I agree with the Supreme Court’s decision in Sinochem. I am concerned, however, that an unintended consequence of the opinion will be federal courts dismissing cases on forum non conveniens ("FNC") grounds where there is an obvious lack of subject matter jurisdiction.
I am particularly concerned about this possibility in the removal context. If district courts do not read Sinochem carefully, I predict we will see them ignoring remand motions in cases involving simple jurisdictional issues and issuing dismissals that are based on an FNC doctrine the state court would not have applied and that will not usually preclude the plaintiff from refiling in state court. Although such a result may seem justified by some of the categorical language early in the opinion, it flies in the face of Sinochem’s facts, the language late in the opinion limiting the holding, and the Court’s desire for effecient resolution of threshold, non-merits issues.
If district courts want wide latitude in choosing among the threshold issues they will first resolve, Sinochem, at least in its early parts, seems to give it to them. Writing for a unanimous court, Justice Ginsburg says in the first paragraph of the opinion:
We hold that a district court has discretion to respond at once to a defendant’s forum non conveniens plea, and need not take up first any other threshold objection. In particular, a court need not resolve whether it has authority to adjudicate the cause (subject-matter jurisdiction) or personal jurisdiction over the defendant if it determines that, in any event, a foreign tribunal is plainly the more suitable arbiter of the merits of the case.
The emphasis on the words "at once" and "any" are mine, not the Court’s. I add it because that’s what defendants will emphasize in their motions to dismiss, and district courts, eager to clear their dockets, may find it difficult to resist the following interpretation: if a district court is faced with more than one threshold, non-merits issue, it may choose which one it will first resolve without considering the relative complexity of the issues.
Consider the typical removal scenario. Where diversity jurisdiction is at issue, it is unlikely that the face of the complaint will demonstrate complete diversity of citizenship. Plaintiffs who prefer state court don’t just file suit there and hope the defendant doesn’t remove. Instead, they sue a diversity destroying and/or home state defendant. Plaintiffs employ this tactic not with high hopes the defendant won’t remove; but in hopes of winning a motion to remand, which usually involves the issue of fraudulent joinder. The defendant will move to dismiss using the expansive language in Sinochem to convince the district court that it need not concern itself with the fraudulent joinder/subject matter jurisdiction issue raised in plaintiff’s remand motion (whether simple or complex) so long as it is comfortable dismissing for forum non conveniens.
In the removal context, this result is particularly undesirable for two reasons. First, by removing a case wherein FNC is an issue, the defendant has ensured application of the federal FNC doctrine, as opposed to the state doctrine or statute. In my experience, where state FNC differs from federal FNC, it is generally more plaintiff-friendly than the federal doctrine. Misconstruing Sinochem, the district court will often reach a different outcome than the state court would have reached, and, in far too many cases, the district court will do so despite an obvious lack of subject matter jurisdiction.
Secondly, under Chick Kam Choo, the district court’s FNC dismissal does not necessarily have preclusive effect in state court. A plaintiff could refile the same suit in state court and relitigate the FNC issue under state law. (What if the defendant removes again?) Consequently, a district court’s decision to ignore a simple jurisdictional issue to dismiss the case on FNC grounds does not advance Sinochem’s efficiency concern.
To avoid this result, district courts must keep in mind that the Sinochem facts are a far cry from the run-of-the-mill FNC case. Sinochem involved a subject matter jurisdiction issue of first impression in the Third Circuit, and the jurisdiction of the alternative forum (a Chinese Admiralty court) had already been "raised, determined, and affirmed on appeal." The Court leaves open the possibility that the district court’s approach in Sinochem–ignoring the subject matter jurisdiction issue to resolve the FNC issue–would be inappropriate in a case where a conditional dismissal was necessary to pave the way for litigation in the foreign forum. The Court says:
We therefore need not decide whether a court conditioning a forum non conveniens dismissal on the waiver of jurisdictional or limitations defenses in the foreign forum must first determine its own authority to adjudicate the case.
The language at the end of the opinion is also critical to an accurate understanding of the Sinochem holding because it narrows what the Court might be understood to say earlier in the opinion. Quoting Ruhrgas, the court says:
If, however, a court can readily determine that it lacks jurisdiction over the cause or the defendant, the proper course would be to dismiss on that ground. In the mine run of cases, jurisdiction “will involve no arduous inquiry” and both judicial economy and the consideration ordinarily accorded the plaintiff’s choice of forum “should impel the federal court to dispose of [those] issue[s] first.”
Sinochem does not stand for the proposition that a federal district court may resolve a threshold forum non conveniens issue over any and all issues of subject matter jurisdiction. Instead, Sinochem merely permits a federal district court to resolve a relatively simple forum non conveniens issue without first resolving a complex jurisdictional issue.
For my part, I hope district courts avoid an expansive reading of Sinochem and are slow to find a jurisdictional issue whose complexity warrants ignoring it to dismiss a case on FNC grounds. In particular, I certainly hope district courts don’t believe that a defendant’s mere allegation of fraudulent joinder constitutes the kind of "arduous inquiry" that justifies skipping over the jurisdictional issue altogether.
–Counseller