Ruhrgas Ag v. Marathon Oil Co. - 526 U.S. 574, 119 S. Ct. 1563 (1999)

Rule:

A federal district court is not barred from dismissing a removed case for lack of personal jurisdiction without first deciding its subject-matter jurisdiction. In cases removed from state court to federal court, as in cases originating in federal court, there is no unyielding jurisdictional hierarchy. Customarily, a federal court first resolves doubts about its jurisdiction over the subject matter, but there are circumstances in which a district court appropriately accords priority to a personal jurisdiction inquiry.

Facts:

Plaintiff corporations initiated an action against defendant petitioner in Texas state court for various business torts. Defendant removed the case to federal court on the basis of diversity of citizenship. Defendant moved to dismiss for lack of personal jurisdiction and plaintiff moved to remand the case to state court on the basis of lack of subject matter jurisdiction. The district court granted defendant's motion to dismiss, and a panel of the court of appeals rejected defendant's basis for federal jurisdiction and remanded to state court. The court of appeals, en banc, vacated the panel's decision and held that subject matter jurisdiction must be decided before personal jurisdiction. Defendant appealed. 

Issue:

Should the subject matter jurisdiction be decided before personal jurisdiction? 

Answer:

No.

Conclusion:

The Supreme Court, upon petitioner's writ of certiorari, reversed and remanded the lower court's holding. The Court held that a federal court might dismiss on the basis of either subject matter or personal jurisdiction, and that subject matter jurisdiction need not be determined prior to personal jurisdiction. Moreover, the Court reasoned that both subject matter and personal jurisdiction were needed in federal court, therefore it was not mandatory for a court to look at both types of jurisdiction.