Seventh Circuit Applies What Is Left of the Rooker-Feldman Doctrine

23 December 2014 Wisconsin Appellate Law Blog

Not much is left of the holdings of Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983), and of the eponymous Rooker-Feldman doctrine, but what remains was the subject of the Seventh Circuit’s recent decision in Harold v. Steel, No. 14-1875 (7th Cir. Dec. 11, 2014), written by Judge Easterbrook.

The Rooker-Feldman doctrine stands for the principle that the only federal court that can review judgments entered by a state court in civil litigation is the Supreme Court of the United States. Lower federal courts lack subject-matter jurisdiction “when the state court’s judgment is the source of the injury of which plaintiffs complain in federal court.” Slip op. 3. 

Harold began with a small-claims judgment in Marion County, Indiana. Harold had agreed to the judgment’s entry nearly two decades ago, but failed to pay, which caused the judgment’s (alleged) creditor, Steel, to secure a garnishment order from the Indiana court. Harold challenged that order, contending that “Steel had misrepresented the judgment creditor’s identity . . . and did not represent the only entity authorized to enforce the judgment.” Id. at 2. He lost in the Indiana court, but then filed his federal suit under 15 U.S.C. § 1692e of the Fair Debt Collection Practices Act, alleging that Steel had made false statements. The district court dismissed his federal suit under Rooker-Feldman.

Harold faced an uphill battle from the outset. The Seventh Circuit already had held, in Epps v. Creditnet, Inc., 320 F.3d 756 (7th Cir. 2003), that the “doctrine bars federal suits seeking to recover on a theory that a debt collector made false statements during state litigation.” Slip op. 2.

Harold persevered, nevertheless, arguing that Rooker-Feldman did not apply to interlocutory decisions in state courts, that his claim was independent of the state court’s decision, and that the doctrine did not apply to the procedures that state courts use or the evidence that state judges consider. The court noted that the circuits are split on the first issue, though it’s hard to see why an interlocutory decision should be “subject to review in any court,” let alone a separate tribunal. Slip op. 3. But the issue was academic here; Indiana treats garnishments as final and appealable orders. As to the independent nature of his claim, Harold was trying to benefit from the Court’s decision in Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280 (2005), which held that the doctrine applies “only when the state court has caused the injury of which the federal suit complains.” Slip op. 4. Harold’s argument that Steel did not own the judgment would have required litigation one way or the other, so he was not injured independently by the costs of litigating about his judgment, as plaintiffs who benefit from Exxon Mobil typically are. In other words, the only injury that Harold suffered occurred when the state judge ruled against him. Harold’s last argument, concerning a “procedural exception” to the doctrine, was “embarrassed by the fact that Rooker itself” arose from a similar argument. Id. at 5. Overturning Rooker was not on the court’s agenda.

What’s the lesson from all this? It’s not to forget about the doctrine, despite its narrow scope. It should have been obvious to Harold, but the more natural course for him would have been to file his § 1692e claim as a counterclaim in Indiana and to proceed with his appeals there. “He did neither,” as the court noted, and “[h]is federal suit was properly dismissed.” Id. at 6.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services