Chaim Kaplan v. Hezbollah

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 12, 2017 Decided July 20, 2018

No. 16-7142

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

Appeal from the United States District Court

for the District of Columbia

(No. 1:10-cv-00483)

Meir Katz argued the cause for appellants. With him on

the briefs was Robert J. Tolchin.

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

2

v.

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.

*

Judge Kavanaugh was a member of the panel at the time the

cases were argued but did not participate in this opinion.

3

SRINIVASAN, Circuit Judge: These cases arise from a

barrage of rocket attacks launched by Hezbollah into northern

Israel in the summer of 2006. Plaintiffs are a group of

American, Israeli, and Canadian citizens who sued Hezbollah

and two foreign banks for injuries sustained during the attacks.

In one action, the American plaintiffs allege that Hezbollah’s

rocket attacks amounted to acts of international terrorism, in

violation of the Anti-Terrorism Act (ATA). In a second action,

all of the plaintiffs accuse the banks of funding Hezbollah’s

attacks, in violation of both the ATA and the Alien Tort Statute

(ATS).

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).

4

On July 12, 2006, Hezbollah militants left Lebanon,

crossed the Israeli border, and kidnapped and killed several

Israeli soldiers. Israel responded by mounting a ground

offensive in Lebanon and deploying a bombing campaign

against Hezbollah. Hezbollah then initiated a campaign of

rocket attacks, firing thousands of unguided rockets into

civilian populations in northern Israel, striking cities, towns,

and villages. The conflict ended on August 14, 2006, when the

United Nations brokered a cease-fire between Hezbollah,

Israel, and Lebanon. Over the course of the 34-day conflict,

numerous persons lost their lives, including more than 1,000

Lebanese civilians, between 250 and 500 members of

Hezbollah, 119 Israeli soldiers, and 43 Israeli civilians.

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

5

PLC both appeared and moved to dismiss the claims against

them for lack of subject-matter jurisdiction or personal

jurisdiction, and for failure to state a claim.

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.

6

II.

We initially consider two challenges to our appellate

jurisdiction. Under 28 U.S.C. § 1291, we may review “final

decisions” of the district courts in civil cases if an appeal is

taken within thirty days of entry of the judgment or order being

challenged. See Fed. R. App. P. 4(a)(1)(A). Bank Saderat PLC

and Bank Saderat Iran (the Banks) argue that plaintiffs’ appeal

is untimely because the district court entered its order

dismissing the claims against the Banks on August 20, 2013,

more than three years before the plaintiffs (on November 27,

2016) filed their notice of appeal concerning those claims.

Amicus, for its part, argues that plaintiffs’ appeal of the

dismissal of the claims against Hezbollah is premature because

the district court’s September 30, 2016, order was not a “final”

decision within the meaning of Section 1291. We disagree on

both counts.

A.

We first address the timeliness of the plaintiffs’ appeal of

the August 2013 dismissal of their claims against the Banks.

Federal Rule of Civil Procedure 54(b) governs the entry of final

judgment in a case involving multiple claims and parties. In

order to enter “a final judgment as to one or more, but fewer

than all, claims or parties,” a district court must “expressly

determine[] that there is no just reason for delay.” Fed. R. Civ.

P. 54(b). Otherwise, any decision “that adjudicates . . . the

rights and liabilities of fewer than all the parties” is not a final,

appealable judgment. Id.

Relatedly, our court has determined that unserved

defendants “are not ‘parties’ within the meaning of Rule

54(b).” Cambridge Holdings Grp., Inc. v. Fed. Ins. Co., 489

F.3d 1356, 1360 (D.C. Cir. 2007). Therefore, “a district court

7

order disposing of all claims against all properly served

defendants” generally constitutes a final judgment “even if

claims against those not properly served remain unresolved.”

Id. at 1360-61.

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 Rule 54(b), meaning that the August 2013 order

constituted a final judgment “disposing of all claims against all

properly served defendants.” Cambridge, 489 F.3d at 1361.

That order, the Banks submit, thus needed to be appealed

within 30 days. See Fed. R. App. P. 4(a)(1)(A).

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

8

further proceedings on unresolved claims against defendants

who have yet to be properly served, a decision resolving all the

claims against the properly served defendants is not a final,

appealable judgment. In that situation, any appeal should await

resolution of the contemplated further proceedings on the

claims against the as-yet-unserved defendants.

That approach vindicates Rule 54(b)’s central purpose of

avoiding the “piecemeal disposition of litigation.” Cambridge,

489 F.3d at 1361. It also ensures that Rule 54(b) continues to

enable district courts to lend “welcome certainty to the

appellate procedure.” Sears, Roebuck & Co. v. Mackey, 351

U.S. 427, 435 (1956). That is because, if a district court wishes

to allow the immediate appeal of its disposition of claims

against the properly served defendants even though it

affirmatively contemplates further proceedings on the

remaining claims, it can do so by expressly determining “that

there is no just reason for delay.” Fed. R. Civ. P. 54(b).

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 Fed. R. Civ. P. 1. The better course

is to recognize that, when a district court plainly contemplates

further proceedings on remaining claims against

as-yet-unserved defendants, the resolution of the claims against

9

properly served defendants is not a final, appealable judgment

(absent an express and reasonable determination of “no just

reason for delay” under Rule 54(b)). See Bldg. Indus. Ass’n of

Superior California v. Babbitt, 161 F.3d 740, 741 (D.C. Cir.

1998).

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 Fed. R.

10

App. P. 4(a)(4)(A)(iv). Plaintiffs timely filed their notice of

appeal within 30 days of that judgment.

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 Fed. R. Civ. P. 54(b). Amicus argues that we may lack

jurisdiction over the appeal concerning the claims against

Hezbollah insofar as the district court’s September 30, 2016,

order left unresolved certain of the claims in the case involving

Hezbollah. In particular, although the plaintiffs’ complaint in

that case alleged both Foreign Sovereign Immunities Act

(FSIA) claims and tort claims against North Korea, the district

court expressly referenced only the FSIA claims in its opinion

granting judgment on those claims. To the extent the tort

claims against North Korea remained unresolved, Amicus

contends, there may have been no final, appealable judgment.

We conclude that there was a final, appealable judgment

because the district court treated the FSIA and tort claims as a

11

common, undifferentiated whole. That is consistent with the

structure of the FSIA, under which foreign sovereigns are

rendered “liable in the same manner and to the same extent as

a private individual under like circumstances.” 28 U.S.C.

§ 1606; see Owens v. Republic of Sudan, 864 F.3d 751, 763-64

(D.C. Cir. 2017) (noting that because “[n]one of the original

exceptions in the FSIA created a substantive cause of action

against a foreign state,” plaintiffs bringing an FSIA claim

generally must rely on a source of “underlying substantive law”

such as tort law).

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

12

factor” in determining finality). We thus have appellate

jurisdiction to hear the appeal from that judgment.

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

13

the dismissal of the ATS claims based on the Supreme Court’s

decision in Jesner.

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).

14

B.

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

15

question, a court must first determine that it possesses personal

jurisdiction over the defendants before it can address the merits

of a claim.

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

16

a question of personal jurisdiction. Those decisions instead

addressed the applicability of Steel Co. to a question of

statutory jurisdiction, not personal jurisdiction, concluding that

the Steel Co. rule did not govern in the specific circumstances.

See Chalabi, 543 F.3d at 728; Kramer, 481 F.3d at 791.

(Insofar as the continuing vitality of those decisions may be

open to question even in the sphere of statutory jurisdiction in

which they arose, see infra at 1-7 (Edwards, J., concurring), we

need not resolve that issue in this case.)

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.

17

Here, the Banks raised a challenge to the district court’s

personal jurisdiction in the case containing the claims against

them, seeking dismissal on that ground. And while the Banks

could have waived that objection on appeal, see World Wide

Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154, 1164

(D.C. Cir. 2002), they instead reiterated the objection. See

Banks’ Appellee Br. 5 n.3.

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

18

exception goes to a district court’s subject-matter jurisdiction,

not the merits, and Amicus agrees that the exception’s

applicability poses a jurisdictional question. We disagree and

conclude that the act-of-war exception presents a merits issue,

not a jurisdictional one. As a result, the district court could not

rely on the exception without first establishing personal

jurisdiction.

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. 18 U.S.C. § 2333(a).

An act qualifies as “international terrorism” only if it violates

a domestic criminal law (either state or federal) and intends to

coerce a civilian population, influence government policy, or

affect government conduct. Id. § 2331(1).

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.”

Id. § 2336(a). “Act of war” is a term of art under the statute,

19

defined to include “any act occurring in the course of” any of

the following: a “declared war,” an “armed conflict, whether

or not war has been declared, between two or more nations,” or

an “armed conflict between military forces of any origin.” Id.

§ 2331(4).

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.” 18

U.S.C. § 2334; see id. § 2338 (granting federal district courts

exclusive jurisdiction). The act-of-war exception is found in a

section entitled “Other limitations,” along with provisions

pertaining to non-jurisdictional limitations on discovery and to

stays of ATA actions pending criminal proceedings. Id.

§ 2336.

Section 2336’s “Other limitations” are appended to—and

naturally coupled with—the immediately preceding section,

entitled “Limitations of actions.” Id. § 2335. Section 2335 sets

out the statute of limitations governing ATA claims. And

given that statutes of limitations “ordinarily are not

jurisdictional,” Sebelius, 568 U.S. at 154, Congress’s pairing

of the statute of limitations with the act-of-war exception

indicates that the exception likewise is non-jurisdictional.

20

Amicus notes that, even if the act-of-war exception is not

housed in a provision pertaining to jurisdiction, the exception

cross-references Section 2333, and subsection (a) of the latter

provision is entitled “Action and jurisdiction.” 18 U.S.C.

§ 2333(a). That subsection, in accordance with its title, serves

two purposes: it both establishes the availability of a civil

action under the ATA and vests jurisdiction in district courts

over such an action. The cross-reference pertains to the former

(“action”), not the latter (“jurisdiction”), by forging an

exception for acts of war to the availability of an action to

recover for “an act of international terrorism.” Id. The

cross-reference thus affords no basis for concluding that the

act-of-war exception is jurisdictional.

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. 18

U.S.C. § 2333(a). Whether the challenged conduct qualifies as

“an act of international terrorism” plainly goes to the merits of

an ATA action. So too, presumably, is the case with an

associated exception that exempts conduct from the primary

category of international terrorism.

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

21

questions. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574,

585 (1999); Tenet v. Doe, 544 U.S. 1, 6 n.4 (2005).

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

22

commitment of the issue” to another branch of government or

a “lack of judicially discoverable and manageable standards for

resolving” them. Zivotofsky ex rel. Zivotofsky v. Clinton, 566

U.S. 189, 195 (2012).

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.”

28 U.S.C. § 1350. The Supreme Court has established that “the

presumption against extraterritoriality” governs the ATS’s

reach. Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108,

124 (2013). ATS claims involving extraterritorial activity can

“displace the presumption” only if “the claims touch and

concern the territory of the United States . . . with sufficient

force.” Id. at 124-25.

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

23

ground that Hezbollah’s rocket attacks did not sufficiently

“touch and concern” the United States. Kaplan, 961 F. Supp.

2d at 205. The court considered its disposition on that ground

to be a dismissal “for lack of subject matter jurisdiction.” Id.

at 204.

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 Federal Rule of Appellate Procedure 28(j), contending

that we could affirm the dismissal of the ATS claims against

24

the Banks based on Jesner. The plaintiffs did not submit a

letter in response, and have not disputed that the Banks are

foreign corporations for purposes of the Jesner rule.

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).

25

The Court’s analysis in Jesner is instructive in that regard.

The Court explained that, whereas the object of the ATS is to

“promote harmony in international relations,” allowing ATS

actions against foreign corporations could have the “opposite”

effect. 138 S. Ct. at 1406. For instance, Arab Bank, the

defendant in Jesner, is “a major Jordanian financial

institution.” Id. And the ATS litigation against Arab Bank,

which had lasted for 13 years, had “caused significant

diplomatic tensions with Jordan, a critical ally in one of the

world’s most sensitive regions.” Id. (internal quotation marks

omitted). “As demonstrated by this litigation,” the Court

reasoned, “foreign corporate defendants create unique

problems” vis-à-vis the conduct of foreign relations. Id. at

1407.

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.

26

The interplay between the corporate liability and

extraterritoriality issues in Jesner reinforces the

foreign-corporate-liability bar’s threshold character. The

Court previously described the extraterritoriality rule for ATS

cases as involving, not whether a complaint “state[s] a proper

claim under the ATS,” but instead “whether a claim may reach

conduct occurring in the territory of a foreign sovereign.”

Kiobel, 569 U.S. at 115; see Pub. Citizen, 486 F.3d at 1348

(distinguishing between a “merits dismissal for failure to state

a claim” and a threshold, non-merits disposition). And the

Court observed that, although “the question of extraterritorial

application” is typically a “merits question, not a question of

jurisdiction,” the “ATS, on the other hand, is strictly

jurisdictional.” Kiobel, 569 U.S. at 116 (internal quotation

marks omitted). The Court, then, treated extraterritoriality in

the ATS context as a jurisdictional matter. See Doe v.

Drummond Co., 782 F.3d 576, 584 (11th Cir. 2015) (holding

that extraterritoriality under ATS is a jurisdictional issue);

Mastafa v. Chevron Corp., 770 F.3d 170, 179 (2d Cir. 2014)

(same); Al Shimari v. CACI Premier Tech., Inc., 758 F.3d 516,

524, 531 (4th Cir. 2014) (same).

In Jesner, the extraterritoriality issue had been raised, and

the government urged the Court to remand the case for

resolution of that issue. See 138 S. Ct. 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

27

which we can rely without resolving the existence of personal

jurisdiction. Pub. Citizen, 486 F.3d at 1349; cf. Doe, 782 F.3d

at 584 (holding that corporate liability under the ATS is a

jurisdictional question); Mastafa, 770 F.3d at 179 (same). We

therefore affirm the district court’s dismissal of the ATS claims

against the Banks based on the Supreme Court’s decision in

Jesner.

* * * * *

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.

EDWARDS, Senior Circuit Judge, concurring: I join the

opinion of the court in full. As Judge Srinivasan cogently

explains, Sinochem International Co. Ltd. v. Malaysia

International Shipping Corp., 549 U.S. 422 (2007), confirms

that the rule of priority the Supreme Court announced in Steel

Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998),

extends to personal jurisdiction.

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

2

evolved, however, so I doubt that we can now say that a lack

of statutory jurisdiction need not be a barrier to deciding issues

on the merits.

Conceptually, this is unsurprising. Under Article III,

jurisdiction is limited both by the bounds of the “judicial

power” as articulated in Article III, § 2, and by the extent to

which Congress has vested that power in the lower courts, see

U.S. CONST. art. III, § 1. The distinction between statutory

limitations on subject-matter jurisdiction and other Article III

jurisdictional limitations is tenuous, as both limitations arise

from Article III.

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

3

III subject-matter jurisdiction for this purpose. The Court

makes this point clear in Sinochem:

[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

4

statutory grant of subject-matter jurisdiction as being covered

by the Steel Co. rule of priority.

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

5

omitted). The Court held that “a district court has discretion to

respond at once to a . . . forum non conveniens plea, and need

not take up first any other threshold objection [such as] . . .

whether it has authority to adjudicate the cause.” Id. at 425.

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

6

(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.

7

Second, in Lexmark International, Inc. v. Static Control

Components, Inc., 134 S. Ct. 1377 (2014), the Court clarified

the law in explaining that “statutory standing,” which was

formerly associated with the question as to whether a plaintiff’s

claim fell within a statute’s “zone of interests,” is a misnomer.

“Statutory standing,” the Court explained, is a “misleading”

reference to cause of action, and “cause of action” “does not

implicate subject-matter jurisdiction.” Id. at 1387 n.4. Because

“statutory standing” issues are not jurisdictional at all, they

obviously fall outside of the Steel Co. rule of priority for

jurisdictional issues. Again, this current state of the law cannot

be squared with the Kramer/Chalabi understanding of Steel

Co. and the rule of priority emanating from that decision.

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.