Knight v. Mooring Capital Fund, LLC
2014 U.S. App. LEXIS 7508
10th Cir.2014Background
- Judy Knight appeals a district court’s dismissal of her suit on timeliness, failure to state a claim, and res judicata grounds.
- The dispute stems from Mooring Capital/Mooring Financial litigation (Mooring I) in 2010 and a later 2012 Oklahoma state-court action removed to federal court.
- Knight added Counsel Defendants (law firm and lawyers) as defendants in the removed action; removal relied on diversity and federal-question grounds due to alleged RICO claims.
- Service of the Counsel Defendants by Knight was not clearly shown to be proper before removal, so their consent to removal was not required.
- District court dismissed Phase 1 (pre-Mooring I) claims as untimely and Phase 2 (during Mooring I) claims—primarily Oklahoma-law claims—due to immunity and lack of standing, with RICO Phase 2 claims barred by issue preclusion
- Knight could not use RICO to collateral attack Mooring I’s judgment; issue preclusion applied to increased costs and to lost individual claims, preventing relitigation of those issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was removal proper and jurisdiction proper? | Knight contends removal was improper due to service issues and lack of consent by Counsel Defendants. | Defendants argue removal valid; some reliance on diversity, and RICO claims support federal jurisdiction. | Removal proper; jurisdiction valid because RICO claims support federal question. |
| Did Counsel Defendants' consent to removal require showing service? | Consent required only for properly joined and served defendants, which Knight argues Counsel Defendants were not. | Counsel Defendants were not proven properly served before removal; consent not required. | No improper removal; Counsel Defendants not properly served before removal, so their consent not required. |
| Are Phase 1 pre-Mooring I claims timely and properly dismissed? | Phase 1 claims should proceed; limitations may not bar them in full. | Phase 1 claims are untimely given Mooring I began in 2005 and suit filed 2012. | Phase 1 claims untimely; properly dismissed. |
| Are Phase 2 Oklahoma-law claims barred by immunity and irresponsive standing under Oklahoma law? | Knight seeks damages from litigation conduct under Oklahoma-law theories. | Oklahoma provides absolute immunity for litigation-related conduct; no civil remedy under Oklahoma RICO; lack of standing. | Phase 2 Oklahoma-law claims fail due to absolute immunity and lack of standing. |
| Do Phase 2 federal RICO claims survive given issue preclusion from Mooring I? | RICO claims should be allowed to proceed despite prior judgment, to recover damages from litigation conduct. | Issue preclusion bars these RICO claims because the damages and injuries were resolved in Mooring I. | Phase 2 RICO claims barred by issue preclusion; damages and injuries are precluded. |
Key Cases Cited
- Australian Gold, Inc. v. Hatfield, 436 F.3d 1228 (10th Cir. 2006) (de novo review of removal and jurisdiction standards)
- Caterpillar Inc. v. Williams, 482 U.S. 386 (1987) (federal-question jurisdiction governs removal)
- Briscoe v. LaHue, 460 U.S. 325 (1983) (immunity of parties and witnesses in litigation)
- Cities Serv. Co. v. Gulf Oil Corp., 980 P.2d 116 (Okla. 1999) (factors for evaluating issue preclusion in Oklahoma)
- Robinson v. Volkswagenwerk AG, 56 F.3d 1268 (10th Cir. 1995) (collateral estoppel applies to related parties and issues)
- Deck v. Engineered Laminates, 349 F.3d 1253 (10th Cir. 2003) (standing requirement for damages under RICO; injury to business or property)