2. Background and Procedural History
The parties and settlement representations
Temu sued Gluck, Gluck Law Firm, P.C., Cookies SF LLC, and Alec Monopoly Art, LLC and Alec Monopoly, LLC. The opinion refers to the latter two entities collectively as “Alec Monopoly.” Gluck represented Cookies SF and Alec Monopoly in their earlier disputes with Temu.
According to the complaint, Gluck negotiated the settlements and personally signed provisions stating that he and his firm:
- Currently had no clients who intended to sue Temu; and
- Had no present intention of advertising or marketing for additional clients.
Those statements were qualified by language expressly preserving Gluck’s right to represent clients against Temu, bring claims, and advertise for additional clients. Gluck also acknowledged that the settlements rested on assurances that the representations were truthful and accurate, and that a material breach would permit available remedies.
That distinction is important: the disputed statements concerned existing circumstances and present intentions, while the agreements expressly preserved future professional activity. Whether the allegations adequately established actionable falsity, contractual liability, or another basis for relief remained unresolved on appeal.
Temu’s allegations and claims
Temu alleged that Gluck advertised for new clients shortly after signing the agreements but before they became effective. It further alleged that, shortly after effectiveness, he threatened another lawsuit on behalf of clients with whom he had longstanding relationships. An email referring to several years of investigation allegedly supported Temu’s contention that the earlier representations were false.
The complaint asserted intentional misrepresentation and fraudulent inducement, negligent misrepresentation, breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. Temu sought, among other relief, rescission of the settlements and repayment of settlement proceeds, or damages instead.
These were allegations, not judicial findings. The appellate court accepted the well-pleaded allegations as true for purposes of reviewing the merits dismissals; it did not determine whether Gluck had actually made false statements.
The district court’s rulings
All defendants sought dismissal under Federal Rule of Civil Procedure 12(b)(6). Gluck and Cookies SF also challenged personal jurisdiction under Rule 12(b)(2). Their objections concerned whether their contacts with Massachusetts sufficed to subject them to suit there. Alec Monopoly did not contest personal jurisdiction below.
The district court granted the merits-based dismissal motions and expressly declined to decide the jurisdictional objections. It subsequently awarded contractual attorney fees to Cookies SF and Alec Monopoly and denied Gluck’s request for Rule 11 sanctions against Temu and its lawyers.
Temu appealed the dismissals and fee awards. Gluck cross-appealed the denial of sanctions, while continuing to contest personal jurisdiction.
4. Analysis: Legal Reasoning and Precedents Cited
A. Personal jurisdiction is a prerequisite to merits adjudication
The court’s reasoning begins with the distinction between having a persuasive answer to a lawsuit and possessing judicial authority to give that answer. A Rule 12(b)(6) dismissal determines the legal sufficiency of the plaintiff’s claims. It is therefore a merits decision, even when it favors the defendant challenging jurisdiction.
The opinion draws on several Supreme Court decisions to establish that personal jurisdiction is not optional merely because the proposed judgment would benefit the objecting party:
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Lightfoot v. Cendant Mortg. Corp., 580 U.S. 82, 95 (2017), supplies the direct proposition that a court must have power over the parties before resolving a case. The First Circuit treats this requirement as a threshold limitation on adjudication, not simply a matter of efficient case management.
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Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 706 (1982), explains both the source and character of that limitation. Personal jurisdiction derives from due process and protects individual liberty. Until it is established, exercising judicial power over the defendant violates that protection. Because the protection is individual, however, it can be waived.
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Fuld v. Pal. Liberation Org., 606 U.S. 1, 11, 16 (2025), reinforces the due-process foundation of personal jurisdiction. Its role here is confirmatory: personal jurisdiction is constitutionally significant even though its source differs from Article III’s case-or-controversy requirement.
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Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577, 584–86 (1999), establishes that personal jurisdiction is an essential component of a district court’s adjudicatory authority. It also explains that courts may choose the order in which they resolve jurisdictional questions. That flexibility concerns which threshold issue comes first; it does not authorize deciding the merits before jurisdiction.
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Emps. Reinsurance Corp. v. Bryant, 299 U.S. 374, 382 (1937), appears through the Supreme Court’s discussion in Ruhrgas AG v. Marathon Oil Co.. It supplies the foundational statement that, without the requisite jurisdiction, a district court is powerless to proceed to adjudication.
These authorities also explain why the holding concerns preserved objections. Personal jurisdiction may be waived or accepted through consent. The opinion does not require courts to manufacture objections for defendants who have not asserted them.
B. Rejecting “hypothetical jurisdiction”
The principal obstacle to the district court’s approach was the prohibition against assuming jurisdiction solely to reach an easier merits answer.
In Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 93–104 (1998), the Supreme Court rejected “hypothetical jurisdiction”: deciding the merits while leaving the court’s authority unresolved. Such a judgment amounts to an advisory exercise of judicial power. The decision also identifies the party invoking federal jurisdiction as bearing the burden of establishing it.
Although Steel Co. v. Citizens for a Better Env’t concerned Article III standing, the First Circuit refused to confine the sequencing principle to that setting. It relied particularly on Sinochem Int’l Co. Ltd. v. Malay. Int’l Shipping Corp., 549 U.S. 422, 430–33 (2007), which expressly addresses both subject-matter and personal jurisdiction. Under that decision, a federal court generally cannot decide the merits before establishing authority over both the category of dispute and the parties.
Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514 (1869), appears within this chain of authority for the foundational proposition that a court cannot proceed without jurisdiction. The opinion applies that proposition consistently with the modern distinction between merits judgments and permissible threshold, nonmerits dispositions.
The practical conclusion is straightforward: the district court could not dismiss Temu’s claims on their merits while expressly leaving the defendants’ jurisdictional objections unanswered. Nor could the appellate court cure the problem by independently resolving the substantive appeal before addressing jurisdiction.
C. Reconciling contrary First Circuit precedent
The opinion’s most significant precedential work concerns earlier First Circuit decisions that appeared to authorize precisely this shortcut.
N. Am. Cath. Educ. Programming Found., Inc. v. Cardinale, 567 F.3d 8, 12 (1st Cir. 2009), allowed a court facing a difficult jurisdictional issue to dispose first of claims that were easily resolved in favor of the party contesting jurisdiction. That decision first eliminated claims under Rule 12(b)(6), then considered personal jurisdiction over what remained.
It relied on Kotler v. Am. Tobacco Co., 926 F.2d 1217, 1221 (1st Cir. 1990), vacated on other grounds, 505 U.S. 1215 (1992). The First Circuit concluded that this line of reasoning could no longer justify bypassing contested personal jurisdiction.
Two features of the Supreme Court’s intervening guidance were decisive:
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Steel Co. v. Citizens for a Better Env’t postdated Kotler v. Am. Tobacco Co. and expressly rejected the broad reading of Norton v. Mathews, 427 U.S. 524 (1976), and Sec’y of the Navy v. Avrech, 418 U.S. 676 (1974) (per curiam), on which Kotler v. Am. Tobacco Co. had relied. Those decisions did not establish a general license to decide easy merits questions on assumed jurisdiction.
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Sinochem Int’l Co. Ltd. v. Malay. Int’l Shipping Corp. postdated McBee v. Delica Co. Ltd., 417 F.3d 107, 126–27 (1st Cir. 2005), which had read the prohibition on hypothetical jurisdiction as limited to Article III questions. The Supreme Court’s express inclusion of personal jurisdiction undermined that narrow understanding.
Importantly, N. Am. Cath. Educ. Programming Found., Inc. v. Cardinale itself followed Sinochem Int’l Co. Ltd. v. Malay. Int’l Shipping Corp. chronologically. The present opinion nevertheless rejects its reliance on the older shortcut as incompatible with controlling Supreme Court doctrine.
The law-of-the-circuit doctrine
Departing from an earlier circuit panel requires more than disagreement. United States v. Guerrero, 19 F.4th 547, 550, 552 (1st Cir. 2021), states the ordinary rule that one panel’s resolution of a legal issue binds later panels.
Eulitt ex rel. Eulitt v. Me., Dep’t of Educ., 386 F.3d 344, 349–50 (1st Cir. 2004), identifies exceptions when controlling authority undermines an earlier panel decision or subsequent Supreme Court precedent legitimately calls it into question. The court invoked these exceptions to conclude that the earlier jurisdictional shortcut was no longer available.
The result is a targeted doctrinal displacement: prior circuit language cannot support merits adjudication while a preserved constitutional personal-jurisdiction objection remains unresolved. The court did not purport to discard every holding of the earlier decisions.
The opinion also cited Rodríguez-Rivera v. Allscripts Healthcare Sols., Inc., 43 F.4th 150, 162 n.8 (1st Cir. 2022), as evidence that the circuit had already moved toward the correct sequencing rule. That decision expressly recognized that jurisdiction over both the claims and the parties generally must precede merits adjudication.
D. What procedural flexibility remains?
The holding does not impose a rigid ordering of every preliminary question.
- Jurisdictional questions may be sequenced flexibly. Under Ruhrgas AG v. Marathon Oil Co., courts may address an easier jurisdictional issue before a harder one because neither resolution assumes authority to declare the substantive law governing the dispute.
- Some nonmerits dismissals may precede jurisdiction. Sinochem Int’l Co. Ltd. v. Malay. Int’l Shipping Corp. permits dismissal on forum non conveniens grounds when convenience, fairness, and judicial economy warrant. Such a disposition does not adjudicate the underlying claims.
- The circuit’s statutory-jurisdiction qualification remains. In re Fin. Oversight & Mgmt. Bd. for P.R., 916 F.3d 98, 114 n.13 (1st Cir. 2019), recognizes a circuit practice permitting hypothetical jurisdiction when the bypassed issue is statutory. The present opinion expressly distinguishes that category from the constitutional personal-jurisdiction issue before it.
Waleski v. Montgomery, McCracken, Walker & Rhoads, LLP, 143 S. Ct. 2027, 2027–28 (2023), is cited through Justice Thomas’s dissent from denial of certiorari, joined by Justices Gorsuch and Barrett, to acknowledge a circuit split over hypothetical statutory jurisdiction. That dissent is not a Supreme Court holding approving the practice. The present decision leaves that broader disagreement unresolved.
E. Why contrary secondary authority did not persuade the court
The court directly addressed Wright & Miller’s Federal Practice & Procedure, § 1067.6, which described resolving clear merits questions in favor of a jurisdiction-challenging defendant without deciding jurisdiction.
The relevant supporting authority was In re Enter. Rent-A-Car Wage & Hour Emp. Pracs. Litig., 735 F. Supp. 2d 277, 328–29 (W.D. Pa. 2010), affirmed, 683 F.3d 462 (3d Cir. 2012). The First Circuit found that neither the district court nor the affirming appellate decision analyzed Sinochem Int’l Co. Ltd. v. Malay. Int’l Shipping Corp.. Their approach also conflicted with the doctrinal direction reflected in the First Circuit’s more recent decisions.
The treatment illustrates the hierarchy of authority: a respected treatise and out-of-circuit decisions cannot preserve a procedural shortcut inconsistent with governing Supreme Court principles.
F. The remedy and the remaining procedural precedents
Tagayun v. Lever & Stolzenberg, 239 F. App’x 708, 710 (3d Cir. 2007) (per curiam), supplied persuasive support for vacating a merits dismissal entered without first resolving personal jurisdiction and remanding for the proper threshold inquiry.
Intec USA, LLC v. Engle, 467 F.3d 1038, 1041 (7th Cir. 2006), quoted through Sinochem Int’l Co. Ltd. v. Malay. Int’l Shipping Corp., reinforces why that remedy was necessary: jurisdiction is indispensable when the court proposes to enter a judgment on the merits.
Under Sharfarz v. Goguen (In re Goguen), 691 F.3d 62, 72 (1st Cir. 2012), and 28 U.S.C. § 2106, the appellate court possessed broad authority to structure the remand. It used that flexibility to return the interconnected disputes together rather than deciding Alec Monopoly’s merits issues in isolation.
That treatment did not establish that personal jurisdiction was lacking over Alec Monopoly. Instead, Temu’s allegations linked the defendants through agency, ratification, shared settlement representations, and the requested rescission. Temu also argued that the defendants were indispensable parties. The court considered it premature to resolve Alec Monopoly’s position before the jurisdictional questions concerning the others had been answered; it did not decide the indispensable-party issue.
Carreras v. PMG Collins, LLC, 660 F.3d 549, 557 (1st Cir. 2011), supports allowing factual development on remand. The district court may obtain additional briefing, hear argument, and develop facts relevant to personal jurisdiction rather than having the appellate court decide a complicated record initially.
Two additional sets of citations have narrower functions:
- Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55–56 (1st Cir. 2012), explains why the complaint’s well-pleaded allegations were viewed favorably to Temu when reviewing the Rule 12(b)(6) dismissals. That standard does not establish the allegations as true or resolve the distinct jurisdictional inquiry.
- Rosenthal v. Bloomingdales.com, LLC, 101 F.4th 90, 98 (1st Cir. 2024) (Thompson, J., concurring dubitante), and Donatelli v. Nat’l Hockey League, 893 F.2d 459, 462 (1st Cir. 1990), appear in a contextual observation about personal jurisdiction’s complexity. They do not supply the operative sequencing rule.
5. Impact and Limits of the Decision
A stronger threshold obligation in First Circuit litigation
The decision removes uncertainty created by conflicting circuit language. District courts may no longer rely on the supposed simplicity of a Rule 12(b)(6) dismissal to avoid a properly preserved personal-jurisdiction objection.
For plaintiffs, this underscores the need to establish forum authority independently of the strength of their substantive allegations. For defendants, it means that alternative jurisdictional and merits arguments must be addressed in a lawful sequence; the availability of a favorable merits disposition does not itself eliminate a maintained jurisdictional objection.
Consequences for settlement disputes
Multijurisdictional settlement negotiations can generate litigation involving lawyers, clients, communications, and alleged injuries in different states. This decision requires courts to confront the jurisdictional consequences of those relationships before determining substantive liability.
It does not, however, establish that negotiating or signing an agreement with a Massachusetts-based business is sufficient—or insufficient—to create personal jurisdiction. The defendants’ competing arguments about their Massachusetts contacts were left for remand.
Interconnected defendants may require coordinated treatment
The inclusion of Alec Monopoly in the remand illustrates how jurisdictional issues affecting some defendants may influence the orderly resolution of claims against others. Agency allegations, requests to unwind agreements, and required-party arguments can make piecemeal appellate decisions impractical.
This is a case-specific procedural judgment, not a rule that one defendant’s jurisdictional objection automatically prevents adjudication against every other defendant.
No substantive victory on fraud, fees, or sanctions
Vacatur eliminated the challenged rulings but did not establish that Temu’s claims were valid. The court likewise did not decide whether the settlements authorized attorney fees or whether Temu’s litigation warranted Rule 11 sanctions.
The directions to reconsider sanctions form part of this case’s remand framework. The opinion does not separately analyze the broader doctrine governing collateral sanctions or hold that every sanctions determination necessarily requires personal jurisdiction over the underlying merits dispute.