Wednesday, June 30, 2010

consumer - FDCPA - Rooker-Feldman doctrine - prior state court judgment

Rivera v. Ragan and Ragan - ED Pa. - June 25, 2010

Defendant, a debt collection law firm, got a state court judgment for its client against federal plaintiff. Plaintiff-consumer then sued the law firm in federal court, based on alleged improper collection efforts. Defendant moved to dismiss the federal case, alleging lack of jurisdiction based on Rooker-Feldman doctrine.

The Rooker-Feldman doctrine derives its name from two Supreme Court decisions, Rooker v. Fidelity Trust Comany, 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983). “The Rooker-Feldman Doctrine bars federal jurisdiction under two circumstances: if the claim was ‘actually litigated’ in state court or if the claim is ‘inextricably intertwined’ with the state court adjudication.” ITT Corp. v. Intelnet Int’l Corp., 366 F.3d 205, 210 (3d Cir. 2004). In determining whether an issue was “actually litigated” by the state court, “a plaintiff must present its federal claims to the state court, and the state court must decide those claims.” Id. at 210 n.8 (citing Desi’s Pizza, Inc. v. City of Wilkes-Barre, 321 F.3d 411, 419 (3d Cir. 2003)). Determining that a claim was “actually litigated” “requires that the state court has considered and decided precisely the same claim that the plaintiff has presented to the federal court.” Id.

The Rooker-Feldman doctrine has been narrowed by the Exxon Mobil decision, which held that it does not prevent a district court from exercising subject matter jurisdiction where a state court judgment exists, and a plaintiff brings an independent claim(s) from the state court action in federal court.

In Exxon Mobil Corporation v. Saudi Basic Industries Corporation, 544 U.S. 280 (2005), the Court observed that the Rooker-Feldman doctrine had “sometimes been construed to extend far beyond the contours of the Rooker and Feldman cases.” 544 U.S. at 283. The Court clarified that the scope of the doctrine is “confined” 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.” Id. at 284; accord Lance v. Dennis, 546 U.S. 459 (2006) (observing that the Court in Exxon Mobil explained that Rooker-Feldman is a “narrow doctrine”). The Court added: “[i]f 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.’” Exxon Mobil,544 U.S. at 293.

Here, Rivera does not challenge the judgment against him in state court, but rather, only claims that Ragan’s collection practices violated sections of the FDCPA. Thus, Rivera’s claims in the instant Complaint are independent of the state judgment that was rendered against him, and the Rooker-Feldman doctrine does not preclude subject matter jurisdiction. In support of this conclusion we have found at least seven post-Exxon Mobile cases that have considered the applicability of the Rooker-Feldman doctrine to circumstances similar to those in this case, ie., where creditors or debt collectors obtain a judgment in state court but have their collection practices challenged in federal court under the FDCPA.