114 F.4th 1054
9th Cir.2024Background
- Jeffrey A. Cogan, an attorney, represented clients in federal bankruptcy proceedings and a related Arizona state court malpractice suit against Dr. Arnaldo Trabucco.
- Cogan filed an adversary complaint in bankruptcy court on behalf of the Scharfs (Scharf family), which was later dismissed by stipulation, limiting future litigation to negligence claims (not intentional/malicious conduct).
- Trabucco thereafter sued Cogan and the Scharfs in Arizona state court for malicious prosecution based solely on Cogan’s conduct in the federal bankruptcy case.
- Judgment was entered against Cogan for $8 million on Trabucco’s malicious prosecution claim, later subject to a settlement where Trabucco covenanted not to execute on the judgment if Cogan lost a federal collateral challenge.
- Cogan then filed a Nevada federal suit seeking a declaration that the Arizona judgment was void due to lack of subject matter jurisdiction, arguing federal courts had exclusive jurisdiction over the conduct at issue. The district court dismissed on Rooker-Feldman grounds; Cogan appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the federal declaratory relief action is barred by the Rooker-Feldman doctrine | Cogan: Rooker-Feldman does not apply because the state malicious prosecution action arose solely from conduct within exclusive federal bankruptcy jurisdiction | Trabucco: Cogan's action is an impermissible collateral attack on a state court judgment, barred by Rooker-Feldman | The Ninth Circuit held Rooker-Feldman did not bar the suit because the underlying malicious prosecution claim was completely preempted by federal law |
| Effect of the parties' settlement agreement on mootness | Cogan: The federal court can still provide effectual relief (a declaration voiding the state judgment) even with the non-execution agreement | Trabucco: Case is moot because covenant not to execute provides all relief Cogan could obtain | Court held the case is not moot, as voiding the judgment would afford additional relief beyond non-execution |
| Whether a state court can assert subject matter jurisdiction over malicious prosecution claims based on bankruptcy court conduct | Cogan: State court lacked subject matter jurisdiction; federal courts have exclusive jurisdiction | Trabucco: State courts have concurrent jurisdiction or at least power to determine their own jurisdiction | Court agreed with Cogan; such claims are completely preempted by federal law, within exclusive federal jurisdiction |
| Whether preclusion doctrines bar Cogan’s federal collateral attack after Arizona Supreme Court denied his motion to dismiss for lack of jurisdiction | Cogan: Denial of his motion to dismiss in state court for lack of jurisdiction is not preclusive; exclusive federal jurisdiction trumps | Trabucco: The Arizona Supreme Court’s denial of the jurisdictional challenge is entitled to preclusive effect | Court held that collateral attack is permitted here due to overriding federal exclusivity |
Key Cases Cited
- Rooker v. Fidelity Trust Co., 263 U.S. 413 (establishes that federal district courts cannot act as appellate courts over state court judgments)
- District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (clarifies distinction between direct review of state court judgments and general statutory challenges)
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (clarifies scope and application of Rooker-Feldman doctrine)
- MSR Exploration, Ltd. v. Meridian Oil, Inc., 74 F.3d 910 (Ninth Circuit holds malicious prosecution actions for conduct in bankruptcy proceedings are completely preempted by federal law)