Commercial Litigation and Arbitration

Rooker-Feldman Does Not Bar Federal Subject Matter Jurisdiction Until the Last Nail Is in the Coffin of the Last State Court Proceeding

The chronology in Nicholson v. Career Assessment Atlanta, Inc., 2009 U.S. App. LEXIS 2941 (11th Cir. Feb. 18, 2009), was as follows:

• October 5, 2007 — state court jury verdict on claim for accounting under state law for copyright profits

• November 1, 2007 — federal declaratory judgment action for accounting for same profits commenced

• November 1, 2007 — state court appeal filed

• November 10, 2008 — state court judgment affirmed

Issue: Was the federal action precluded under Rooker-Feldman by entry of the state court jury verdict?

Generally speaking, the Rooker-Feldman doctrine bars federal district courts from reviewing state court decisions. The Supreme Court stated in Exxon Mobil [Exxon Mobil Corporation v. Saudi Basic Industries Corporation, 544 U.S. 280 (2005)] that the Rooker-Feldman doctrine "has sometimes been construed to extend far beyond the contours of the Rooker and Feldman cases" and it should be "confined to cases of the kind from which the doctrine acquired its name." Exxon Mobil, 544 U.S. at 283, 284. ***

Exxon Mobil clarified that the federal action must be filed after the state proceedings have ended, which, in turn, begs the question: when have state proceedings ended? In particular, we must address whether the entry of judgment on a jury verdict in a state trial court pending appeal marks the end of state proceedings for purposes of the Rooker-Feldman doctrine. Save its reference to the facts of the Rooker and Feldman cases as guidance, Exxon Mobil provides little direction concerning when state proceedings end. Post-Exxon Mobil, we have not yet addressed when a state proceeding ends for purposes of Rooker-Feldman. But, two of our sister circuits provide useful guidance.

First, in Federacion, the First Circuit addressed whether the Rooker-Feldman doctrine applies to an interlocutory jurisdictional decision of the Puerto Rico appellate courts. The First Circuit noted that, under Exxon Mobil, a state court is "sufficiently final" when "state proceedings [have] ended." Federacion, 410 F.3d at 24 (citing Exxon Mobil, 544 U.S. at 291). As such, Rooker-Feldman will not bar subject matter jurisdiction where a plaintiff initiates the federal lawsuit before the state court proceedings have ended. "Generally speaking," the First Circuit found that state proceedings have "ended" in three situations: (1) "when the highest state court in which review is available has affirmed the judgment below and nothing is left to be resolved," (2) "if the state action has reached a point where neither party seeks further action," and (3) "if the state court proceedings have finally resolved all the federal questions in the litigation, but state law or purely factual questions (whether great or small) remain to be litigated." ... While neither the first nor the third situations apply here, the second situation implies that a state proceeding has not ended when a state court loser seeks "further action," such as an appeal. The First Circuit elaborated on the second scenario, opining that "if a lower state court issues a judgment and the losing party allows the time for appeal to expire, then the state proceedings have ended." … Conversely, logic dictates that if a state court issues a judgment and the losing party (here, the Appellants) does not allow the time for appeal to expire (but instead, files an appeal), then the state proceedings have not ended. See id. at 27 n.13 ("While the state court judgment is pending on appeal, it carries preclusive effect, but (in most cases) the state proceedings have not yet 'ended.'").

Second, in Dornheim, the Eighth Circuit applied Exxon Mobil and Federacion to facts chronologically indistinguishable from the instant case. In Dornheim, a mother filed a federal civil rights lawsuit against various state actors involved in her state court custody dispute with her ex-husband and juvenile deprivation proceeding. The state court issued judgments on August 13, 2003 (divorce) and August 26, 2003 (juvenile deprivation). The mother appealed both state court rulings to the Supreme Court of North Dakota, which affirmed the lower court judgment in each appeal on June 30, 2004. The mother, however, had commenced her civil rights action in federal court nearly a year before the state Supreme Court ruled, specifically on August 13, 2003. Therefore, according to the Eighth Circuit, "[a]t the time that [the plaintiffs] commenced this federal action, the state court adjudication was not complete" insofar as the appeal remained pending before the Supreme Court of North Dakota. Dornheim, 430 F.3d at 924.

Applied here, the chronology of significant dates is as follows: the jury in the state court action returned its verdict on October 5, 2007; the Appellants filed the instant federal action and the Appellants appealed the jury verdict in the state court action on November 1, 2007; and the Georgia appellate court affirmed the state trial court's rulings on November 10, 2008, nearly one year after the commencement of the federal proceedings. As such, because an appeal remained pending in the state court action at the time the Appellants filed the instant case, the state court proceedings had not ended for purposes of Rooker-Feldman as clarified by Exxon Mobil.

***

After Exxon Mobil, … the relevant inquiry is not whether the Rooker-Feldman doctrine applies to state trial court judgments but whether the entry of judgment in a state trial court marks the end of state proceedings for purposes of Rooker-Feldman.

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