Rooker Feldman Explained — Finally

The RF doctrine is generally thought to mean that anything that was litigated in state court cannot be brought up in Federal court and that the reverse is also true. One of my anonymous contributors has detected a case that makes the whole RF doctrine thing and res judicata doctrines COMPARED and found to be different.

Here is what he sent me from the decision

from the case:

What   Johnson   adds—what   the   defendants   in   this   suit   have   failed   to   appreciate—is   that   federal   courts   retain   juris-­‐‑ diction   to   award   damages   for   fraud   that   imposes   extra-­‐‑ judicial   injury.   The   Supreme   Court   drew   that   very   line   in   Exxon  Mobil:

Nor  does  [the  doctrine]  stop  a  district  court  from  exercising  sub-­‐‑ ject-­‐‑matter   jurisdiction   simply   because   a   party   attempts   to   liti-­‐‑ gate   in   federal   court   a   matter   previously   litigated   in   state   court.   If   a   federal   plaintiff   “present[s]   some   independent   claim,   albeit   one   that   denies   a   legal   conclusion   that   a   state   court   has   reached   in   a   case   to   which   he   was   a   party   …   ,   then   there   is   jurisdiction   and   state   law   determines   whether   the   defendant   prevails   under   principles   of   preclusion.”   GASH   Assocs.   v.   Rosemont,   995   F.   2d   726,  728  (7th  Cir.  1993);  accord  Noel  v.  Hall,  341  F.  3d  1148,  1163– 1164  (9th  Cir.  2003).

544   U.S.   at   293.   In   other   words,   if   a   plaintiff   contends   that   out-­‐‑of-­‐‑court   events   have   caused   injury   that   the   state   judici-­‐‑ ary  failed  to  detect  and  repair,  then  a  district  court  has  juris-­‐‑ diction—but   only   to   the   extent   of   dealing   with   that   injury.   As  we  wrote  in  Johnson,  the  federal  court  cannot  set  aside  the   state  court’s  judgment.

Iqbal   alleges   that   the   defendants   conducted   a   racketeer-­‐‑ ing   enterprise   that   predates   the   state   court’s   judgments.   He   cannot   have   those   judgments   annulled   but   can   contend   that   he   was   injured,   out   of   court,   by   being   “set   up”   by   Patel   and   Johnson   so   that   they   could   take   over   his   business   and   reap   the   profits   he   anticipated.   The   district   court   believed   that   any  pre-­‐‑litigation  fraud  is  “intertwined”  with  the  state  court   judgments   and   therefore   forecloses   federal   litigation,   but   Exxon   Mobil   shows   that   the   Rooker-­‐‑Feldman   doctrine   asks No.  14-­‐‑1959   5  

what  injury  the  plaintiff  asks  the  federal  court  to  redress,  not   whether  the  injury  is  “intertwined”  with  something  else.  See   544  U.S.  at  291;  see  also  Richardson  v.  Koch  Law  Firm,  P.C.,  768   F.3d   732,   734   (7th   Cir.   2014)   (deprecating   any   inquiry   into   what  is  intertwined  with  what).  

Because  Iqbal  seeks  damages  for  activity  that  (he  alleges)   predates  the  state  litigation  and  caused  injury  independently   of   it,   the   Rooker-­‐‑Feldman   doctrine   does   not   block   this   suit.   It   must  be  reinstated.  

Logically   the   district   court’s   next   inquiry   is   whether   the   doctrine   of   claim   preclusion   (res   judicata)   applies.   (Exxon   Mobil  observes,  544  U.S.  293,  that  preclusion  differs  from  the   Rooker-­‐‑Feldman   doctrine   and   comes   to   the   fore   once   the   fed-­‐‑ eral   court   concludes   that   it   has   subject-­‐‑matter   jurisdiction.)   At   least   two   decisions   by   intermediate   appellate   courts   in   Indiana   hold   that   fraud   causing   nonpayment   is   a   compulso-­‐‑ ry   counterclaim   in   a   debt-­‐‑collection   suit.   Ratcliff   v.   Citizens   Bank,   768   N.E.2d   964,   967–69   (Ind.   App.   2002);   Broadhurst   v.   Moenning,  633  N.E.2d  326,  331–32  (Ind.  App.  1994).  Cf.  Fox  v.   Maulding,   112   F.3d   453   (10th   Cir.   1997)   (similar   conclusion   under  Oklahoma  law).  State  law  determines  the  rules  of  pre-­‐‑ clusion,  see  28  U.S.C.  §1738,  so  the  district  court  will  need  to   decide   whether   the   Supreme   Court   of   Indiana   is   likely   to   agree  with  these  decisions,  and  if  so  whether  there  is  any  ex-­‐‑ ception  to  the  rules  of  preclusion.  The  court  also  will  need  to   consider   whether   Patel   and   Johnson   receive   the   benefits   of   any   compulsory-­‐‑counterclaim   requirement,   given   that   S-­‐‑ Mart  Petroleum  was  the  sole  plaintiff  in  the  state  actions.

The   judgment   is   reversed,   and   the   case   is   remanded   for   further  proceedings  consistent  with  this  opinion.

4 Responses

  1. Our Judge insisted we consolidate our Superior Court cases into Housing Court so he could oversee. It turns out he had a CONFLICT of INTEREST and ignored the Rules of Law and his Oath. This is just a glimpse of the illegal actions that took place

  2. Fraud causing a non payment is a compulsory counterclaim in a debt collection suit.

    State Laws determine the rules of preclusion.

    Many Blessings to All

  3. WOW! A Group of Slow Learners.
    No Problem here …. Carry On!

    Live Love Laugh & Learn!

  4. Opp. counsel in forecosure lawsuits frequently bring of Res Judicata and Rooker-Feldman defenses. This is interesting and should be saved in your “to be used later” file.

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