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Tuesday, November 25, 2008

Ind. Decisions - One Indiana decision today from the 7th Circuit

In Kelly, et al v. Med-I Solutions (SD Ind., Judge Barker), a 15-page opinion, Judge Flaum writes:

Med-1 Solutions, LLC (“Med-1”) is a debt-collector that filed lawsuits in Indiana state small claims court to collect hospital charges owed by debtors to its client, St. Vincent Carmel Hospital, Inc. (“St. Vincent”). Med-1 filed these suits in its own name. Med-1 demanded and received attorney fees in these proceed- ings. Debtors then sued in federal district court, contend- ing that Med-1, its owner, and its in-house lawyers violated the Fair Debt Collection Practices Act (“FDCPA”) when they demanded attorney fees in the small claims pro- ceedings. The district court dismissed the case for lack of subject matter jurisdiction based on the Rooker-Feldman doctrine. For the reasons discussed below, we affirm. * * *

The Rooker-Feldman doctrine derives its name from two Supreme Court decisions, Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983). It “precludes lower federal court jurisdiction over claims seeking review of state court judgments . . . no matter how erroneous or unconstitutional the state court judgment may be.” Brokaw v. Weaver, 305 F.3d 660, 664 (7th Cir. 2002) (citing Remer v. Burlington Area Sch. Dist., 205 F.3d 990, 996 (7th Cir. 2000)). The 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. See Feldman, 460 U.S. at 482 n.16. 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. See GASH Assocs. v. Village of Rosemont, Ill., 995 F.2d 726, 727 (7th Cir. 1993).

The Supreme Court recently revisited the doctrine in Exxon Mobil Corp. v. Saudi Basic Industries, 544 U.S. 280, 284 (2005). The doctrine previously had been applied expan- sively. See Exxon Mobil, 544 U.S. at 283 (describing how lower courts at times had interpreted the doctrine “to extend far beyond the contours of the Rooker and Feldman cases”). In Exxon Mobil, the Court explicitly limited the doctrine. The Rooker-Feldman doctrine now “is a narrow doctrine, ‘confined 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 rejec- tion of those judgments.’ ” * * *

Even in light of the Supreme Court’s nar- rowing of Rooker-Feldman in Exxon Mobil, we conclude we are still barred from evaluating claims, such as this one, where all of the allegedly improper relief was granted by state courts. * * *

Because of plaintiffs’ opportunities to raise their FDCPA claims in state court upon transfer of their cases to the plenary docket, we conclude that plaintiffs in this case had reasonable op- portunities to raise their claims in state court. * * *

The “reasonable opportunity” exception was developed during a time when federal courts applied Rooker-Feldman much more expan- sively. Post-Exxon Mobil, the “reasonable opportunity” exception to the Rooker-Feldman doctrine is of question- able viability.

Conclusion. We AFFIRM the district court’s holding because the Rooker-Feldman doctrine applies and there is no federal subject matter jurisdiction in this case. Therefore, we need not address defendants’ arguments related to res judicata and collateral estoppel.

Posted by Marcia Oddi on November 25, 2008 11:02 AM
Posted to Ind. (7th Cir.) Decisions