March 22, 2017
by Blair Gisi
SouthLaw, P.C. – USFN Member (Iowa, Kansas, Missouri)
In a recent decision by the U.S. District Court for the District of Kansas, additional light was shed on the types of actions — specifically within the creditors’ rights context — that are denied jurisdiction under the Rooker-Feldman Doctrine.
The complaint filed in Love v. SouthLaw, P.C., No. 16-1310-JTM, 2017 U.S. Dist. LEXIS 30669 (D. Kan. Mar. 3, 2017), inter alia, alleged that the defendant law firm (the foreclosing law firm in a state court action) had wrongfully relied on service by publication to take a default judgment and extinguish any remaining redemption rights of the borrower. The default judgment and extinguishment of redemption ultimately resulted in the loss of the borrower’s personal property. The law firm was accused of several FDCPA violations based on its reliance upon service by publication.
In its motion to dismiss and supporting memorandum, the law firm, in relevant part, relied on the Rooker-Feldman Doctrine to assert that the court lacked jurisdiction over the plaintiff’s claims. The gist of the doctrine is that a state court loser cannot use the federal courts as a de facto appellate court to seek relief from damages caused by the state court judgment. See Rooker v. Fidelity Trust Co., 263 U.S. 413 (1983), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983).
As noted by the court in the Love case, the standard for whether Rooker-Feldman applies is whether a claim is “inextricably intertwined” with the validity of the underlying state court judgment. Citing the Tenth Circuit, the district court found, “[a] claim is inextricably intertwined if the state-court judgment caused, actually and proximately, the injury for which the federal court plaintiff seeks redress.” Tal v. Hagan, 453 F.3d 1244, 1256 (10th Cir. 2006) cert. denied, 549 U.S. 1209 (2007).
To further elucidate when Rooker-Feldman bars jurisdiction, the court cited several other Tenth Circuit decisions in determining that the true test of applicability is to analyze the real relief being sought by the federal plaintiff:
“Where a plaintiff seeks a remedy that would ‘disrupt or undo’ a state court judgment, the federal claim is inextricably intertwined with the state court judgment.” Crutchfield v. Countrywide Home Loans & Mortgage Electronic Registration Systems, 389 F.3d 1144, 1148 (10th Cir. 2004) (emphasis added);
“The relief requested by Plaintiff would require this court to undermine the state court judgment in the loan collection action. Therefore, the Rooker-Feldman doctrine applies . . . .” Curnal v. LVNV Funding, No. 10-2610-EFM, WL 2970816, *2 (D. Kan. July 20, 2011) (emphasis added); and
“The requested relief . . . would effectively ‘undo’ the state court judgment and the court grants defendants’ motion to dismiss to the extent plaintiffs’ claim for actual damages stems from the judgment’s affect . . . .” McCammon v. Bibler, Newman & Reynolds, 515 F. Supp. 2d 1220, 1239 (D. Kan. 2007) (emphasis added).
The court furthered this line of cases in finding that the plaintiff would have suffered no injury but for the state court judgment and that the only “successful resolution of [the] issues would require directly repudiating the findings of the state court.” Love, 2017 LEXIS 30669 at *6-7.
Because the state court concluded proper service was had on all parties in the Journal Entry of Judgment of Foreclosure and Order to Extinguish Redemption Rights, the plaintiff in this district court case could not circumvent the application of the Rooker-Feldman Doctrine because of her reliance on the argument that service was improper rendering the judgment void.
Also of note, SouthLaw, P.C. argued in its motion to dismiss that it was not acting as a debt collector for purposes of the FDCPA; however, because the district court lacked jurisdiction to entertain the FDCPA action, those arguments were not analyzed or ruled on.
Editor’s Note: For convenient reference, an earlier article by this author discussing the Jurisdiction of Federal Claims and the Rooker-Feldman Doctrine, which was published in the USFN e-Update (Jan. 2017 Ed.), can be viewed here.
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