RLR INVESTMENTS, LLC, Plaintiff-Appellant, v. CITY OF PIGEON FORGE, TENNESSEE, Defendant-Appellee.
No. 20-6375
United States Court of Appeals for the Sixth Circuit
Decided and Filed: July 13, 2021
21a0158p.06
Before: CLAY, McKEAGUE, and LARSEN, Circuit Judges.
RECOMMENDED FOR PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b). Appeal from the United States District Court for the Eastern District of Tennessee at Knoxville. No. 3:19-cv-00279—Curtis L. Collier, District Judge.
COUNSEL
ON BRIEF: Gregory C. Logue, WOOLF MCCLANE BRIGHT ALLEN & CARPENTER PLLC, Knoxville, Tennessee, Anthony C. White, THOMPSON HINE LLP, Columbus, Ohio, Thomas M. Ritzert, THOMPSON HINE LLP, Cleveland, Ohio, for Appellant. Brian R. Bibb, WATSON, ROACH, BATSON & LAUDERBACK, P.L.C., Knoxville, Tennessee, Nathan D. Rowell, OGLE, ROWELL & PENLAND, P.C., Sevierville, Tennessee, for Appellee.
McKEAGUE, J., delivered the opinion of the court in which LARSEN, J., joined. CLAY, J. (pp. 20–33), delivered a separate dissenting opinion.
McKEAGUE, Circuit Judge. The City of Pigeon Forge, Tennessee, (City) decided to construct a riverside pedestrian walkway that ran across RLR Investments, LLC’s (RLR’s) land. The City went to Tennessee state court with a petition for condemnation. The court determined that the project had a legitimate public use under Tennessee and federal law and issued an order of possession. Unhappy with that result, RLR filed a complaint in federal court alleging that the Order was unconstitutional and inconsistent with Tennessee law, asking the federal court to enjoin the Order’s enforcement. The district court held that it lacked subject-matter jurisdiction under the Rooker-Feldman doctrine, and RLR appeals that determination, arguing that the Supreme Court’s decision in Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005), abrogated our precedent applying Rooker-Feldman to interlocutory orders. Because
I
RLR owns two adjacent tracts of land on the Little Pigeon River in Pigeon Forge. When these events began, the first tract (Tract 1) had a private resort and parking spaces, while the second tract (Tract 2) had a duplex building.
The City decided to build a pedestrian walkway along the Little Pigeon River. The planned walkway went through both tracts, so the City filed a petition for condemnation (Petition) in Sevier County Circuit Court. See
RLR opposed the Petition. First, RLR argued that the compensation for the loss of the spaces on Tract 1 was too low. Second, RLR argued that the City’s plan of building parking spaces on Tract 2 to replace those lost by Tract 1 was a private, rather than public, purpose. See Kelo v. City of New London, 545 U.S. 469, 477 (2005) (explaining takings law).
The Circuit Court held a hearing and issued an order of possession (Order) granting the City everything the Petition sought. The court held it was “satisfied that the [C]ity ha[d] carried its burden of proof that the [pedestrian walkway] project [wa]s for [a] public purpose” and that it was a “proper exercise of the eminent domain powers of the [C]ity.” The City took possession of the land and built the walkway, but never built the parking spots on Tract 2.
RLR continued to challenge the Order of Possession in the state trial court. Its challenges culminated in what it styled a motion for “summary judgment,” in which RLR continued to argue that the Petition should be dismissed because it was not for a public purpose. Its theory seemed to be that the private purpose supporting the building of the parking spaces on Tract 2 “tainted” the entire Petition; this was true, RLR believed, even though it agreed that the easements across Tracts 1 and 2 were supported by the public purpose of building the pedestrian walkway. The Circuit Court held a hearing, but it was unpersuaded that the private purpose of the planned parking spaces required the entire Order of Possession to fall. The court denied the motion and cleared the way for the proceeding to progress to the valuation of the land.
Before the valuation proceedings happened, RLR filed the instant two-count complaint in federal court. The first count alleges an unlawful taking under the
enjoining the City from [(a)] taking any action to interfere with RLR’s right to peaceful possession and use of its property; [(b)] enjoining the City from exercising any ownership rights in RLR’s property pursuant to the Order of Possession and from enforcing the Order of Possession; and [(c)] requiring the City to refile a new petition for condemnation limiting any taking of RLR’s property to an appropriation for which there is a proper public purpose.
The district court held that it lacked subject-matter jurisdiction under the Rooker-Feldman doctrine. The court first held that the Rooker-Feldman doctrine still applies to interlocutory orders under Sixth Circuit precedent (Pieper v. Am. Arb. Ass’n, Inc., 336 F.3d 458 (6th Cir. 2003)) despite intervening Supreme Court case law (Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005)). Then, the court held that Rooker-Feldman applied here because it was clear that the source of RLR’s injury was the state court’s Order.
II
For the necessary context, we start with the somewhat troubled history of the Rooker-Feldman doctrine. Federal courts’ jurisdiction “is confined within such limits as Congress sees fit to prescribe.” The Francis Wright, 105 U.S. (15 Otto) 381, 385 (1881); accord Keene Corp. v. United States, 508 U.S. 200, 207 (1993). One such limit is hidden in
In the two canonical cases, a litigant received a final judgment from a state’s highest court and then sought review of that judgment from a federal district court rather than the Supreme Court. Rooker, 263 U.S. at 414; Feldman, 460 U.S. at 483. Those are the easy cases, and they outline the basic rule: appeals from state courts of last resort go only to the Supreme Court. For a district court to hear such a case “would be an exercise of appellate jurisdiction[,] [but] [t]he jurisdiction possessed by the District Courts is strictly original.” Rooker, 263 U.S. at 416; see, e.g.,
The lower courts expanded on the basic rule to deal with harder cases. The expansions drew on Feldman’s principle that “lower federal courts possess no power whatever to sit in direct review of state court decisions.” Feldman, 460 U.S. at 482 n.16 (quoting Atl. Coast Line R.R. Co. v. Brotherhood of Locomotive Eng’rs, 398 U.S. 281, 296 (1970)). The generality of the principle lent itself to broad expansion. See McCormick v. Braverman, 451 F.3d 382, 395 (6th Cir. 2006) (noting how courts used Rooker-Feldman as “a panacea to be applied whenever state court decisions and federal court decisions potentially or actually overlap“); Stephen I. Vladeck,
The instant case involves one such difficulty: Does Rooker-Feldman apply to interlocutory orders from lower state courts? We answered affirmatively in Pieper v. American Arbitration Ass’n, Inc. 336 F.3d at 462. There, a state trial court issued an order compelling Pieper to arbitrate. Id. at 460. Rather than appealing that order, Pieper filed a lawsuit in federal court seeking “a declaration that the disputes between Pieper and [the state-court defendant] were not properly subject to arbitration.” Id. On its face, the outcome in Pieper “seem[ed] indisputable“—Rooker-Feldman applied because Pieper sought a de facto reversal of the state court’s order to compel arbitration (despite the invocation of Pieper’s constitutional rights to due process, a jury trial, etc.). Id. at 461.
Yet Pieper offered a twist on Rooker and Feldman, both of which had involved final judgments from the state’s highest court. Congress gave the Supreme Court jurisdiction over “[f]inal judgments . . . rendered by the highest court of a state,”
Court couldn’t hear an appeal of this interlocutory order or an order from a lower state court, the order did not fall within the ambit of Rooker-Feldman’s negative inference. 336 F.3d at 462.
We disagreed, joining the majority of circuits at the time, and held “that the Rooker-Feldman doctrine does apply to interlocutory orders and to orders of lower state courts.” Id. (citing, inter alia, Campbell v. Greisberger, 80 F.3d 703, 707 (2d Cir. 1996); Port Auth. Police Benevolent Ass’n, Inc. v. Port Auth. of N.Y. & N.J. Police Dep’t, 973 F.2d 169, 178 (3d Cir. 1992)). The logic was obvious. If lower federal courts can’t review the final product of state-court litigation, why should a lower federal court entertain an interlocutory appeal so long as a state court hasn’t yet come to a conclusion? See id. “To hold otherwise would allow potential relitigation of every state-court order . . . .” Id. at 464.
RLR claims that Pieper’s logic has since been called into question by the Supreme Court’s decision in Exxon Mobil Corp. v. Saudi Basic Indus. Corp. 544 U.S. 280 (2005). Exxon was a dispute over the royalties derived from a joint business venture. Id. at 289. The Saudi Basic Industries Corporation (SABIC) sued Exxon Mobil in state court for a declaratory judgment “that the royalty charges were proper,” and two weeks later Exxon Mobil
The Supreme Court disagreed because Exxon Mobil “was not seeking to overturn the state-court judgment.” Id. at 291. To the contrary, both the state court and federal court properly exercised jurisdiction at the outset of each case. That the state court happened to reach judgment first implicated preclusion law rather than Rooker-Feldman. Id. at 292 (“When there is parallel state and federal litigation, Rooker-Feldman is not triggered simply by the entry of judgment in state court.“). Thus, Exxon stopped the use of Rooker-Feldman as a universal solution, halting its corrosion of concurrent jurisdiction in state and federal courts, preclusion law, and comity/abstention doctrines. Id. at 283–84, 292–93.
But the Supreme Court didn’t end Rooker-Feldman, despite some scholars’ suggestion otherwise. See, e.g., Samuel Bray, Rooker-Feldman (1923–2006), 9 Green Bag 2d 317, 317–18 (2006). The Court “h[e]ld” that Rooker-Feldman “is confined to cases of the kind from which the doctrine acquired its name: 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 rejection of those judgments.” Exxon, 544 U.S. at 284; accord Johnson v. De Grandy, 512 U.S. 997, 1006 (1994). Post-Exxon, the lower courts have worked to effect that confinement. But the general principle that “[f]ederal district courts do not stand as appellate courts for decisions of state courts” survives. Hall v. Callahan, 727 F.3d 450, 453 (6th Cir. 2013).
III
Here, we consider the scope of Rooker-Feldman’s confinement in answering a question that the Court left open: “does [Rooker-Feldman] apply to bar federal actions commenced after the grant of interlocutory relief in a state court proceeding[?]” Richard H. Fallon, Jr., John F. Manning, Daniel J. Meltzer & David L. Shapiro, Hart & Wechsler’s the Federal Courts and the Federal System 1411 (7th ed. 2015). But we don’t write on a blank slate. Because we’ve already said Rooker-Feldman does so apply in Pieper, we only answer whether Exxon “mandates modification” of that decision. See United States v. Moody, 206 F.3d 609, 615 (6th Cir. 2000). For the reasons outlined below, we determine that Exxon and Pieper can comfortably coexist and accordingly affirm.
Before we reach Pieper, however, we assess whether Rooker-Feldman applies at all. We review the district court’s Rooker-Feldman determination de novo. McCormick, 451 F.3d at 389.
A.
The starting point is the holding of Exxon: Rooker-Feldman applies in “[(1)] cases brought by state-court losers [(2)] complaining of injuries caused by state-court judgments [(3)] rendered before the district court proceedings commenced [(4)] and inviting district court review and rejection of those judgments.” Exxon, 544 U.S. at 284. “The key words are ‘review’ and ‘judgment.’” VanderKodde, 951 F.3d at 406 (Sutton, J., concurring). Usually Rooker-Feldman
“But there’s no complexity when the litigant directly asks a federal district court to” declare a state-court order to be unconstitutional and enjoin its enforcement. United States v. Alkaramla, 872 F.3d 532, 534 (7th Cir. 2017). Here, it’s clear that RLR asks us to review the state-court order of possession and that the order of possession counts as a judgment under Rooker-Feldman.
1.
There’s no question that RLR asks us to “review” what the state court did. After Exxon, we determine whether a plaintiff seeks review of a state-court judgment by looking at the “source of the injury the plaintiff alleges in the federal complaint,” McCormick, 451 F.3d at 393, and consider what relief the plaintiff requests, VanderKodde, 951 F.3d at 402 (majority opinion). If the injury’s source is not the judgment, then the plaintiff’s federal claim is independent of the state-court judgment and the district court has jurisdiction over the claim. See Hall, 727 F.3d at 454.
In its complaint, RLR asks for “[a] judgment declaring that the Order of Possession is unconstitutional and that the City took RLR’s private property without a proper public purpose in violation of the
RLR argues that it avoided the Rooker-Feldman doctrine by filing
RLR asks for the type of review Rooker-Feldman forbids. The Supreme Court limited Rooker-Feldman to instances “when a plaintiff asserts before a federal district court that a state court judgment itself was unconstitutional or in violation of federal law,” id., and that’s exactly what happened here.
2.
Whether the Order is a “judgment” under
460 U.S. at 479. To determine whether the action is ministerial, we ask “whether the state court addressed the claim ‘on the merits.’” Berry, 688 F.3d at 299 (quoting Feldman, 460 U.S. at 478).
The Order qualifies as a judgment. Under Tennessee law, the government can petition for condemnation of land—exercise its eminent domain power—as “long as the property is taken for a legitimate public use in accordance with the
Plainly, the judge made a merits determination. See Berry, 688 F.3d at 299. This case is far from those which find a court action to be merely ministerial. See, e.g., Van Hoven, 947 F.3d at 892–93 (holding that a writ of garnishment is ministerial because “[a] creditor may obtain one simply by filing a form with the court clerk, who then issues the writ as long as the request ‘appears to be correct’” (quoting
B.
RLR contends that Rooker-Feldman doesn’t apply because the Order is not a final judgment. According to its plain language,
In the Sixth Circuit, a three-judge panel may not overturn a prior decision unless a Supreme Court decision “mandates modification” of our precedent. Moody, 206 F.3d at 615; accord United States v. Elbe, 774 F.3d 885, 891 (6th Cir. 2014); see also Jacobs v. Alam, 915 F.3d 1028, 1036 (6th Cir. 2019). Absent such mandate, or a decision from our en banc court overruling our precedent, we are bound by what we’ve said before. Salmi v. Sec’y of HHS, 774 F.2d 685, 689 (6th Cir. 1985).
This principle is foundational to how the law develops. It serves the interests “of uniformity, certainty, and stability in the law.” New York Life Ins. Co. v. Ross, 30 F.2d 80, 83 (6th Cir. 1928). Without it, each case would be a brand of first-impression exploration. See Joseph W. Mead, Stare Decisis in the Inferior Courts, 12 Nev. L.J. 787, 795–96 (2012) (describing how, historically, three-judge circuit-court panels could overrule their own precedents). And the principle is also a critical piece of a larger stare decisis framework. It interlocks with its corollaries. For example, when two precedents conflict, we are bound to follow the first in time. United States v. Jarvis, 999 F.3d 442, 445–46 (6th Cir. 2021). And when it seems that the Supreme Court might soon change a doctrine, we leave that prerogative to the Court and do not try to anticipate the Court’s direction. See Rodriguez de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. 477, 484 (1989). Failure to adhere to one stare decisis principle echoes throughout the system.
The point is that our task is limited. Pieper has not been overruled by our en banc court. And the Supreme Court has not offered any “directly applicable” analysis that is inconsistent with Pieper. See United States v. White, 920 F.3d 1109, 1113 (6th Cir. 2019); Ne. Ohio Coal. for the Homeless v. Husted, 831 F.3d 686, 720–21 (6th Cir. 2016). So Pieper binds us. We ask not whether we would decide Pieper the same way with fresh eyes, but whether the holding of Exxon mandates modification of Pieper.
1.
First, RLR argues we have already recognized Exxon’s abrogation of Pieper. In Quality Associates, Inc. v. The Procter & Gamble Distributing LLC, we said in a footnote that Pieper was “displaced” by Exxon and that Rooker-Feldman now applies only “where the state proceedings . . . ended” prior to the filing of the federal complaint. 949 F.3d 283, 290 n.5 (6th Cir. 2020) (alteration in original) (quoting Nicholson v. Shafe, 558 F.3d 1266, 1277 (11th Cir. 2009)). But, as we later noted, any intimation that Exxon required a final judgment, including through appeal exhaustion, was dicta4 because in Quality Associates the relevant state-court order was not rendered until after the federal complaint was filed. See Hancock v. Miller, No. 20-5422, 2021 WL 1157843, at *6 n.4 (6th Cir. Mar. 26, 2021). There is no doubt that if a federal complaint is filed before the relevant state-court judgment, Rooker-Feldman does not apply. See, e.g., Hunter v. Hamilton Cnty. Bd. of Elections, 635 F.3d 219, 233 (6th Cir. 2011). After all, that’s Exxon itself.
2.
Second, RLR argues that Pieper is inconsistent with Exxon because, in its view, Exxon clarified that Rooker-Feldman only applies “at the end of state court proceedings, not to interlocutory state court orders.” This argument has prevailed at times in other circuits. When we decided Pieper, we joined the majority of circuits in holding that Rooker-Feldman applied to interlocutory orders. 336 F.3d at 462. Since then, most circuits that have considered RLR’s argument that Exxon abrogated Pieper’s analogs have agreed. See, e.g., Malhan v. Sec’y U.S. Dep’t of State, 938 F.3d 453, 461 (3d Cir. 2019); Nicholson, 558 F.3d at 1279; Guttman v. Khalsa, 446 F.3d 1027, 1031 (10th Cir. 2006) (”Exxon Mobil reverses this holding [that Rooker-Feldman applies to interlocutory orders].“).5
But of those circuits that have eschewed Pieper’s categorial rule, most have not adopted the opposite categorical rule in its place. Rather, they have adopted a hybrid approach, first articulated by the First Circuit in Federación de Maestros de P.R. v. Junta de Relaciones del Trabajo de P.R., 410 F.3d 17
410 F.3d 17, 24 (1st Cir. 2005). See Malhan, 938 F.3d at 459 (collecting authorities). The hybrid approach applies Rooker-Feldman when (1) the state court of last resort has affirmed the judgment; (2) the time to appeal has expired or the parties voluntarily terminated litigation; or (3) the state court of last resort has resolved the relevant federal issue but state law or factual issues remain. Id. at 459–60 (distilling the test from Federación de Maestros, 410 F.3d at 24–25).
Some circuits, moreover, have split on the Pieper issue.6 The Seventh Circuit, for example, has taken a variety of approaches. It has said that Rooker-Feldman “does not apply independently to interlocutory orders.” Kowalski v. Boliker, 893 F.3d 987, 995 (7th Cir. 2018); accord TruServ Corp. v. Flegles, Inc., 419 F.3d 584, 591 (7th Cir. 2005). But it has also said that “interlocutory orders entered prior to the final disposition of state court lawsuits are not immune from the jurisdiction-stripping powers of Rooker-Feldman.” Sykes v. Cook Cnty. Cir. Ct. Prob. Div., 837 F.3d 736, 742 (7th Cir. 2016). And it has said
that state-court decisions too provisional to deserve review within the state’s own system can be reviewed by federal district and appellate courts.’” Id. at 867 (quoting Harold, 773 F.3d at 886).
In sum, some circuits have found RLR’s argument that Exxon abrogated Pieper convincing. But there is not unanimity.
3.
Holding that Pieper survives would be in tension with some of these cases, and we are hesitant to deepen any conflicts between the circuits. But we must decide independently whether Exxon mandates modification of Pieper. Based on Exxon’s explicit holding, the Court’s definition of “judgment” for Rooker-Feldman purposes, and Exxon’s focus on allowing parallel litigation, we think Pieper and Exxon can comfortably coexist. The litigation here is an impermissible “covert appeal,” not a parallel proceeding. See Van Hoven, 947 F.3d at 892. We developed the source-of-the-injury test to implement Exxon’s holding, and Pieper faithfully applies that test.
Look first at the explicit holding of Exxon:
The Rooker-Feldman doctrine, we hold today, is confined to cases of the kind from which the doctrine acquired its name: [1] cases brought by state-court losers [2] complaining of injuries caused by state-court judgments [3] rendered before the district court proceedings commenced and [4] inviting district court review and rejection of those judgments.
544 U.S. at 284. As outlined above, there’s no question that RLR lost in state court, that the Order was rendered before the federal complaint here was filed, and that the complaint invited the district court to review the Order.
The only question left is whether “judgments” means only final judgments. The Court has never answered this question, and the verbiage the Court uses is not dispositive on this point. In the Court’s specific enunciation of its holding, it only said “judgment.” And not all “judgments” are final. Cf.
On the other hand, the Court’s earlier explanations of the term “judgment” don’t support a finality requirement. In Feldman, for example, the Court differentiated
Whether a litigant has a right to appeal doesn’t affect whether the litigant is the subject of a judicial action. In other words, whether a litigant may yet appeal a decision does not mean that the decision was not “on the merits.” Id. (quoting Feldman, 460 U.S. at 478). This illuminates an interpretive path to reading Exxon and Pieper together: Exxon requires a state court to have “rendered judgment” for Rooker-Feldman to apply, which means to have made a decision on the merits, and merits decisions do not always require finality.
There is evidence to the contrary. The Exxon Court referenced the finality of the judgments in Rooker and Feldman themselves when describing those cases. Exxon, 544 U.S. at 286. This is the language on which our sister circuits have focused: the facts of Rooker and Feldman were that “the losing party in state court filed suit in federal court after the state proceedings ended.” Nicholson, 558 F.3d at 1274 (emphasis added) (quoting Exxon, 544 U.S. at 291); see Malhan, 938 F.3d at 461. State proceedings haven’t ended when an appeal is pending, they reason, so they conclude Exxon means that Rooker-Feldman only applies when state appeals (or the possibility thereof) are exhausted. Nicholson, 558 F.3d at 1279; see Federación de Maestros, 410 F.3d at 24.
We don’t find that language compelling, at least so far as to mandate a finality requirement. The finality of the state-court proceedings was not critical to the outcome in Exxon.7 And Exxon never said that all state proceedings had to have ended for Rooker-Feldman to apply. Exxon was focused on the fact that the parties “properly invoked concurrent jurisdiction” and the Court’s point was that neither’s jurisdiction “vanishes” when one sovereign’s court reaches judgment. Exxon, 544 U.S. at 292; see ADSA, Inc. v. Ohio, 176 F. App’x 640, 643 n.1 (6th Cir. 2006) (describing the holding of Exxon as requiring litigants to prove that “the federal proceedings are not parallel to the state-court proceedings” to invoke Rooker-Feldman). Though the state-court order that RLR attacks here was not a final, appealable order from the state’s highest court, the order was already in place when RLR came to federal court. Rather than invoking concurrent jurisdiction over an unadjudicated question, RLR asked the district court to strike down an existing state-court order.
Exxon doesn’t tell us when a state-court judgment matures for Rooker-Feldman purposes because in Exxon the federal complaint was filed before the state court reached any merits decision. This temporal boundary from Exxon, that a “state-court judgment [be] rendered before the district court proceedings commenced,” is contained within the source-of-the-injury test. Exxon, 544 U.S. at 284. Exxon fails the test: Exxon Mobil
And the source-of-the-injury test is not inconsistent with Pieper. If true parallel litigation exists, Rooker-Feldman does not apply because both litigants “properly invoked concurrent jurisdiction” (Exxon). Exxon, 544 U.S. at 292. Once one court reaches final judgment, preclusion law applies. See id. at 293. But if a litigant is unhappy with a state-court decision and goes to a federal court to remedy that loss, that “invokes the same idea of respect for state courts
as preclusion” but is conceptually distinct (Pieper). Hancock, 2021 WL 1157843, at *4. Rooker-Feldman applies. The litigant in the second example could not have filed its suit in federal court any earlier because the injury (the state-court judgment) had not yet occurred. When that litigant comes to federal court to seek “review and rejection of [the existing state-court] judgment[]” that caused its injury, Rooker-Feldman’s jurisdictional bar governs. Exxon, 544 U.S. at 284.
In other words, it remains true after Exxon that “lower federal courts possess no power whatever to sit in direct review of state court decisions.” Feldman, 460 U.S. at 482 n.16 (citation omitted). That’s what happened here. RLR lost in state court and, dissatisfied with the result, asked the district court to come to the opposite conclusion and undo the state court’s Order. That’s not parallel litigation. RLR lost before it sought federal-court review, and RLR would not have had the injury it complained of but-for the state court’s Order. RLR “plainly has . . . repaired to federal court to undo the [state court] judgment,” which, in the words of Exxon, is “the paradigm situation in which Rooker-Feldman” applies. 544 U.S. at 293.
Nothing in Exxon mandates that Rooker-Feldman does not apply to interlocutory orders. And, despite our dissenting colleague’s arguments to the contrary, neither does anything in Lance v. Dennis, 546 U.S. 459 (2006). The dissent correctly points out that, in introducing the Rooker-Feldman doctrine, Lance says “lower federal courts are precluded from exercising appellate jurisdiction over final state-court judgments.” See Dissenting Op. at 20, 24, 29; Lance, 546 U.S. at 463. But the dissent overreads this introductory statement. The statement does not purport to be exclusive. Lance dealt with a final state-court judgment, Lance, 546 U.S. at 461–62, so it is not surprising that it stated the rule in those terms. Lance had no occasion to discuss Rooker-Feldman’s application to non-final orders. And the dissent ignores Lance’s later statement that Rooker-Feldman is available when “a party in effect seeks to take an appeal of an unfavorable state-court decision to a lower federal court,” or, in other words, “takes a de facto appeal.” Id. at 466 & n.2. Lance simply does not address the question whether Rooker-Feldman bars de facto appeals from interlocutory state-court orders.
Indeed, we appeared to recognize this in McCormick, which issued shortly
* * *
We recognize that the Court “warned” that the lower courts had gone too far in extending Rooker-Feldman. Malhan, 938 F.3d at 461 (quoting Lance, 546 U.S. at 464). But the Court has also made clear that ”Rooker-Feldman is not simply preclusion by another name.” Lance, 546 U.S. at 466. We need to be mindful of extending the Supreme Court decisions farther than they reach, cf. Rodriguez de Quijas, 490 U.S. at 484, and to remain faithful to our precedent, see Elbe, 774 F.3d at 891. Those principles carry special force when our precedent circumscribes our jurisdiction. Cf. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (“Federal courts are courts of
The judgment of the district court is AFFIRMED.
RLR INVESTMENTS, LLC, Plaintiff-Appellant, v. CITY OF PIGEON FORGE, TENNESSEE, Defendant-Appellee.
No. 20-6375
United States Court of Appeals for the Sixth Circuit
Decided and Filed: July 13, 2021
DISSENT
CLAY, Circuit Judge, dissenting. The district court invoked the Rooker-Feldman doctrine to hold that it lacked jurisdiction over this case because of an interlocutory order entered by a state trial court. But Rooker-Feldman “preclude[s]” lower federal courts “from exercising appellate jurisdiction over final state-court judgments,” not nonfinal state court interlocutory orders. Lance v. Dennis, 546 U.S. 459, 463 (2006) (emphasis added); accord Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 291 (2005). Accordingly, in line with every other circuit to have published a considered opinion on this issue, Exxon and Lance require this Court to overrule Pieper v. American Arbitration Association, Inc., 336 F.3d 458 (6th Cir. 2003)—our pre-Exxon and -Lance opinion expanding the Rooker-Feldman doctrine to include state court interlocutory orders. Because the majority continues to apply Pieper, I dissent.
I.
“Federal courts are courts of limited jurisdiction . . . possess[ing] only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citing Willy v. Coastal Corp., 503 U.S. 131, 136–137 (1992); Bender v. Williamsport Area School Dist., 475 U.S. 534, 541 (1986)). But when the Constitution or Congress provide jurisdiction, federal courts have a “virtually unflagging obligation . . . to exercise the jurisdiction given them.” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817–18 (1976) (citing England v. Louisiana State Bd. of Medical Examiners, 375 U.S. 411, 415 (1964); McClellan v. Carland, 217 U.S. 268, 281 (1910); Cohens v. Virginia, 6 Wheat. 264, 404 (1821)). Relevant to this case in which RLR asserted claims under the
states that
A.
In Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), the appellant sought to have the federal district court declare a “judgment of a circuit court in Indiana, which was affirmed by the Supreme Court of the state, . . . null and void, and to obtain other relief dependent on that outcome.” Id. at 414. Relying on a precursor to
Over the next sixty years, the Supreme Court “cited Rooker in one opinion, Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 283 (1946), in reference to the finality of prior judgments.” Exxon, 544 U.S. at 288 n.3. But in 1983, in District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983), the Supreme Court confronted the question of “what authority the United States District Court for the District of Columbia and the United States Court of Appeals for the District of Columbia Circuit have to review decisions of the District of Columbia Court of Appeals . . . .” Id. at 463. The answer: none. See id. at 486-87. Relying on
From these two cases standing for the unremarkable proposition that only the United States Supreme Court can exercise appellate jurisdiction over final decisions of a state Supreme Court, see
In line with this trend, although
B.
As the majority explains, under Pieper, the district court correctly held that the Rooker-Feldman doctrine applies to interlocutory orders, including the one at issue
C.
In Exxon, “two subsidiaries of petitioner Exxon Mobil Corporation . . . formed joint ventures with respondent Saudi Basic Industries Corp. (SABIC) to produce polyethylene in Saudi Arabia.” Id. at 289. After “the parties began to dispute royalties . . . SABIC preemptively sued the two ExxonMobil subsidiaries in Delaware Superior Court in July 2000 seeking a declaratory judgment that the royalty charges were proper under the joint venture agreements.” Id. “About two weeks later, ExxonMobil and its subsidiaries countersued SABIC in the United States District Court for the District of New Jersey, alleging that SABIC overcharged the joint ventures for the sublicenses.” Id. On an appeal of the federal district court‘s denial of SABIC‘s motion to dismiss, the Third Circuit held that it lacked jurisdiction under Rooker-Feldman because, while the action was pending in federal court, a state court judgment had been entered. See id. at 289-291.
In a unanimous opinion, the Supreme Court reversed. The Supreme Court explained that “[s]ince Feldman, this Court has never applied Rooker-Feldman to dismiss an action for want of jurisdiction,” but that the “doctrine has sometimes been construed to extend far beyond the contours of the Rooker and Feldman cases, overriding Congress’ conferral of federal-court jurisdiction concurrent with jurisdiction exercised by state courts, and superseding the ordinary application of preclusion law pursuant to
One year later, in Lance, the Supreme Court reiterated “the narrowness of the Rooker-Feldman rule.” 546 U.S. at 464. The Court also retold the origins of the doctrine: “This Court is vested, under
The combination of Exxon and Lance ostensibly severely curtailed the lower federal courts’ reliance on the Rooker-Feldman doctrine as a docket-clearing device. In a dissent in Lance unrelated to the Court‘s disposition of the Rooker-Feldman issue, Justice Stevens explained that, in Exxon, “the Court finally interred the so-called ’Rooker-Feldman doctrine,“’ and that, in Lance, “the Court quite properly disapproves of the District Court‘s resuscitation of a doctrine that has produced nothing but mischief for 23 years.” Lance, 546 U.S. at 468 (Stevens, J., dissenting). A mock obituary for Rooker-Feldman was even published by one scholar. See Samuel Bray, Rooker-Feldman (1923-2006), 9 Green Bag 2d 317 (2006); see also Vladeck, supra, at 566 (characterizing Exxon and Lance as a “twin killing” of Rooker-Feldman).
D.
However, rather than heed the Supreme Court‘s efforts to reign in the Rooker-Feldman doctrine, lower courts, like the majority does today, have continued to invoke the doctrine.“One empirical analysis suggests the doctrine proliferated even more after Exxon Mobil‘s attempt to limit it.” VanderKodde v. Mary Jane M. Elliott, P.C., 951 F.3d 397, 407 (6th Cir. 2020) (Sutton, J., concurring) (citing Raphael Graybill, Comment, The Rook That Would Be King: Rooker-Feldman Abstention Analysis After Saudi Basic, 32 Yale J. on Reg. 591, 591-92 (2015)). But one area where the circuit courts have consistently limited Rooker-Feldman post-Exxon and -Lance is on the issue of whether it applies to state court interlocutory orders.
Two months after the Supreme Court‘s unanimous decision in Exxon, in Federación de Maestros de Puerto Rico v. Junta de Relaciones del Trabajo de Puerto Rico, the First Circuit decided whether the Rooker-Feldman doctrine applies to state court interlocutory orders.1 See 410 F.3d 17, 19 (1st Cir. 2005). The First Circuit explained that ”Exxon Mobil tells us when a state court judgment is sufficiently final for operation of the Rooker-Feldman doctrine:
In other words, the First Circuit‘s test looks to whether the state court judgment at issue was “effectively final.” Malhan v. Sec‘y United States Dep‘t of State, 938 F.3d 453, 459 (3d Cir. 2019). If so, “then a federal suit seeking an opposite result is an impermissible attempt to appeal the state judgment to the lower federal courts, and, under Rooker-Feldman, the federal courts lack jurisdiction.” Federación, 410 F.3d at 24. But outside of the three limited situations wherethe First Circuit considered “the state proceedings [to have] ended,” the First Circuit explained that “even if the federal plaintiff expects to lose in state court and hopes to win in federal court—the litigation is parallel, and the Rooker-Feldman doctrine does not deprive the court of jurisdiction.” Id. (quoting Exxon, 544 U.S. at 291-293).
Following the First Circuit‘s lead, the Second, Third, Fourth, Fifth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits all subsequently held that, post-Exxon, the Rooker-Feldman doctrine does not ordinarily apply to state court interlocutory orders.2 See Hoblock v. Albany Cnty. Bd. of Elections, 422 F.3d 77, 89 (2d Cir. 2005); Malhan, 938 F.3d at 459-460; Hulsey v. Cisa, 947 F.3d 246, 250 (4th Cir. 2020) (“[T]he [Rooker-Feldman] doctrine simply precludes federal district courts from exercising what would be, in substance, appellate jurisdiction over final state-court judgments.“); Thana v. Bd. of License Commissioners for Charles Cnty., Maryland, 827 F.3d 314, 321 (4th Cir. 2016) (explaining that the Rooker-Feldman doctrine “does not apply here because the district court here was not called upon to exercise appellate jurisdiction over a final judgment from ‘the highest court of a State in which a decision could be had,’ as was the case in both Rooker and Feldman.” (quoting
Robins v. Ritchie, 631 F.3d 919, 926-28 (8th Cir. 2011);5 Mothershed v. Justices of Supreme Court, 410 F.3d 602, 604 n.1 (9th Cir. 2005), as amended on denial of reh‘g, 2005 WL 1692466 (9th Cir. July 21, 2005);6 Guttman v. Khalsa, 446 F.3d 1027, 1032 & n.2 (10th Cir. 2006); Nicholson v. Shafe, 558 F.3d 1266, 1274-76, 1279 (11th Cir. 2009). Moreover, the First, Second, Third, Tenth, and Eleventh Circuits all explicitly overturned inconsistent pre-Exxon circuit precedent. See Federación, 410 F.3d at 27-28; Green v. Mattingly, 585 F.3d 97, 101 (2d Cir. 2009); Malhan, 938 F.3d at 458-59; Guttman, 446 F.3d at 1031; Nicholson, 558 F.3d at 1274.
II.
A.
Until today, we were not an outlier from the ten other circuits that have held that
B.
But today, the majority casts aside the relevant discussion in Quality Associates as dicta, ignores the Supreme Court‘s “warn[ing] that the lower courts have at times extended Rooker-Feldman ‘far beyond the contours of the Rooker and Feldman cases,“’ Lance, 546 U.S. at 464 (quoting Exxon, 544 U.S. at 283), and creates a circuit split by incorrectly holding that “[u]nder Rooker-Feldman—even after Exxon—federal district courts don‘t have jurisdiction over appeals of interlocutory state-court orders,” Maj. Op. at 19. However, Exxon and Lance require that this Court overrule Pieper and hold that the Rooker-Feldman doctrine does not apply to nonfinal state court interlocutory orders.
As explained above,
While the rationale underlying the Rooker-Feldman doctrine makes it clear that a nonfinal lower state court order cannot divest lower federal courts of jurisdiction, pre-Exxon, this Court was not alone in holding otherwise. See Pieper, 336 F.3d at 462-63 (collecting cases). But, in Exxon and Lance, the Supreme Court reiterated that Rooker-Feldman stems from
C.
The majority nonetheless asserts that the “language” from Exxon is not “compelling, at least so far as to mandate a finality requirement” because “[t]he finality of the state-court proceedings was not critical to the outcome in Exxon.” Maj. Op. at 15-16. However, as explained at length above, critical to both Exxon and Lance was the imperative to confine the
Rooker-Feldman doctrine to its roots as a means of enforcing Congress‘s exclusive grant of appellate jurisdiction to the United States Supreme Court over
The majority also suggests that Lance did not mean what it said when it held that, under “the Rooker-Feldman doctrine, lower federal courts are precluded from exercising appellate jurisdiction over final state-court judgments.” 546 U.S. at 463 (emphasis added). According to the majority, ”Lance simply does not address the question whether Rooker-Feldman bars de facto appeals from interlocutory state-court orders.” Maj. Op. at 17. In support, the majority seizes upon both a statement in Lance explaining that Rooker-Feldman “applies only in ‘limited circumstances,’ where a party in effect seeks to take an appeal of an unfavorable state-court decision to a lower federal court,” and a reference to “a de facto appeal.” Id. at 466 & n.2 (quoting Exxon, 544 U.S. at 291). However, the words “in effect” and “de facto appeal” merely describe a situation in which Rooker-Feldman may be implicated. Rooker-Feldman does not require that the plaintiff file a notice of appeal from the state court‘s judgment in the district court. Nor does it require that the complaint hold itself out as appealing the state court judgment. Instead, even when the plaintiff explicitly seeks to invoke the district court‘s original jurisdiction, in certain “limited circumstances,” namely, when the plaintiff is “the losing party in state court” who “filed suit in federal court after
Moreover, the majority‘s treatment of Lance is striking in light of its reliance on our decision in McCormick v. Braverman, 451 F.3d 382 (6th Cir. 2006). Immediately after excisingLance‘s holding that “lower federal courts are precluded from exercising appellate jurisdiction over final state-court judgments,” 546 U.S. at 463, the majority asserts that our decision in McCormick supports its novel holding that, post-Exxon and -Lance, Rooker-Feldman applies to all state court interlocutory orders. However, while McCormick appeared to concern an interlocutory state court order, we never engaged with the interlocutory nature of the state court order, discussed Exxon‘s holding that Rooker-Feldman only applies when “the losing party in state court filed suit in federal court after the state proceedings ended,” 544 U.S. at 291, or even cited Pieper. Thus, while, on the one hand, the majority (incorrectly) rejects Lance‘s holding on the grounds that ”Lance simply does not address the question whether Rooker-Feldman bars de facto appeals from interlocutory state-court orders,” on the other hand, the majority relies on McCormick even though “[McCormick] simply does not address the question whether Rooker-Feldman bars de facto appeals from interlocutory state-court orders.” Maj. Op. at 17.
The majority‘s decision to read into McCormick a holding that is completely absent from the opinion is particularly odd in light of its decision to dismiss as dicta our recognition in Quality Associates that Exxon “displaced” Pieper and that “the Supreme Court ‘confined’ the application of the Rooker-Feldman doctrine to cases resembling Rooker and Feldman where the ‘state proceedings [have] ended.“’ 949 F.3d at 290 n.5 (quoting Nicholson, 558 F.3d at 1277); see also Veasley, 623 F. App‘x at 294; Shafizadeh, 476 F. App‘x at 72. In other words, notwithstanding Quality Associates’ alignment with
III.
Much of the majority opinion appears to be motivated by a concern that litigants like RLR will rush to federal court after an adverse state court interlocutory order and seek a contrary judgment in federal court. As an initial matter, such policy concerns are irrelevant to this Court‘s exercise of jurisdiction. As explained above, federal courts have a “virtually unflagging obligation . . . to exercise the jurisdiction given them,” Colorado River, 424 U.S. at 817, andCongress has provided for concurrent federal court and state court jurisdiction, see McClellan, 217 U.S. at 282.
Moreover, in Exxon, the Supreme Court explicitly explained that
Furthermore, when a litigant files suit in federal court before the state court in the parallel proceeding enters a judgment that carries preclusive effects, the federal courts have tools at their disposal to ensure that judicial resources are not wasted. For example, under the doctrine of Colorado River abstention—which the City raised as an alternative argument in its motion to dismiss—“a federal district court may abstain from exercising its subject matter jurisdiction due to the existence of a concurrent state court proceeding, based on ‘considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.“’ PaineWebber, Inc. v. Cohen, 276 F.3d 197, 206 (6th Cir. 2001) (quoting Colorado River, 424 U.S. at 817). And where, as here, the parallel state court proceedings are far along enough that the state court issued an interlocutory order on the meritsbefore the federal action was filed, several of the Colorado River factors tilt heavily in favor of the federal court abstaining. See Romine v. Compuserve Corp., 160 F.3d 337, 340 (6th Cir. 1998) (explaining that “in deciding whether to defer to the concurrent jurisdiction of a state court, a district court must consider such factors as” the “avoidance of piecemeal litigation;” “the order in which jurisdiction was obtained;” and “the relative progress of the state and federal proceedings.“); see also D.A. Osguthorpe Fam. P‘ship v. ASC Utah, Inc., 705 F.3d 1223, 1226, 1232, 1236 (10th Cir. 2013) (affirming the district court‘s abstention under the Colorado River doctrine after concluding that Rooker-Feldman was not applicable because the state court order at issue was not final). Significantly, “[s]tay orders based on Colorado River effectively end the litigation in federal court, ‘because the district court would be bound, as a matter of res judicata, to honor the state court‘s judgment.“’ RSM Richter, Inc. v. Behr Am., Inc., 729 F.3d 553, 556 (6th Cir. 2013) (quoting Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 713 (1996)); see also Exxon, 544 U.S. at 293. Thus, in addition to
***
In sum, Pieper‘s holding “that the Rooker-Feldman doctrine does apply to interlocutory orders and to orders of lower state courts” is no longer tenable post-Exxon and -Lance. 336 F.3d at 462. In line with every other circuit to have fully considered this issue, Exxon and Lance require this Court to modify Pieper and hold that Rooker-Feldman does not apply to nonfinal state court judgments. See Quality Associates, 949 F.3d at 290 n.5 (explaining that Exxon “displaced” Pieper). Because the majority concludes otherwise, and accordingly affirms the district court‘s holding that it lacked jurisdiction under Rooker-Feldman, I respectfully dissent.
Notes
Feldman, 460 U.S. at 482 n.16. “Since Exxon Mobil, the D.C. Circuit has not considered whether the Rooker-Feldman doctrine bars lower federal courts” from “review of interlocutory orders from state courts.” William Penn Apartments v. D.C. Ct. of Appeals, 39 F. Supp. 3d 11, 18 (D.D.C. 2014). It is worth noting, however, that at least one district court within the District of Columbia has adopted “the Federación analysis” and held “that the Rooker-Feldman doctrine applies only to cases where the state proceedings have ended.” Id. at 17-18.If the constitutional claims presented to a United States District Court are inextricably intertwined with the state court’s denial in a judicial proceeding of a particular plaintiff’s application for admission to the state bar, then the District Court is in essence being called upon to review the state court decision. This the District Court may not do.