As collection attorneys know, consumers often do not pay close attention to the collection process until the creditor already has a judgment and counsel has an order that allows for garnishing the consumer’s wages or attaching their bank accounts. These post-judgment collection efforts can spawn FDCPA claims in federal court, where the consumers allege they were never served with the state court complaint, or that the state court judgment against them is somehow improper. FDCPA claims of this type, however, are barred by the Rooker-Feldman doctrine and are doomed to fail.
What exactly is the Rooker-Feldman doctrine anyway? As the Supreme Court recently observed, the Rooker-Feldman doctrine 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 Industries Corp., 544 U.S. 280, 284 (2005). Thus, the Rooker-Feldman doctrine prevents litigants from attacking a state court judgment by filing a subsequent federal lawsuit, “no matter how erroneous or unconstitutional the state court judgment may be. (citations). Kelly v. Med-1 Solutions, LLC, 548 F.3d 600, 603 (7th Cir. 2008).
The Rooker-Feldman doctrine “applies not only to claims that were actually raised before the state court, but also to claims that are inextricably intertwined with state court determinations.” Id. (citation omitted). A claim filed by a consumer in federal court is “inextricably intertwined” with a state court decision if “the adjudication of the federal claims would undercut the state ruling or require the district court to interpret the application of state laws or procedural rules . . . .” Bianchi v. Rylaarsdam, 334 F.3d 895, 898 (9th Cir. 2003). Even a claim by a consumer that the state court judgment was obtained through “extrinsic fraud” is barred by the Rooker-Feldman doctrine. See Reusser v. Wachovia Bank, N.A., 515 F.3d 855, 859-60 (9th Cir. 2008).
The Kelly case provides an excellent example of how the Rooker-Feldman doctrine can bar an FDCPA claim. There, the plaintiffs’ FDCPA claims alleged that the state court judgments defendants had obtained included sums for attorneys’ fees that were not permitted by contract or law. See Kelley, 548 F.3d at 602. When defendants raised the Rooker-Feldman doctrine, plaintiffs argued their claims were not barred, because they were only challenging “defendants’ representations and requests related to attorney fees, and not the state court judgments granting those requests.” Id. at 604. The Kelly court rejected this argument, noting that the state court had determined the fees were proper, and the district court lacked jurisdiction to rule that the holding was erroneous:
“Because defendants needed to prevail in state court in order to capitalize on the alleged fraud, the FDCPA claims that plaintiffs bring ultimately require us to evaluate the state court judgments. We could not determine that defendants' representations and requests related to attorney fees violated the law without determining that the state court erred by issuing judgments granting the attorney fees.”
Id. at 605.
More recently, in Bryant v. Gordon & Wong Group, P.C., 681 F. Supp. 2d 1205 (E.D. Cal. 2010), appeal docketed, No. 10-15401 (9th Cir. Feb. 22, 2010), the plaintiff sued a collection law firm under the FDCPA, claiming he had never been served with the complaint in the state court collection action, and that “out of the blue” he discovered his checking and savings accounts had been garnished. See Bryant, 681 F. Supp. 2d at 1206. The court rejected the claim, noting that by “disputing the garnishment of his accounts, Plaintiff is inherently challenging the entry of default against him and the writ of execution that authorized the garnishment.” Id. at 1208. Summary judgment was granted for defendant under the Rooker-Feldman doctrine, because plaintiff’s claims were seeking to undermine the judgments entered against him in state court. The court held:
“The net effect is that Plaintiff is seeking to undermine the state court judgments. These judgments were rendered before the current district court proceeding, and any action by this Court in favor of Plaintiff on his FDCPA or RFDCPA claims would necessarily require review of those state court judgments. The Rooker-Feldman doctrine specifically bars this Court from doing so. If Plaintiff believes he has been wronged by the actions of the state court, he must turn to the state for remedy. This Court lacks jurisdiction to provide redress for Plaintiff's claims.”
The Rooker-Feldman doctrine is a key defense in cases like Kelly and Bryant, where a consumer is pursuing FDCPA claims that would undermine the validity of a state court judgment or its findings. The collector should move for summary judgment on the grounds that the district court lacks subject matter jurisdiction over the claims. See Bianchi, 334 F.3d at 898 (district court lacks subject matter jurisdiction if claims raised in federal action are inextricably intertwined with state court decision).
If a consumer has a problem with a state court judgment, he cannot attack the judgment or undermine it using the FDCPA and the federal courts. He must seek relief from the judgment utilizing the procedures available under state law. “A state litigant seeking review of a state court judgment must follow the appellate process through the state court system and then directly to the United States Supreme Court.” Kelley, 548 F.3d at 603.