The Fifth Circuit has issued a new decision restricting application of the Rooker-Feldman doctrine and repudiating a prior precedent. Miller v. Dunn, Case No. 20-11054 (5th Cir. 6/2/22), which can be found here. Under the new rule, which brings the Fifth Circuit in line with other courts, Rooker-Feldman does not apply to a state court decision which is the subject of a pending appeal.
Rooker-Feldman is one of several doctrines which enforces comity between state and federal courts. The Rooker-Feldman doctrine, which is based on Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983) means that a federal court may not review and reverse a determination of a state court. Rooker-Feldman applies 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." Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005).
What Happened
Dunn and Miller were parties to a divorce action filed in Dallas County state court in February 2013. Two additional state court cases followed. In 2018, Dunn sued Miller to modify their child custody arrangements. Miller removed the case to federal court, which remanded it. Miller removed the case a second time just an hour before a hearing on an emergency temporary restraining order.
Notwithstanding the removal, the state court went ahead with the hearing and entered an order barring Miller from seeing his children. Miller appealed the order contending that the state court lacked jurisdiction due to the removal.
While the appeal was pending, Miller brought suit in U.S. District Court for violation of his civil rights under 42 U.S.C. Sec. 1983. He sued Dunn, his ex-wife, other private individuals, the state judges, two police officers Dallas County and the City of Dallas. The magistrate judge sua sponte ordered Miller to show cause why the court had subject matter jurisdiction based on Younger abstention and Rooker-Feldman. Miller contended that Rooker-Feldman did not apply because the state court order was still under appeal. The magistrate judge recommended dismissal, which the district judge approved. Miller then appealed to the Fifth Circuit.
The Ruling
In a rare twist, the Fifth Circuit held that the pro se litigant was right and repudiated one of its precedents. In Hale v. Harney, 786 F.2d 688 (5th Cir. 1986), the Court held that Rooker-Feldman could apply even if the state court case was under appeal. However, the Supreme Court later ruled in Exxon Mobil, that Rooker-Feldman should only apply if all appeals had been exhausted in state court. The Supreme Court stated:
When there is parallel state and federal litigation, Rooker-Feldman is not triggered simply by the entry of judgment in state court. This Court has repeatedly held that "the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction."
As understood by the Supreme Court, Rooker-Feldman allows state and federal proceeding to proceed on parallel tracks, but does not allow a federal court to undo a state court ruling which is final and no longer subject to review.
The Fifth Circuit found that its Hale decision was incompatible with the later Supreme Court decision and should be rejected. "We conclude that Hale is no longer good law after Exxon Mobil and hold that Rooker-Feldman is inapplicable where a state appeal is pending when the federal suit is filed." Thus, the court reversed and allowed Miller's suit to continue.
What Does It Mean?
Does this mean that whenever someone loses in state court, they can file an appeal and then file a competing case in federal court? The answer is yes and no. The state court loser can file a competing suit, but will still have to deal with collateral estoppel. Collateral estoppel, which is also known as issue preclusion, says that:
Issue preclusion prevents a party from relitigating an issue only when "(1) the identical issue was previously adjudicated; (2) the issue was actually litigated; and (3) the previous determination was necessary to the decision."
Little River Healthcare Holdings, LLC v. Little River Healthcare Holdings, LLC, 2022 U.S. App. LEXIS 13449 (5th Cir. 5/18/22). When collateral estoppel is invoked based upon a prior state court judgment, that state's law of collateral estoppel applies. Under Texas law, collateral estoppel applies to a judgment that is still being appealed. DeGonzalez v. Guilbot, 315 S.W.3d 533 (Tex. 2010). Thus, while Rooker-Feldman would not apply in this case, collateral estoppel might.
Is this a case of six of one, half dozen of another? Not necessarily. Rooker-Feldman is a jurisdictional bar meaning that the federal court lacks jurisdiction to hear the case. Collateral estoppel is an affirmative defense. Affirmative defenses can be waived. Thus, litigants should avoid falling into the trap of thinking that Rooker-Feldman is the sole answer to the problem.
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