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Jurisdiction of Federal Claims: When is the Rooker-Feldman Doctrine a Bar?

Posted By USFN, Tuesday, January 10, 2017
Updated: Monday, January 9, 2017

January 10, 2017

by Blair Gisi
SouthLaw, P.C. – USFN Member (Iowa, Kansas, Missouri)

Can the Rooker-Feldman doctrine bar jurisdiction of federal claims? Like any good and interesting legal question, the answer is: “it depends.” To begin, a brief description of the Rooker-Feldman doctrine is in order.

The Rooker-Feldman doctrine arose from two cases: Rooker v. Fidelity Trust Co., 263 U.S. 413 (1983) and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983). The original purpose of the doctrine was to protect against the federal courts becoming de facto appellate courts for state-court losers. It was codified as 28 USCS § 1257. However, the idea behind Rooker-Feldman began to preclude jurisdiction in a larger scope than intended; so, in 2005, the doctrine was reined in and refined.

In Exxon Mobil Corporation v. Saudi Basic Industries Corporation, 544 U.S. 280 (2005), the U.S. Supreme Court confined the Rooker-Feldman doctrine only to “cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.” This ruling stands for the general proposition that the doctrine does not apply to challenges of the legal conclusions found in the state court action if there is no challenge to the state court judgment. Moreover, prior litigation and even a prior related judgment do not necessarily prompt application of the Rooker-Feldman doctrine.

In the mortgage servicing industry, the doctrine is often seen in the context of alleged violations of the numerous federal regulations. It can come up where there is a question as to the manner and effect of service, as well as in the context of required affidavits for different purposes, or to obtain default judgment. Review of the relevant case law suggests that the nature of the alleged regulation violation is a good indicator as to whether Rooker-Feldman can, and should, bar federal jurisdiction.

Federal Regulation Violations
Clear violations of federal regulations lend themselves to attacks on legal conclusions found by a state court without attacking the underlying judgment itself. In other words, if the well-pled complaint alleges blatant violations of federal regulations, the federal court is unlikely to find that Rooker-Feldman bars jurisdiction.

Shortly after the Exxon case, the Sixth Circuit found that a plaintiff’s injuries that were suffered from a debt collector’s use and reliance on a false affidavit in garnishing a bank account (related to exempt versus non-exempt funds) were injuries suffered by the plaintiff independent of the state court judgment. See Todd v. Weltman, Weinberg & Reis Co., L.P.A., 434 F.3d 432 (6th Cir. 2006). The court in Todd relied on the fraudulent nature of the affidavit to find that Rooker-Feldman did not bar jurisdiction.

A recent Eighth Circuit case, Hageman v. Barton, 817 F.3d 611 (2016), involved collection of a medical debt that had been assigned from a medical center to an individual (Roger Weiss) or his collection agency. Weiss and his collection agency, in turn, hired attorney Dennis Barton. The lawyer named the medical center as the creditor and obtained a default judgment and garnished wages without expressly indicating by pleadings, or correspondence with the debtor, the real party in interest — although Barton did attach the medical center’s assignment document to the complaint filed in state court. The Eighth Circuit, in deciding Hageman, used the following standard in finding that Rooker-Feldman did not bar jurisdiction: “If a federal plaintiff asserts as a legal wrong an allegedly erroneous decision by a state court, and seeks relief from a state court judgment based on that decision, Rooker-Feldman bars [subject matter] jurisdiction [in federal district court]. If, on the other hand, a [federal] plaintiff asserts [as a legal wrong] an allegedly illegal act or omission by an adverse party, Rooker-Feldman does not bar jurisdiction.” [citing Riehm v. Engelking, 538 F.3d 952, 965 (8th Cir. 2008), which quoted the Ninth Circuit’s language in Noel v. Hall, 341 F.3d 1148, 1164 (2003) (cited favorably in Exxon, 544 U.S. at 293)].

As alluded to, where there is no clear violation of federal regulation, a court may be more inclined to bar jurisdiction under this doctrine. For example, in Crutchfield v. Countrywide Home Loans, 389 F.3d 1144 (10th Cir. 2004), the plaintiff challenged notice of the state court action as well as requested a declaratory judgment that he rescinded the subject mortgage under the Truth in Lending Act (TILA). Because the state court had previously ruled that service was appropriate, the Crutchfield court was prevented from hearing an appeal on an issue which the state court had actually decided. Additionally, the Crutchfield court found the TILA claims were so “inextricably intertwined” with the state court judgment that granting the plaintiff its requested relief would “do precisely what Rooker-Feldman prohibits: to undo the effect of the state court judgment.”

When in doubt (and as suggested by the Crutchfield court), look to the actual relief sought by the plaintiff. If it is unclear whether the alleged federal violation will be viewed as an independent claim, assess whether the requested relief seeks to overturn — or even review — the state court decision. If it does, the Rooker-Feldman doctrine likely applies to bar jurisdiction.

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