SURENDER MALHAN, for himself and as parent of E.M. and V.M., Appellant v. SECRETARY UNITED STATES DEPARTMENT OF STATE; ATTORNEY GENERAL NEW JERSEY; STATE OF NEW JERSEY; ELIZABETH CONNOLLY, in her official capacity as acting Commissioner of Office of Child Support Services; NATASHA JOHNSON, in her official capacity as Director Division of Family Development; JOHN DOES 1-10; OFFICE OF CHILD SUPPORT SERVICES
No. 18-3373
United States Court of Appeals for the Third Circuit
September 18, 2019
Honorable Mitchell S. Goldberg, District Judge, United States District Court for the Eastern District of Pennsylvania, sitting by designation.
PRECEDENTIAL. Argued on April 3, 2019. On Appeal from the United States District Court for the District of New Jersey (D.C. No. 2-16-cv-08495). District Judge: Honorable Claire C. Cecchi.
PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 18-3373
SURENDER MALHAN, for himself and as parent of E.M. and V.M., Appellant
v.
SECRETARY UNITED STATES DEPARTMENT OF STATE; ATTORNEY GENERAL NEW JERSEY; STATE OF NEW JERSEY; ELIZABETH CONNOLLY, in her official capacity as acting Commissioner of Office of Child Support Services; NATASHA JOHNSON, in her official capacity as Director Division of Family Development; JOHN DOES 1-10; OFFICE OF CHILD SUPPORT SERVICES
On Appeal from the United States District Court for the District of New Jersey (D.C. No. 2-16-cv-08495) District Judge: Honorable Claire C. Cecchi
Argued on April 3, 2019
Before: CHAGARES and HARDIMAN, Circuit Judges, and GOLDBERG,* District Judge.
(Filed September 18, 2019)
Paul A. Clark [Argued]
Suite 1N
10 Huron Avenue
Jersey City, NJ 07306
Attorney for Appellant
Melissa H. Raksa
Ragner E. Jaeger [Argued]
Office of Attorney General of New Jersey
Department of Health & Human Services
25 Market Street
Richard J. Hughes Justice Complex
Trenton, NJ 08625
Attorneys for Appellees
OPINION OF THE COURT
HARDIMAN, Circuit Judge.
This case arises out of a family law dispute that began in
* Honorable Mitchell S. Goldberg, District Judge, United States District Court for the Eastern District of Pennsylvania, sitting by designation.
Over the past eight years, the family court has required Appellant Surender Malhan to pay some $300,000 in child and spousal support to his putative ex-wife, Alina Myronova. The crux of Malhan‘s complaint is that New Jersey officials violated his federal rights when they failed to reduce his
I
In February 2011, Myronova sued Malhan for divorce in Hudson County, New Jersey.1 The family court awarded Myronova full custody of the couple‘s two minor children and ordered Malhan to pay $6,000 per month for child and spousal support. Malhan also had to give Myronova rental income from their jointly owned properties, which the court earmarked for mortgage payments.
After suffering these setbacks, Malhan received some favorable rulings from the family court. In 2012, he was awarded joint custody of the children, which increased their proportion of overnight stays with Malhan from zero to more than half. The year after, the court found Myronova owed Malhan about $44,000, half of which was rental income Myronova had embezzled for personal use rather than pay the mortgage. The other half was spousal support the court ordered her to return because she had been living with her boyfriend.
Soon after he obtained these favorable rulings, Malhan sought a reduction in his child support obligations. But the court decided to postpone any reduction until a final judgment of divorce, which still has not issued. And in the years since, the gap between what Malhan must pay and what he should pay has only widened. See
Despite this reversal in their economic fortunes, Malhan still must pay Myronova $3,000 per month in child support—an amount the court refuses to recalculate even after acknowledging it is unusual “for a parent who is not the parent of primary residence” to receive child support. App. 56 ¶ 79. Relying on that comment, Malhan briefly stopped paying child support. Because the comment was not an order lifting his obligations, however, Malhan fell into arrears, and the court ordered his wages garnished.
Unable to find relief in family court, Malhan filed a six-count complaint in federal court. The three counts most relevant to this appeal seek declaratory or injunctive relief against New Jersey officials for violating federal law:
- Count 2 challenges the disclosure of Malhan‘s bank records and the administrative levy of his bank account. It alleges violations of
42 U.S.C. § 669a , a provision of the Child Support Enforcement Amendments of 1984 (CSEA) to Title IV-D of the Social Security Act. See Pub. L. No. 98-378, 98 Stat. 1305; App. 42–49. - Count 5 claims Defendants are violating Malhan‘s right to due process of law by refusing to permit counterclaims
and offsets to his child and spousal support debt. See App. 54–55. - Count 6 alleges that the garnishment of Malhan‘s wages violates the CSEA and § 303 of the Consumer Credit Protection Act,
15 U.S.C. § 1673 . See App. 55–64. The family court‘s garnishment order was in place until March 2018. The court then vacated its order in response to the U.S. Department of Labor, which said the garnishment violated § 1673(c). See App. 75–76.2
The District Court dismissed Counts 2, 5, and 6 on two independent grounds. First, the Court held it lacked subject matter jurisdiction under the Rooker-Feldman doctrine, which bars district court review of state court judgments. See Malhan v. Tillerson, 2018 WL 2427121, at *6–8 (D.N.J. May 30, 2018). It reasoned “(1) the Family Court has made a determination as to Plaintiff‘s parenting situation, as well as Plaintiff‘s child support obligations; (2) Plaintiff is complaining of these findings; (3) the Family Court made its findings before Plaintiff filed this matter; and (4) Plaintiff is asking this Court to overturn the Family Court‘s findings.” Id. at *6 (applying Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 166 (3d Cir. 2010)). Second, the Court invoked Younger abstention to decline jurisdiction. See id. at *6–8. It did so because Malhan‘s suit implicated “important state interests” and the New Jersey family court offered an “adequate opportunity to raise federal claims.” Id. at *7. Malhan filed this timely appeal.3
And the State points to nothing in the record that suggests the levy is moot. Its only citation is to the District Court opinion, which noted that the family court had vacated its garnishment order. Malhan, for his part, certifies that OCSS levied his bank account as recently as February 2018. App. 72 ¶ 17. He attaches a scan of OCSS‘s own “Notice of Levy” as support. App. 73–74.
II
A
We first address the District Court‘s holding that it lacked jurisdiction under Rooker-Feldman. That doctrine conflicts with the familiar maxim that federal courts have a “virtually unflagging” duty to exercise jurisdiction conferred by Congress. Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976). At the same time, federal district courts are not amenable to appeals from disappointed state court litigants. A litigant seeking to appeal a state court judgment must seek review in the United States Supreme Court under
Rooker and Feldman exhibit the limited circumstances in which [the] Court‘s appellate jurisdiction over state-court judgments,
28 U.S.C. § 1257 , precludes a United States district court from exercising subject-matter jurisdiction in an action it would otherwise be empowered to adjudicate under a congressional grant of authority, e.g.,§ 1330 (suits against foreign states),(federal question), and § 1331 § 1332 (diversity).
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 291 (2005) (emphasis added).
Although those “limited circumstances” arose only twice in the Supreme Court—in Rooker and Feldman themselves—lower courts applied the doctrine liberally for some time. See, e.g., id. at 283; Thomas D. Rowe Jr. & Edward L. Baskauskas, “Inextricably Intertwined” Explicable at Last? Rooker-Feldman Analysis after the Supreme Court‘s Exxon Mobil Decision, 1 Fed. Cts. L. Rev. 367, 370–71 (2006). That changed in 2005 when the Court decided Exxon. There, the Court reversed our expansive interpretation of Rooker-Feldman and “confined” the doctrine “to cases of the kind from which [it] 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; accord, e.g., Geness v. Cox, 902 F.3d 344, 360 (3d Cir. 2018).
Given these elements, the problem with the District Court‘s application of Rooker-Feldman is readily apparent: Malhan does not “complain[] of injuries caused by [a] state-court judgment.” Exxon, 544 U.S. at 284 (emphasis added). In fact, as the District Court implied in its order denying reconsideration, there is no judgment at all because Malhan is complaining of “findings” and “determinations” of the family court. App. 4. But does Rooker-Feldman apply to the family court‘s interlocutory orders?
The answer is less than clear. Before Exxon, we thought Rooker-Feldman barred review of interlocutory state court orders that “resolved, at least for the moment, the dispute between the parties which forms the basis of the federal complaint.” Port Auth. Police Benev. Ass‘n, Inc. v. Port Auth. of N.Y. & N.J. Police Dep‘t, 973 F.2d 169, 178 (3d Cir. 1992). Since Exxon, we have not addressed whether Port Authority remains good law. See, e.g., Argen v. Kessler, 2018 WL 4676046, at *6–7 & n.10 (D.N.J. Sept. 28, 2018). And the decisions of our panels and district courts have been inconsistent. Compare, e.g., Shawe v. Pincus, 265 F. Supp. 3d 480, 489 (D. Del. 2017) (citing Port Authority and collecting four non-precedential opinions applying Rooker-Feldman to interlocutory orders after Exxon), and Mayeres v. BAC Home Loans, 2011 WL 2945833, at *4 (Bankr. D.N.J. July 21, 2011) (citing Port Authority and stating “the suggestion that Rooker-Feldman
Exxon itself offers conflicting guidance. On the one hand, “judgment” might include non-final orders like preliminary injunctions. That reading would follow the Federal Rules of Civil Procedure. See
Fortunately, six of our sister circuits have reconciled Exxon‘s different readings by holding that interlocutory orders are “judgments” only when they are effectively final. The foundational case in this “practical finality” approach is the First Circuit‘s Federacion de Maestros de Puerto Rico v. Junta de Relaciones del Trabajo de Puerto Rico, 410 F.3d 17 (1st Cir. 2005). Five courts of appeals have cited Federacion with approval. See Robins v. Ritchie, 631 F.3d 919, 927 (8th Cir. 2011); Nicholson v. Shafe, 558 F.3d 1266, 1274–76, 1279 (11th Cir. 2009); Guttman v. Khalsa, 446 F.3d 1027, 1032 & n.2 (10th Cir. 2006); Hoblock v. Albany Cty. Bd. of Elections, 422 F.3d 77, 89 (2d Cir. 2005); 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).
Federacion outlines three situations in which there is a Rooker-Feldman “judgment.” The first is when “the highest state court in which review is available has affirmed the judgment below and nothing is left to be resolved.” Federacion, 410 F.3d at 24. Then the judgment is a “[f]inal judgment[] or decree [] rendered by the highest court of a State in which a decision could be had” under
The second situation is when “the state action has reached a point where neither party seeks further action.” Federacion, 410 F.3d at 24. An example is when a lower state court “issues a judgment and the losing party allows the time for appeal to expire.” Id. Or “the lower state court does not issue a judgment but merely an interlocutory order (e.g., a discovery order determining whether certain documents were privileged), and the parties then voluntarily terminate the litigation.” Id. at n.10. In this situation, unlike the first, usually there is not “an appealable ‘final judgment or decree rendered by the highest court of a State in which a decision could be had’ under § 1257.” Id. at 24 (alterations omitted) (quoting
Lastly, there is a judgment when a state proceeding has “finally resolved all the federal questions in the litigation,” even
The hypothetical claimed the ASARCO petitioners should have attacked the state court decision in “a new action in federal district court” rather than an appeal in the Supreme Court. Exxon, 544 U.S. at 287 n.2. The Court disagreed. It reasoned that it had exclusive appellate jurisdiction over the state court order under “exceptions to the finality requirement that were set out in Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975).” ASARCO, 490 U.S. at 612, 622–23; 16B Charles Alan Wright & Arthur R. Miller et al., Federal Practice and Procedure: Jurisdiction § 4010 (3d ed. Apr. 2019 update) (discussing the exceptions at length). Because the Court had
The First Circuit thus concluded that when a state court order is “final” under Cox, it is also final under Rooker-Feldman. See Federacion, 410 F.3d at 26–27. So under the practical finality approach, there is a “judgment” if the challenged order is final under Cox or the state case has ended. We adopt this approach and hold that Rooker-Feldman does not apply when state proceedings have neither ended nor led to orders reviewable by the United States Supreme Court.
B
New Jersey cites several not precedential opinions in which we have applied Rooker-Feldman broadly even after Exxon. See N.J. Br. 12 (citing Tauro v. Baer, 395 F. App‘x 875, 876–77 (3d Cir. 2010) (per curiam), and McKnight v. Baker, 244 F. App‘x 442, 444–45 (3d Cir. 2007)); see also, e.g., Mikhail v. Kahn, 572 F. App‘x 68, 70 n.2 (3d Cir. 2014) (per curiam) (interlocutory family court orders).
But those opinions contradict Exxon‘s language and Rooker-Feldman‘s rationale. Exxon demands that the doctrine occupy a “narrow ground” bounded by “ended” state proceedings like Rooker, Feldman, and ASARCO. 544 U.S. at 284–87 & n.2, 291. The mere “pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction.” Id. at 292 (quoting McClellan v. Carland, 217 U.S. 268, 282 (1910)). And that is because “the ‘exclusive jurisdiction’ notion underlying Rooker and Feldman” is distinct from doctrines like preclusion, “comity, abstention, and exhaustion.” Richard H. Fallon, Jr., John F. Manning, Daniel J. Meltzer & David L. Shapiro, Hart & Weschler‘s the Federal Courts and the Federal System 1410 (7th ed. 2015); see Lance v. Dennis, 546 U.S. 459, 466 (2006) (per curiam) (distinguishing preclusion); Exxon, 544 U.S. at 292 (distinguishing comity and abstention). That jurisdictional notion is, once again, that ”Rooker and Feldman exhibit the limited circumstances in which [the] Court‘s appellate jurisdiction over state-court judgments,
There is more evidence that our not precedential opinions took Rooker-Feldman too far. In two cases following Exxon, the Supreme Court again limited the doctrine.
At the same time, Exxon bars us from construing Rooker-Feldman too narrowly. Exxon stressed Rooker-Feldman may apply when “the losing party in state court file[s] suit in federal court after the state proceedings [have] ended.” 544 U.S. at 291 (emphasis added); accord Skinner, 562 U.S. at 531. The Court could have—but has not—said that an “ended” proceeding is simply one in which the Court has
Our holding thus ensures we do not review state court proceedings that have “ended,” even when the Supreme Court lacks jurisdiction. That satisfies Exxon. And it limits the interlocutory orders that count as “judgments” to those over which the Court has
Applying these principles, we hold that none of the interlocutory orders in Malhan‘s state case are “judgments.” For one, they are not “final judgments or decrees rendered by the [New Jersey Supreme Court].”
III
A
Having established that the District Court had jurisdiction over Malhan‘s federal claims, we consider whether the Court erred by abstaining from exercising that jurisdiction. To promote comity between the national and state governments, Younger requires federal courts to abstain from deciding cases that would interfere with certain ongoing state proceedings. See Sprint Commc‘ns, Inc. v. Jacobs, 571 U.S. 69, 77–78 (2013); Younger, 401 U.S. 37.
In deciding to abstain, the District Court considered three factors announced by the Supreme Court in Middlesex County Ethics Committee v. Garden State Bar Association, 457 U.S. 423 (1982): whether “(1) there are ongoing state proceedings that are judicial in nature; (2) the state proceedings implicate important state interests; and (3) the state proceedings afford an adequate opportunity to raise federal claims.” Malhan, 2018 WL 2427121, at *6 (quoting Schall v. Joyce, 885 F.2d 101, 106 (3d Cir. 1989)).
But much has transpired since Middlesex was decided almost forty years ago. In Sprint, the Supreme Court underscored that Younger abstention conflicts with federal courts’ “virtually unflagging” obligation to exercise their jurisdiction. 571 U.S. at 77 (quoting Colorado River, 424 U.S. at 817). And just as Exxon and its progeny limited Rooker-Feldman‘s scope, Sprint narrowed Younger‘s domain. The Court explained—and we have stressed several times since—that the “three Middlesex conditions” are no longer the test for Younger abstention. Sprint, 571 U.S. at 81; e.g., Hamilton v. Bromley, 862 F.3d 329, 337 (3d Cir. 2017).
Instead, Younger applies to only “three exceptional categories” of proceedings: (1) “ongoing state criminal prosecutions“; (2) “certain ‘civil enforcement proceedings‘“; and (3) “pending ‘civil proceedings involving certain orders uniquely in furtherance of the state courts’ ability to perform their judicial functions.‘” Sprint, 571 U.S. at 78–79 (alteration omitted) (quoting New Orleans Pub. Serv., Inc. v. Council of City of New Orleans (NOPSI), 491 U.S. 350, 368 (1989)). Only after a court finds that a proceeding fits one of those descriptions should it consider Middlesex‘s “additional factors.”4 Id. at 81-82. Otherwise, “[d]ivorced from their quasi-criminal context, the three Middlesex conditions would extend Younger to virtually all parallel state and federal proceedings.” Id. at 81. So we must ask whether Counts 2, 5, and 6 challenge “exceptional” proceedings under Sprint.5
B
Sprint‘s first two categories do not apply here. None of Malhan‘s counts involve
So we ask whether Counts 2, 5, or 6 “involv[e] certain orders uniquely in furtherance of the state courts’ ability to perform their judicial functions.” Sprint, 571 U.S. at 78 (alteration omitted) (quoting NOPSI, 491 U.S. at 368). Orders of that type are very much “unique[ ].” See id. at 79 (citing only Pennzoil Co. v. Texaco Inc., 481 U.S. 1, 13 (1987) (bond pending appeal) and Juidice v. Vail, 430 U.S. 327, 336 & n.12 (1977) (civil contempt order)).
Count 2 involves the administrative collection of non-final money judgments. See App. 42–49. It does not challenge how a court protects the status quo pending appeal as in Pennzoil, where the bond money was collateral in lieu of immediate execution. Nor does it challenge a process, such as civil contempt, that is separate from the merits and that ends when the defendant complies. In fact, Count 2 does not challenge any judicial order at all. It challenges “executive action[s]” (bank levies) that have a layer of family court review—which means abstention is “plainly inappropriate under NOPSI.” ACRA Turf Club, 748 F.3d at 141 n.12; see NOPSI, 491 U.S. at 368–70. In short, Count 2‘s agency actions further family court enforcement—but not uniquely so. They are only a tool for collecting non-final money judgments in disputes between private parties.
Count 5 perhaps attacks judicial orders, or at least the debt that has resulted from them. See App. 53–54. But those orders (or that debt) are not “uniquely in furtherance” of judicial functions. They are rather like the money judgments themselves in Pennzoil and Juidice. See Pennzoil, 481 U.S. at 6; Juidice, 430 U.S. at 329–30. They do not ensure that family courts can perform their functions—they are merely the output of those functions. Cf., e.g., Boerschig v. Trans-Pecos Pipeline, LLC, 872 F.3d 701, 703–04, 705 n.2 (5th Cir. 2017) (declining to abstain from review of eminent domain proceedings).
As for Count 6, we need not decide whether family court garnishment orders are “unique[ ].” Sprint, 571 U.S. at 78 (quoting NOPSI, 491 U.S. at 368).6 That Malhan‘s
This rule limits Younger even in criminal cases. In Wooley v. Maynard, for example, New Hampshire had thrice prosecuted and convicted Maynard for obscuring the state‘s motto (“Live Free or Die“) on his license plates. See 430 U.S. 705, 707–08 (1977). After his third conviction but before another prosecution, Maynard and his wife sought and received a federal injunction against future prosecutions for the same offense. See id. at 709. On Supreme Court review, the state argued Younger applied. See id. at 710–11. The Court disagreed. It reasoned that the Maynards faced “a genuine threat of prosecution,” and that their suit was “in no way ‘designed to annul the results of a state trial.‘” Id. at 710–11 (quoting Huffman, 420 U.S. at 609). “[T]he relief sought [was] wholly prospective.” Id. at 711; see also Steffel v. Thompson, 415 U.S. 452, 462 (1974) (allowing declaratory relief because “[w]hen no state proceeding is pending... considerations of equity, comity, and federalism have little vitality“).
In civil cases, the “pending” requirement naturally has at least equal force. Bearing this out are the Court‘s only two examples of “pending ‘civil proceedings involving certain [unique] orders.‘” Sprint, 571 U.S. at 78 (quoting NOPSI, 491 U.S. at 368). In Juidice v. Vail, the Court required abstention. 430 U.S. at 338. But it did so only because the state courts had issued contempt orders “at the time [the federal] lawsuit was commenced.” Id. at 331–32. So “unlike ... the plaintiff in Steffel v. Thompson,” the Juidice plaintiffs faced “a pending, and not merely a threatened, proceeding.” Id. at 333.
Similarly, in Pennzoil v. Texaco, a Texas jury returned a multi-billion-dollar verdict against Texaco. See 481 U.S. at 4. Just hours before the state court entered judgment, Texaco sued in federal district court, claiming for the first time that the state proceedings had violated federal law. See id. at 6 & n.5. Texaco asked the court to enjoin both the judgment itself and the state‘s requirement that the firm post a cash bond before appeal. See id. at 6–7. But at that point, the district court faced a state jury verdict and the impending entry of a state court judgment. So whether the judgment or verdict “initiated” the state bond proceedings, the court had little or no time to precede them with its own “proceedings of substance on the merits.” Midkiff, 467 U.S. at 238. Indeed, seven days
Malhan‘s proceedings are nothing like those in Juidice or Pennzoil. The family court vacated its garnishment order last year and has not issued another. See App. 72. No factfinder has returned a verdict. No judgment waits to be entered. So Malhan faces only threatened garnishment. And like the plaintiffs in Wooley and Steffel, he can seek “wholly prospective” relief. Wooley, 430 U.S. at 711. That relief, as pled in Count 6, is that the District Court:
- Declare under the Declaratory Judgment Act that garnishment of a custodial parent[‘]s wages is prohibited under CSEA [the Child Support Enforcement Amendments of 1984];
- [ ] Preliminarily and permanently enjoin State Defendants from garnishing Malhan‘s salary so long as he is a custodial parent; [and]
- In the alternative, grant declaratory and injunctive relief to Malhan that State Defendants may not garnish payments which are not “earnings” nor garnish payments above what is permitted by the Consumer Credit Protection Act and 45 CFR Section 303.100(e).
App. 63–64. On those terms, Malhan is not trying to “annul the results” of a past garnishment. Wooley, 430 U.S. at 711 (quoting Huffman, 420 U.S. at 609). So he may present Count 6 in District Court.7
* * *
The District Court had federal question jurisdiction and should have fulfilled its “virtually unflagging” obligation to exercise that jurisdiction. We will reverse its application of Rooker-Feldman and Younger to Counts 2, 5, and 6 and remand for proceedings on the merits. We will affirm the Court‘s dismissal of Counts 1, 3 and 4.