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Rooker-Feldman Inapplicable If State Court Proceedings (Even Appeal) Still Pending — Does Not in Any Event Bar Claim State Court Proceeding Corrupted

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Anderson v. Anderson, 2014 U.S. App. LEXIS 2777 (7th Cir. Feb. 14, 2014):

Larry Anderson appeals the district court's dismissal of his § 1983 case alleging fraud on the court during his divorce proceedings in Brown County, Wisconsin. The district court dismissed on immunity and abstention grounds. We affirm the dismissal because the domestic-relations exception to federal jurisdiction bars Anderson's claims for equitable relief, and he fails to state a claim for damages relief under § 1983.

According to Anderson's allegations in his complaint, which we must take as true at this stage, during his divorce proceeding his wife, her attorney, her accountant, and his former attorney all colluded to hide assets and evade discovery. After Anderson discovered this fraud he submitted a grievance against the attorneys to the Wisconsin Office of Lawyer Regulation. He also took his allegations to the U.S. Attorney's office, which he asserts began to investigate whether family-law attorneys in Brown County and circuit court officers were involved in racketeering. Finally, he filed a motion for contempt before the judge presiding over his divorce case, Judge Kelley, to alert the judge to the alleged fraud. Anderson asserts that Judge Kelley never ruled on the motion and continued to preside over the divorce case. From the judge's acquiescence, Anderson infers that the judge corruptly participated in the fraud.

The divorce proceedings in circuit court went to final judgment, which Anderson has appealed to the Wisconsin Court of Appeals, raising his allegations of fraud. He has also asked Judge Kelley to reopen the judgment and transfer the case to another judge. Even though his state-court appeal is still pending, Anderson has filed this suit against his wife, her attorney and law firm, the Brown County circuit court, and Judge Kelley. In this suit he seeks a divorce by default, the removal of Judge Kelley from the divorce proceedings, and the nullification of orders from any Wisconsin court concerning his divorce. In other filings, he also seeks damages for the harm that the defendants inflicted on him by defrauding and corrupting the court process.

***

We next assess federal jurisdiction over Anderson's damages claims. He seeks damages under § 1983 for injuries resulting from the defendants' fraud that he alleges permeated the circuit-court proceedings. Because the circuit court reached a final judgment, the defendants invoke the Rooker-Feldman doctrine to bar the damages claim. But the doctrine does not apply here. First, the doctrine divests district courts of jurisdiction only in cases where "the losing party in state court filed suit in federal court after the state proceedings ended . . . ." Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 291 (2005) (emphasis added). Although Anderson sued in federal court after the circuit-court case finished, his appeal remains pending in the Wisconsin Court of Appeals. In federal circuits that have addressed the issue since Exxon Mobil (ours has not in a precedential decision), Rooker-Feldman does not apply if a state-court appeal is pending. See Nicholson v. Shafe, 558 F.3d 1266, 1279 (11th Cir. 2009); Guttman v. Khalsa, 466 F.3d 1027, 1032 n.2 (10th Cir. 2006); Dornheim v. Sholes, 430 F.3d 919, 923-24 (8th Cir. 2005); Federación de Maestros de Puerto Rico v. Junta de Relaciones Del Travajo de Puerto Rico, 410 F.3d 17, 25 (1st Cir. 2005); Mothershed v. Justices of the Supreme Court, 410 F.3d 602, 604 n.1 (9th Cir. 2005). Second, Rooker-Feldman does not bar claims alleging that the defendants "so far succeeded in corrupting the state judicial process as to obtain a favorable judgment." Loubser v. Thacker, 440 F.3d 439, 441-42 (7th Cir. 2006) (citing Nesses v. Shepard, 68 F.3d 1003, 1005 (7th Cir. 1995)). Based on his allegations that fraud and corruption produced the circuit court's judgment, Anderson invokes this exception.

But overcoming Rooker-Feldman does not mean that Anderson wins on the merits.***

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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