151 F.4th 144
3d Cir.2025Background:
- Adams and her husband owned a New Jersey home subject to a mortgage originally tied to AmTrust (MERS as nominee); assignments and transfers (including AmTrust’s FDIC receivership and NYCB acquisition) produced a disputed chain of title.
- EverBank filed foreclosure in 2014; Adams defaulted, did not oppose summary judgment, and the state trial court entered final judgment in EverBank’s favor (2015–2017); EverBank later assigned the mortgage to Nationstar and Nationstar participated as servicer.
- Adams pursued multiple bankruptcies (Chapter 7 in 2017; Chapter 13 attempts later) and litigated in state court; the Appellate Division affirmed denial of reconsideration and the New Jersey Supreme Court denied review (state judgment final on the merits).
- In Adams’s 2022 Chapter 13, Nationstar moved for relief from the automatic stay to proceed with foreclosure; the Bankruptcy Court granted the motion and the District Court affirmed and dismissed the appeal invoking Rooker-Feldman.
- The Third Circuit held it had jurisdiction, concluded Adams’s challenges to the state foreclosure judgment are precluded under New Jersey preclusion law, and affirmed the lift of the automatic stay; Adams and her husband later bought the house at the sheriff’s sale.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rooker‑Feldman bars federal jurisdiction over Adams’s challenge to the state foreclosure judgment | Adams sought federal relief attacking the state judgment as wrong and argued federal court could hear her claims | Nationstar argued Rooker‑Feldman bars federal review of state‑court judgments | Court: Rooker‑Feldman is narrow and did not deprive federal courts of jurisdiction here; Adams was not a Rooker‑Feldman plaintiff in the relevant sense |
| Whether bankruptcy courts may adjudicate claims that deny legal conclusions of state courts (bankruptcy‑specific Rooker‑Feldman test) | Adams framed her opposition to stay as an attack on the foreclosure judgment | Nationstar: bankruptcy court jurisdiction is proper but the claims are precluded or otherwise not independent | Court: Rooker‑Feldman can apply in bankruptcy but only when the federal claim is not independent; here the claim was not independent of the state judgment |
| Whether New Jersey claim/issue preclusion bars Adams from relitigating assignment and standing issues | Adams reasserted that EverBank/Nationstar lacked the mortgage and therefore lacked standing to foreclose | Nationstar: the state foreclosure judgment was final, on the merits, and preclusive under NJ law (parties/privity satisfied) | Court: Under 28 U.S.C. § 1738 and New Jersey law, Adams’s claims are precluded (final judgment, privity, same transaction) |
| Whether the District Court properly dismissed the appeal for lack of jurisdiction | Adams argued the District Court erred in dismissing on Rooker‑Feldman grounds | Nationstar supported dismissal or, alternatively, preclusion to deny relief | Court: The Third Circuit had jurisdiction; it affirmed the lift of stay but on preclusion grounds rather than Rooker‑Feldman |
Key Cases Cited
- Rooker v. Fidelity Trust Co., 263 U.S. 413 (establishes that lower federal courts may not exercise appellate review over state‑court judgments)
- District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (distinguishes direct appeals of state judicial decisions from collateral constitutional attacks)
- Exxon Mobil Corp. v. Saudi Basic Indus., 544 U.S. 280 (narrows Rooker‑Feldman; directs reliance on preclusion and ordinary jurisdictional rules)
- Taylor v. Sturgell, 553 U.S. 880 (explains claim and issue preclusion principles)
- Ritzen Grp., Inc. v. Jackson Masonry, LLC, 589 U.S. 35 (describes bankruptcy as an aggregation of controversies; context for bankruptcy jurisdiction)
- In re Philadelphia Entertainment & Development Partners, 879 F.3d 492 (3d Cir. 2018) (avoider’s bankruptcy claim held "independent" of state revocation; Rooker‑Feldman inapplicable)
- In re Knapper, 407 F.3d 573 (3d Cir. 2005) (discusses interplay of bankruptcy adjudication and state judgments)
- Laurel Gardens, LLC v. McKenna, 948 F.3d 105 (3d Cir. 2020) (appellate principle that a court may affirm on any ground supported by the record)