855 F.3d 836
8th Cir.2017Background
- John Smiley received emergency treatment at Shelby County Health Care Corp. (The Med) in Memphis, TN after an automobile accident and died; The Med filed a Tennessee hospital lien for its medical bills.
- Barbara Ford was appointed administrator of Smiley’s estate in Arkansas; she settled with the tortfeasor’s insurer for $700,000 and allocated the entire recovery to wrongful death, not medical expenses.
- An Arkansas probate court entered a judgment memorializing the settlement and stating it extinguished outstanding liens; The Med learned of the probate judgment but did not intervene or file in Arkansas.
- The Med sued the settling parties in federal court seeking $355,364.16 for impairment of its hospital lien. The district court granted summary judgment for defendants, first invoking Rooker–Feldman and alternatively applying Arkansas law to deny relief.
- On appeal, the Eighth Circuit held Rooker–Feldman did not bar the suit and, applying Arkansas choice-of-law rules, concluded Tennessee law governs the lien-impairment tort claim; the case was remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rooker–Feldman bars The Med’s federal suit | The Med: not a party to Arkansas probate; seeks relief for lien impairment against settling parties, not to directly overturn probate order | Defendants: probate judgment extinguished liens; The Med is effectively asking federal court to undo state-court decision | Court: Rooker–Feldman does not apply — The Med was not a "state-court loser" or party; claim is not a forbidden de facto appeal |
| Characterization of claim for choice-of-law (contract vs tort) | The Med: liens arise from contract implied by treatment; thus contract analysis should apply | Defendants/Ford: claim implicates tort aspects of the injury and lien dispute, similar to subrogation disputes | Court: claim best characterized as tort (lien-impairment analogous to interference/conversion) |
| Choice of law: whether Arkansas or Tennessee governs lien-impairment claim | The Med: Tennessee law should apply because lien arose in TN, lien filed in TN, hospital is TN-based, and predictability favors TN law | Ford/defs: Arkansas law should apply because settlement and probate order were in Arkansas and the estate administration occurred there | Court: Applying Arkansas choice rules (most significant relationship + Leflar factors), Tennessee law governs the lien-impairment claim |
| Merits under Arkansas substantive law (wrongful-death proceeds subject to liens) — alternative basis for summary judgment | The Med: Tennessee lien law would protect the hospital’s interest; impairment actionable | Ford/defs: Arkansas law bars liens from attaching to wrongful-death recoveries and administrator properly allocated settlement to wrongful death | Court: Did not resolve merits on remand; found choice-of-law outcome controls (Tennessee law applies) and therefore vacated summary judgment and remanded for further proceedings |
Key Cases Cited
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (clarifies narrow scope of Rooker–Feldman)
- D.C. Court of Appeals v. Feldman, 460 U.S. 462 (establishes doctrine now called Rooker–Feldman)
- Rooker v. Fidelity Trust Co., 263 U.S. 413 (origin of Rooker principle)
- Lance v. Dennis, 546 U.S. 459 (Rooker–Feldman does not bar suits by nonparties simply due to preclusion/privity)
- Lemonds v. St. Louis County, 222 F.3d 488 (8th Cir.) (pre-Exxon case on expanded Rooker–Feldman approach)
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (federal courts apply forum state choice-of-law rules in diversity cases)
- Stuttgart Reg’l Med. Ctr. v. Cox, 343 Ark. 209 (Ark. S. Ct.: hospital lien cause characterized as lien enforcement, not contract)
- Lane v. Celadon Trucking, Inc., 543 F.3d 1005 (8th Cir.: tort characterization in subrogation/lien disputes)
- Schubert v. Target Stores, Inc., 360 Ark. 404 (Ark. S. Ct.: Arkansas moved toward Leflar factors for tort choice-of-law)
- Ganey v. Kawasaki Motors Corp., U.S.A., 366 Ark. 238 (Ark. S. Ct.: framework for most-significant-relationship and Leflar factors)
- Mid-South Adjustment Co. v. Estate of Harris, 87 Ark. App. 139 (Ark. Ct. App.: probate administrator may allocate settlement to wrongful death; relevant to Arkansas policy on liens and probate)