanbu and ECAI in the Delaware Superior Court seeking a declaratory judgment that the joint venture agreements had not been violated and that the royalty charges were correct. Exxon Mobil, Yanbu, and ECAI countersued in the United States District Court for the District of New Jersey, seeking the converse declaratory judgment. In 2003, the Delaware Superior Court returned a verdict against SABIC. SABIC has appealed the verdict, which is currently pending. Prior to the state court trial, SABIC moved to dismiss Exxon Mobil's federal court action claiming foreign sovereign immunity. The motion was denied and SABIC then appealed to the Court of Appeals for the Third Circuit. The federal appeals court did not address the sovereign immunity issue but vacated the District Court's orders with instructions for dismissal, finding that the Rooker-Feldman doctrine barred federal subject matter jurisdiction over the claims of Exxon and its subsidiaries because such was previously decided in the state court case. The Supreme Court faces the issue of whether the Rooker-Feldman doctrine, which bars lower federal courts from conducting de facto appellate review of decisions by state courts, may be interpreted to incorporate preclusion principles and deny jurisdiction to federal courts because a pending state-court proceeding presents identical issues, notwithstanding the long-established system of dual federal and state jurisdiction.

Questions as Framed for the Court by the Parties 

Whether the Rooker-Feldman doctrine, which bars lower federal courts from conducting de facto appellate review of decisions by state courts, may be expansively interpreted to 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.
In 1980, Saudi Basic Industries Corporation (SABIC) and the Exxon (now Exxon Mobil Corp.) subsidiaries, Exxon Chemical Arabia, Inc (ECAI) and Mobil Yanbu Petrochemical Company (Yanbu) created two joint venture entities: Yanpet and Kemya. Exxon Mobil Corp. v. Saudi Basic Industries Corp., 364 F.3d 102, 103 (3d. Cir. 2004). Yanpet was the joint venture between SABIC and Yanbu, and Kemya was the joint venture between SABIC and ECAI. Id. Both of these entities are limited liability partnerships engaged in the manufacturing of polyethylene in Saudi Arabia. Saudi Basic Industries Corp. v.

Acknowledgments 

Submit for publication 

0

Res judicata

Definition

Res judicata translates to "a matter judged." 

Overview

Generally, res judicata is the principle that a cause of action may not be relitigated once it has been judged on the merits. "Finality" is the term which refers to when a court renders a final judgment on the merits.

Res judicata is also frequently referred to as "claim preclusion," and the two are used interchangeably throughout this article. 

Subscribe to RSS - Preclusion Principles