Source: https://casetext.com/case/noel-v-hall-3
Timestamp: 2019-02-18 08:34:32
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Matched Legal Cases: ['§ 9', '§ 2511', '§ 2511', '§ 133', '§ 873', '§ 1331', '§ 1257', '§ 9', '§ 9', '§ 25', '§ 25', '§ 1', '§ 1738', '§ 1738', '§ 1738', '§ 1738', '§ 1738', '§ 1738', '§ 1983', '§ 1738', '§ 3', '§ 4', '§ 2511', '§ 12', '§ 22', '§ 12', '§ 12']

Noel v. Hall, 341 F.3d 1148 | Casetext
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Noelv.Hall
United States Court of Appeals, Ninth CircuitSep 2, 2003
Manufactured Home Com. v. City of San Jose
…Rooker-Feldman jurisdiction claims are reviewed de novo. Noel v. Hall, 341 F.3d 1148, 1154 (9th Cir. 2003).…
…To determine whether the Rooker-Feldman bar is applicable, a district court first must determine whether the…
holding that Rooker-Feldman doctrine bars federal jurisdiction "when a plaintiff&apos;s suit in federal district court is at least in part a forbidden de facto appeal of a state court judgment, and an issue in that federal suit is &apos;inextricably intertwined&apos; with an issue resolved by the state court judicial decision from which the forbidden de facto appeal is taken"
holding that Rooker-Feldman doctrine applies "[i]f a federal plaintiff asserts as a legal wrong an allegedly erroneous decision by a state court, and seeks relief from a state court judgment based on that decision"
Summary of this case from Garcia v. Cnty. of San Diego
holding that Rooker-Feldman doctrine bars federal jurisdiction "when a plaintiff&apos;s suit in federal district court is at least in part a forbidden de facto appeal of a state court judgment, and an issue in that federal suit is &apos;inextricably inter-twined&apos; with an issue resolved by the state court judicial decision from which the forbidden de facto appeal is taken"
Summary of this case from Ward v. City of Barstow
Richard L. Grant, Portland, OR, for the plaintiff-appellant.
Bryan W. Dawson, West Linn, OR, for the defendants-appellees.
Before: REAVLEY, KOZINSKI and W. FLETCHER, Circuit Judges.
Hon. Thomas M. Reavley, Senior United States Circuit Judge for the Fifth Circuit, sitting by designation.
This unfortunate saga began in May 1995 when Eric Noel and Sandra Hall (née Johnson) agreed to buy, train, and sell Red Hot Prospect — a horse that was no such thing. Hall paid the purchase price of $750, and Noel agreed to train Red as a show jumper and to pay the expenses. Noel and Hall agreed that they would eventually sell Red and share equally in what they incorrectly imagined would be a substantial profit of $30,000 to $50,000.
In 1995, Sandra Hall's last name was Johnson. She changed her name in 1997 when she married Brian Hall. For ease of discussion, we refer to her as Sandra Hall (or simply Hall) throughout.
Noel's answer stated that an action asserting these claims was already pending in Skamania County Superior Court, and that that action had priority. He did not assert any counterclaims, even after his counterclaims were dismissed in the Skamania County suit. In August 1999, one year and three months after the counterclaims were dismissed in the Skamania County suit, the court granted summary judgment to Hall. It found that Noel had tape recorded Hall's telephone conversations without her permission in violation of Wash. Rev. Code § 9.73.030 and 18 U.S.C. § 2511, and awarded her $2500 in damages and $2866 in attorney's fees and costs.
Noel and the Halls finally arrived in federal district court in 1999, when Noel filed the present action against Sandra and Brian Hall, as well as three other defendants, in the District of Oregon. None of the prior state-court suits had resulted in a judgment greater than $5000, but Noel — perhaps inspired (or deluded) by the grandeur of the federal setting — upped the ante. He now sought $891,563.46 in compensatory damages and $1,500,000 in punitive damages. Noel made ten claims against the Halls: (1) violation of federal wiretap law, 28 U.S.C. § 2511; (2) violation of Oregon wiretap laws, Or.Rev.Stat. § 133.739; (3) loss of use of the mobile home; (4) damage to the mobile home; (5) damage to personal property; (6) intentional interference with contractual relations; (7) breach of fiduciary duty; (8) blackmail in violation of 18 U.S.C. § 873; (9) extortion; and (10) injurious falsehood.
The district court dismissed the partnership claim for want of subject matter jurisdiction under the Rooker-Feldman doctrine. It held that because Sandra Hall's fiduciary duties under the partnership were at issue in the pending action in Skamania County Superior Court, Rooker-Feldman barred it from exercising jurisdiction. The district court granted the Halls' motion for summary judgment on the nine wiretapping and mobile home claims based on claim preclusion. The court held that Noel should have asserted these claims as compulsory counterclaims under Washington Civil Rule 13(a) in earlier state actions, and that his failure to assert them in those actions meant that he was precluded from asserting them in the present suit. Noel brought an interlocutory appeal.
Noel's claims against the three other defendants remain pending in the district court. The Halls challenge our jurisdiction to hear this interlocutory appeal, arguing for the first time in their brief to us that the district court improperly certified the dismissal of Noel's claims as final under Rule 54(b). They claim that the district court did not make the specific findings setting forth the reasons for its order that we require for interlocutory appeals. See In re Lindsay, 59 F.3d 942, 951 (9th Cir. 1995); Morrison-Knudsen Co. v. Archer, 655 F.2d 962, 965 (9th Cir. 1981) (requiring specific findings). Even if timely, we would reject the Halls' challenge to our jurisdiction. The district court order stated, "[T]here is no just reason for delay in entry of judgment and [the court] expressly directs that final judgment be entered." In Alcan Aluminum Corp. v. Carlsberg Financial Corp., 689 F.2d 815 (9th Cir. 1982), we held that "lack of Morrison-Knudsen findings is not a jurisdictional defect." Id. at 817. We may hear an interlocutory appeal under Rule 54(b) if it will aid in the efficient resolution of the action. See id.; In re Lindsay, 59 F.3d at 951. Resolving at this time whether any of Noel's claims against the Halls may proceed will manifestly aid the efficient resolution of this action.
We review a jurisdictional dismissal under the Rooker-Feldman doctrine de novo. Canatella v. California, 304 F.3d 843, 849 (9th Cir. 2002). We review a grant of summary judgment de novo. Oliver v. Keller, 289 F.3d 623, 626 (9th Cir. 2002). We must determine, viewing the evidence in the light most favorable to the nonmoving party, whether any genuine issues of material fact exist and whether the district court correctly applied the relevant substantive law. Delta Sav. Bank v. United States, 265 F.3d 1017, 1021 (9th Cir. 2001).
The Rooker-Feldman doctrine takes its name from Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). Under Rooker-Feldman, a federal district court does not have subject matter jurisdiction to hear a direct appeal from the final judgment of a state court. The United States Supreme Court is the only federal court with jurisdiction to hear such an appeal. Rooker-Feldman is a statute-based doctrine, based on the structure and negative inferences of the relevant statutes rather than on any direct command of those statutes. See, e.g., In re Gruntz, 202 F.3d 1074, 1078 (9th Cir. 2000) (en banc) (" Rooker-Feldman is not a constitutional doctrine. Rather, the doctrine arises out of a pair of negative inferences drawn from two statutes: 28 U.S.C. § 1331 . . . and 28 U.S.C. § 1257. . . .").
The principle that federal trial courts should not hear appeals from the state courts was incorporated into the original Judiciary Act of 1789. Under §§ 9 and 11 of the Act, federal district courts were courts of original jurisdiction, sitting in admiralty, and federal circuit courts were courts of original jurisdiction, sitting in diversity. See An Act To Establish the Judicial Courts of the United States, ch. 20, §§ 9, 11, 1 Stat. 73, 76-77, 78 (1789). They had no appellate jurisdiction over appeals from decisions of the state courts. Only the Supreme Court had jurisdiction over direct appeals from state court decisions, conferred in § 25 of the Act. See id. § 25, 1 Stat. at 85-87.
With the exception of a short-lived statute passed at the end of the first Adams administration, the federal circuit courts were not given general federal question jurisdiction until 1875; when that jurisdiction was given, it, too, was original rather than appellate. See Act of Mar. 3, 1875, ch. 137, § 1, 18 Stat. 470, 470.
In its routine application, the Rooker-Feldman doctrine is exceedingly easy. A party disappointed by a decision of a state court may seek reversal of that decision by appealing to a higher state court. A party disappointed by a decision of the highest state court in which a decision may be had may seek reversal of that decision by appealing to the United States Supreme Court. In neither case may the disappointed party appeal to a federal district court, even if a federal question is present or if there is diversity of citizenship between the parties. Rooker-Feldman becomes difficult — and, in practical reality, only comes into play as a contested issue — when a disappointed party seeks to take not a formal direct appeal, but rather its de facto equivalent, to a federal district court.
In his federal suit, Feldman named the local court and its officers as defendants; sought a declaratory judgment that the local rule violated the Fifth Amendment; and sought an injunction that would require the defendants to admit him to the bar, to permit him to take the examination, or to determine whether his training and qualifications provided him the same competence as graduates of approved law schools. Feldman, 460 U.S. at 468-69 nn. 2-3, 103 S.Ct. 1303. The Supreme Court noted that the D.C. local court had acted both judicially and legislatively. In applying its rule to deny the individual petitions for waiver, it had acted judicially. Id. at 479, 103 S.Ct. 1303. In promulgating its rule, on the other hand, it had acted legislatively. Id. at 485-86, 103 S.Ct. 1303.
Feldman and Hickey had also sought relief based on the federal antitrust laws, but the Supreme Court denied certiorari as to their antitrust claims. See Feldman, 460 U.S. at 474 n. 11, 103 S.Ct. 1303.
The Supreme Court does not distinguish between the structures of Feldman and Hickey's federal suits or provide a detailed description of Hickey's suit.
Corresponding to these two kinds of actions, the Court divided its analysis into two parts. First, the Court held that part of the federal plaintiff's suit was a forbidden de facto appeal of the judicial decision of the D.C. local court. "[T]o the extent that Hickey and Feldman sought review in the District Court of the District of Columbia Court of Appeals' denials of their petitions for waiver, the District Court lacked subject matter jurisdiction over their complaints." Id. at 482, 103 S.Ct. 1303. The Court does not explain precisely why this part of the federal plaintiffs' suit is a forbidden appeal. We may infer its reason, however, from its having (1) told us that the decision of the D.C. local court in denying the petitions for waiver was a judicial act, and (2) described the structure of the federal suit ( i.e., naming the local court and its officials as defendants, alleging error by the local court, and seeking a remedy directly against the local court and its officers).
Second, the Court permitted the federal plaintiffs' challenge to the local court's legislative act of promulgating its rule regulating the bar examination. Id. at 487, 103 S.Ct. 1303. This was a challenge to the validity of the rule rather than a challenge to an application of the rule. The structure of the permitted challenge was the same as the structure of the forbidden de facto appeal (naming the local court and its officers as defendants, alleging error by the local court, and seeking a remedy directly against the local court and its officers). But because the federal plaintiffs were challenging a legislative rather than a judicial decision by the local court — and needed relief against that legislative act — it was appropriate that they structure this part of their suit in this way.
Based on this answer, the plaintiffs' Fifth Amendment challenge broke neatly into two parts. The plaintiffs' as-applied challenge was, in effect, a request that the district court decide an issue that was "inextricably intertwined" with a judicial decision of a local court. The local court had applied the rule to the plaintiffs over their objection that the application violated the Fifth Amendment. The plaintiffs now brought essentially the same challenge in the district court. On the other hand, the plaintiffs' facial challenge was not "inextricably intertwined" with the judicial decision of the local court. Instead, it was a general challenge to the constitutionality of the rule, unrelated to any particular application.
The premise for the operation of the "inextricably intertwined" test in Feldman is that the federal plaintiff is seeking to bring a forbidden de facto appeal. The federal suit is not a forbidden de facto appeal because it is "inextricably intertwined" with something. Rather, it is simply a forbidden de facto appeal. Only when there is already a forbidden de facto appeal in federal court does the "inextricably intertwined" test come into play: Once a federal plaintiff seeks to bring a forbidden de facto appeal, as in Feldman, that federal plaintiff may not seek to litigate an issue that is "inextricably intertwined" with the state court judicial decision from which the forbidden de facto appeal is brought. As Judge Ebel held in Facio v. Jones, 929 F.2d 541, 543 (10th Cir. 1991), a federal district court plaintiff was barred by Rooker-Feldman from seeking "to vacate and to set aside" a previously-entered state court judgment because his federal suit was a forbidden de facto appeal. The federal plaintiff was also forbidden to seek a declaratory judgment invalidating the state court rule on which the state court decision relied, for the plaintiff's "request for declaratory relief [was] inextricably intertwined with his request to vacate and to set aside the [state court] judgment." Id.
Facio sought declaratory relief that the state court rule as applied to reach a decision in his case was unconstitutional. Facio, 929 F.2d at 543.
As a practical matter, the "inextricably intertwined" test of Feldman is likely to apply primarily in cases in which the state court both promulgates and applies the rule at issue — that is, to the category of cases in which the local court has acted in both legislative and a judicial capacity — and in which the loser in state court later challenges in federal court both the rule and its application. Cases involving bar admission rules, such as Feldman itself, fall in this category. See, e.g., Tofano v. Supreme Court of Nevada, 718 F.2d 313 (9th Cir. 1983) (involving a Nevada rule establishing a passing grade on the state bar examination). Cases involving litigation and attorney disciplinary rules also fall into this category. See, e.g., Partington v. Gedan, 961 F.2d 852 (9th Cir. 1992) (involving a litigation rule).
The Supreme Court has never, outside of Rooker and Feldman themselves, employed the doctrine to hold that a federal district court is without subject matter jurisdiction. The Court has barely discussed the doctrine since its decision in Feldman, although in three later cases it has held that the doctrine does not apply. In Verizon Maryland Inc. v. Public Service Commission, 535 U.S. 635, 644 n. 3, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002), it held that Rooker-Feldman does not apply to a suit in which review is sought in federal district court of "executive action, including determinations made by a state administrative agency." In Johnson v. De Grandy, 512 U.S. 997, 1006, 114 S.Ct. 2647, 129 L.Ed.2d 775 (1994), it held that Rooker-Feldman does not apply to a federal court suit brought by a non-party to the state court suit. And in Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 107 S.Ct. 1519, 95 L.Ed.2d 1 (1987), it did not dismiss for lack of subject matter jurisdiction, but rather abstained under Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). See also Pennzoil, 481 U.S. at 18, 107 S.Ct. 1519 (Scalia, J., concurring) ("I do not believe that the so-called Rooker-Feldman doctrine deprives the Court of jurisdiction. . . .").
The rule that permits simultaneous litigation in state and federal court of overlapping and even identical cases is deeply rooted in our system. As the Court wrote in Atlantic Coast Line Railroad v. Brotherhood of Locomotive Engineers, 398 U.S. 281, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970): "[T]he state and federal courts had concurrent jurisdiction in this case, and neither court was free to prevent either party from simultaneously pursuing claims in both courts." Id. at 295, 90 S.Ct. 1739 (citing Kline v. Burke Constr. Co., 260 U.S. 226, 43 S.Ct. 79, 67 L.Ed. 226 (1922)). The Court has recognized that this rule can produce "inefficient simultaneous litigation in state and federal courts on the same issue. . . . But this is one of the costs of our dual court system. . . ." Parsons Steel, Inc. v. First Ala. Bank, 474 U.S. 518, 524-25, 106 S.Ct. 768, 88 L.Ed.2d 877 (1986); see also Doran v. Salem Inn, Inc., 422 U.S. 922, 928, 95 S.Ct. 2561, 45 L.Ed.2d 648 (1975) ("[T]he very existence of one system of federal courts and 50 systems of state courts, all charged with the responsibility for interpreting the United States Constitution, suggests that on occasion there will be duplicating and overlapping adjudication of cases which are sufficiently similar in content, time, and location to justify being heard before a single judge had they arisen within a unitary system."); Green v. City of Tucson, 255 F.3d 1086, 1097-98 (9th Cir. 2001) (en banc) (holding that parallel state and federal litigation is inherent in our legal system, and that "the possibility of duplicative litigation is a price of federalism").
The rule of interjurisdictional preclusion embodied in 28 U.S.C. § 1738, the Full Faith and Credit Act, is equally deeply rooted. The Act was first passed in 1790, a year after the first Judiciary Act, see Act of May 26, 1790, ch. 11, 1 Stat. 122, and has not been significantly changed since its original enactment. Section 1738 tells a federal court what to do when there has been parallel litigation in state and federal court (as permitted under the first rule), and the state court suit has gone to judgment before the federal suit. It provides that the state "judicial proceedings . . . shall have the same full faith and credit in every court within the United States . . . as they have by law or usage in the courts of such State . . . from which they are taken." As repeatedly construed by the Supreme Court, in decisions both before and after Feldman, § 1738 requires a federal district court to give the same — not more and not less — preclusive effect to a state court judgment as that judgment would have in the state courts of the state in which it was rendered. As the Court wrote in Kremer v. Chemical Construction Corp., 456 U.S. 461, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982): "Section 1738 requires federal courts to give the same preclusive effect to state court judgments that those judgments would be given in the courts of the State from which the judgments emerged." Id. at 466, 102 S.Ct. 1883 (emphasis added); see also Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 369, 116 S.Ct. 873, 134 L.Ed.2d 6 (1996) ("Absent a partial repeal of the Full Faith and Credit Act, 28 U.S.C. § 1738, by another federal statute, a federal court must give the judgment the same effect that it would have in the courts of the State in which it was rendered." (emphasis added)); Parsons Steel, 474 U.S. at 523, 106 S.Ct. 768 ("[U]nder the Full Faith and Credit Act a federal court must give the same preclusive effect to a state-court judgment as another court of that State would give." (emphasis added)); Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 82-85, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984) (same); Allen v. McCurry, 449 U.S. 90, 96, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980) (same).
We have never in this circuit applied the Rooker-Feldman doctrine so broadly as to conflict with either the rule permitting parallel state and federal litigation or the rule of § 1738 requiring federal courts to follow state preclusion rules. In seven cases in this circuit, we have held that Rooker-Feldman barred forbidden de facto appeals from state court decisions. To the extent there is a lead case, it is Worldwide Church of God v. McNair, 805 F.2d 888 (9th Cir. 1986), in which disappointed state court defendants brought suit in federal district court. They named as a federal defendant the state superior court, alleged as a legal wrong that the state court jury verdict was unconstitutional, and sought an injunction against the enforcement of the state court judgment based on the verdict. We held that the federal suit was barred by Rooker-Feldman. To the extent the federal plaintiffs sought to bring a direct challenge to the correctness of the decision of the state court, this was a forbidden de facto appeal. To the extent they sought in the same suit to bring a more general constitutional challenge, that challenge was "inextricably intertwined" with (to the degree that it could be separated at all from) the forbidden direct appeal. Id. at 892-93.
In Bianchi v. Rylaarsdam, 334 F.3d 895 (9th Cir. 2003), Bianchi had lost an appeal in front of a three-judge panel of the California Court of Appeal. He then brought a motion in that court alleging that his federal and state constitutional rights to due process had been violated because a justice whom Bianchi had disqualified when he was a judge on the California Superior Court, and who had subsequently been elevated to the Court of Appeal, sat on the appellate panel. The Court of Appeal denied the motion, and the California Supreme Court denied a Writ of Mandate asserting the same constitutional claims. Id. at 897. Bianchi then filed suit in federal district court against the three appellate justices who had decided his appeal claiming that his federal due process right had been violated and seeking to have the appellate court's opinion vacated and the case reassigned to a different panel. We held that the district court lacked jurisdiction because "Bianchi essentially asked the federal court to review the `state court's denial in a judicial proceeding'" of his constitutional claim. Id. at 898 (quoting Feldman, 460 U.S. at 483 n. 16, 103 S.Ct. 1303).
In Olson Farms v. Barbosa, 134 F.3d 933 (9th Cir. 1998), the California Agricultural Labor Relations Board ("ALRB") had held that Olson Farms ("Olson") was subject to its jurisdiction, and then held that Olson had failed to bargain in good faith with its employees. Olson sought review of that decision in the California Supreme Court, which denied review. In a separate case, the ALRB made the same jurisdictional determination for the same period. Olson appealed that decision to the California Court of Appeal, which affirmed. Olson filed suit in federal district court against the members of the ALRB, asserting as a legal wrong the allegedly incorrect jurisdictional determinations of the ALRB and the state courts. Relying on Worldwide Church of God, we held that Olson "sought to have the district court . . . review the past jurisdictional decisions of the ALRB and the state courts," and that this was a forbidden de facto direct appeal. Id. at 936.
In Partington v. Gedan, 961 F.2d 852 (9th Cir. 1992), the Hawaii Supreme Court found that Partington had violated a state court rule and assessed a $50 fine, payable to the discretionary fund of the dean of the Hawaii Law School. Partington then brought suit in federal district court. He named as defendants the justices of the state supreme court, alleged "that the Hawaii Supreme Court justices and the dean of the law school had violated several of his constitutional rights by levying and collecting the fine," and sought a return of the $50. Id. at 857. Relying on Feldman, we wrote that Partington "asked the district court to review a specific state court decision interpreting a state court rule," and held that the district court had no subject matter jurisdiction under Rooker-Feldman. Id. at 865.
In Allah v. Superior Court, 871 F.2d 887 (9th Cir. 1989), the Los Angeles Superior Court had dismissed Allah's suit for failure to comply with a discovery order. Allah then brought a pro se suit in federal district court, alleging that the dismissal by the state court violated his constitutional rights. We held that this was a forbidden de facto appeal under Rooker-Feldman: "To the extent that Allah requested the district court to conduct a direct review of the state court's judgment and to scrutinize the state court's application of various rules and procedures pertaining to his case, the district court lacked subject matter jurisdiction over his complaint." Id. at 891.
In MacKay v. Pfeil, 827 F.2d 540 (9th Cir. 1987), the Alaska Superior Court had entered judgment against MacKay for his deceased ex-wife's expenses in enforcing a custody decree. The state court later entered a default judgment against MacKay in an action to enforce the earlier judgment. MacKay appealed neither judgment within the state court system, but instead filed suit in federal district court. He alleged that the state court had erred in finding that it had personal jurisdiction over him and in holding that the damage award was consistent with the consent decree. He sought from the district court "`a declaration that the Purported Judgment is void,'" and "`orders restraining and enjoining the Defendants from seeking to enforce the Purported Judgment.'" Id. at 543 (internal quotation marks omitted). We held the federal suit barred under Rooker-Feldman.
Finally, in Tofano v. Supreme Court of Nevada, 718 F.2d 313 (9th Cir. 1983), the Nevada Supreme Court had denied Tofano admission to the state bar because of his low score on the Nevada Bar Examination. Tofano filed suit against the state supreme court in federal district court, specifically challenging the decision in his own individual case and generally challenging the procedures used to grade the examination. We held that Tofano's challenge to the denial of admission by the court in his individual case was barred as a forbidden de facto direct appeal under Feldman. However, we upheld the district court's jurisdiction over the general challenge to the grading procedures, holding that this challenge did "not require review of [the] final state court judgment in[his] particular case." Id. at 314 (quoting Feldman, 460 U.S. at 486, 103 S.Ct. 1303).
It is commonplace for the lower federal courts to complain that the Rooker-Feldman doctrine is difficult to apply. See, e.g., Brokaw v. Weaver, 305 F.3d 660, 664-65 (7th Cir. 2002) (complaining of the difficulty); Gottfried v. Med. Planning Servs., Inc., 142 F.3d 326, 330 (6th Cir. 1998) (" Rooker-Feldman stands for the simple (yet nonetheless confusing) proposition that lower federal courts do not have jurisdiction to review a case litigated and decided in state court. . . ."); Bates v. Jones, 131 F.3d 843, 863 (9th Cir. 1997) ("It is difficult to articulate a general rule for identifying the circumstances under which the applicability of Rooker-Feldman and of res judicata are not essentially coextensive. This may be what inspired a leading commentator in the field of Civil Procedure to describe the Rooker-Feldman doctrine as `some-what peculiar.'"); Harris v. N.Y. State Dep't of Health, 202 F.Supp.2d 143, 159 n. 2 (S.D.N.Y. 2002) ("[C]onfusion continues in the federal courts on the relation between preclusion and the Rooker-Feldman doctrine." (internal quotation marks omitted)); Zealy v. City of Waukesha, 153 F.Supp.2d 970, 980 (E.D.Wis. 2001) ("[T]he distinction between Rooker-Feldman and claim preclusion is difficult to draw.").
Of the formulations in the other circuits, we find most notable (and most useful) the similar formulation of the Seventh Circuit, first articulated at some length by Judge Easterbrook in GASH Associates v. Village of Rosemont, 995 F.2d 726, 728-29 (7th Cir. 1993):
[B]oth [ Rooker-Feldman and preclusion] define the respect one court owes to an earlier judgment. But the two are not coextensive. Preclusion in federal litigation following a judgment in state court depends on the Full Faith and Credit Statute, 28 U.S.C. § 1738, which requires the federal court to give the judgment the same effect as the rendering state would. . . . The Rooker-Feldman doctrine, by contrast, has nothing to do with § 1738. It rests on the principle that district courts have only original jurisdiction. . . . The Rooker-Feldman doctrine asks: is the federal plaintiff seeking to set aside a state judgment, or does he present some independent claim, albeit one that denies a legal conclusion that a state court has reached in a case to which he was a party? If the former, then the district court lacks jurisdiction; if the latter, then there is jurisdiction and state law determines whether the defendant prevails under principles of preclusion.
. . . To put this differently, the injury of which GASH complains was caused by the judgment, just as in Rooker, Feldman, and Ritter [ v. Ross, 992 F.2d 750 (7th Cir. 1993)]. GASH did not suffer an injury out of court and then fail to get relief from state court; its injury came from the [state court] judgment. . . .
The GASH formulation has been repeated, with slight variations, many times in the Seventh Circuit. See, e.g., Garry v. Geils, 82 F.3d 1362, 1366-67 (7th Cir. 1996) ("[T]he distinction between a federal claim alleging injury caused by a state court judgment (necessarily raising the Rooker-Feldman doctrine) and a federal claim alleging a prior injury that a state court failed to remedy (raising a potential res judicata problem but not a Rooker-Feldman problem) has been recognized in this circuit at least since our decision in GASH." (emphasis in original)); Jensen v. Foley, 295 F.3d 745, 747-48 (7th Cir. 2002) ("The Rooker-Feldman doctrine, generally speaking, bars a plaintiff from bringing a § 1983 suit to remedy an injury inflicted by the state court's decision. . . . Preclusion, on the other hand, applies when a federal plaintiff complains of an injury that was not caused by the state court, but which the state court has previously failed to rectify." (emphasis in original)); see also Lewis v. Anderson, 308 F.3d 768, 772 (7th Cir. 2002) (same); Durgins v. City of E. St. Louis, 272 F.3d 841, 844 (7th Cir. 2001) (same); Rizzo v. Sheahan, 266 F.3d 705, 714 (7th Cir. 2001) (same); Centres, Inc. v. Town of Brookfield, 148 F.3d 699, 702 (7th Cir. 1998) (same); Young v. Murphy, 90 F.3d 1225, 1231 (7th Cir. 1996) (same).
III. Claims Dismissed as Claim-Precluded A. Inapplicability of Rooker-Feldman
Under 28 U.S.C. § 1738, federal courts must give "full faith and credit" to judgments of state courts. Section 1738 does not allow federal courts to employ their own preclusion rules in determining the preclusive effect of state judgments. "Rather, it . . . commands a federal court to accept the rules chosen by the State from which the judgment is taken." Kremer v. Chem. Constr. Corp., 456 U.S. 461, 482, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982); accord Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 373, 116 S.Ct. 873, 134 L.Ed.2d 6 (1996). Thus, we apply Washington law to determine the claim-preclusive effects of the earlier rounds of state-court litigation between Noel and the Halls.
1. Wiretapping Claims a. Jurisdiction
Under Washington law, when a court lacks jurisdiction over the subject matter of a counterclaim, it cannot hear and determine the issues raised in the claim. Thus, the failure to assert a counterclaim under such circumstances does not act as a bar to a subsequent action in a proper forum. See Centennial Flouring Mills Co. v. Schneider, 16 Wash.2d 159, 132 P.2d 995, 998 (1943); 3A Lewis H. Orland Karl B. Teglund, Washington Practice 303 (4th ed. 1992). Noel argues that his wiretapping claims were not compulsory counterclaims because the damages he sought exceeded the Clark County District Court's statutory limit, and therefore it lacked jurisdiction to hear his claims. We disagree.
Noel's current wiretapping claims far exceed the $35,000 jurisdictional limit of the Clark County District Court. However, the Washington Rules for Courts of Limited Jurisdiction ("CRLJ") provide a remedy for this problem. CRLJ 14A provides:
At the time, the jurisdictional limit for civil suits in district court in Washington was $35,000. This limit has subsequently been raised to $50,000. See Wash. Rev. Code § 3.66.020.
CRLJ 14A(b); see 4B Karl B. Teglund, Washington Practice 317 (6th ed. 2002) (noting that CRLJ 14A was enacted to avoid splitting causes of action). Because Washington procedural rules would have required the district court to remove the case to superior court, we find no merit in Noel's jurisdictional argument. See J J Drilling, Inc. v. Miller, 78 Wash.App. 683, 898 P.2d 364, 367 (1995).
Compulsory Counterclaims: A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. But the pleader need not state the claim if (1) at the time the action was commenced the claim was the subject of another pending action. . . .
CR 13(a); CRLJ 13(a). "If a party does not assert a compulsory counterclaim, that party is barred from asserting that claim as an independent claim or as a counterclaim in any other action." Krikava v. Webber, 43 Wash.App. 217, 716 P.2d 916, 918 (1986). The Washington Supreme Court has adopted "[a] liberal and broad construction of Rule 13(a)" to "avoid a multiplicity of suits." Schoeman v. N.Y. Life Ins. Co., 106 Wash.2d 855, 726 P.2d 1, 5 (1986).
The relevant portions of Washington Civil Rule 13, Washington Civil Rule for Courts of Limited Jurisdiction 13, and Federal Rule 13 are identical. See CR 13; CRLJ 13; Fed.R.Civ.P. 13. A small claims court in Washington is a department of the district court, which is a court of limited jurisdiction. See Wash. Rev. Code 12.40 (governing small claims court).
"[C]ourts should give the phrase `transaction or occurrence that is the subject matter' of the suit a broad realistic interpretation in the interest of avoiding a multiplicity of suits. . . . [A]ny claim that is logically related to another claim that is being sued on is properly the basis for a compulsory counterclaim."
Id. at 6 (quoting Rosenthal v. Fowler, 12 F.R.D. 388, 391 (S.D.N.Y. 1952)) (first alteration in original). All nine of Noel's claims dismissed by the district court on summary judgment arose from events surrounding the same horse, same mobile home, and same tape recordings as those in the state-court suits.
Noel asserts that his wiretapping claims are not unasserted compulsory counterclaims under Rule 13(a) because they involve three additional parties — Gabrielle Lennartz, Michelle Merchant, and Herb Weisser — over whom the Washington courts could not have acquired jurisdiction. Noel alleges that Lennartz, Merchant, and Weisser conspired with the Halls to use the tape-recorded conversations removed from the mobile home against him in various ways. Noel argues that he could not have asserted counterclaims against these three defendants in the Clark County District Court suit concerning the wiretapping violations because that court could not have asserted personal jurisdiction over them.
Moreover, we do not agree with Noel's assertion that Washington State courts would not have been able to acquire personal jurisdiction over Lennartz, Merchant, and Weisser. Under Washington law, "the following factors must coincide" for there to be personal jurisdiction over a nonresident defendant: "(1) The nonresident defendant . . . must purposefully do some act or consummate some transaction in the forum state; (2) the cause of action must arise from, or be connected with, such act or transaction; and (3) the assumption of jurisdiction . . . must not offend traditional notions of fair play and substantial justice." Shute v. Carnival Cruise Lines, 113 Wash.2d 763, 783 P.2d 78, 80 (1989) (internal quotation marks omitted); see Wash. Rev. Code § 4.28.185. Noel accuses Lennartz, Merchant, and Weisser of conspiring to use the tapes removed from the mobile home to injure him and his business. Based on these actions, Washington courts could have asserted personal jurisdiction over them under Washington law. These actions also satisfy the minimum contacts requirement of the federal Due Process Clause. See Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945).
Washington's Rule 13(a) excuses a defendant from asserting an otherwise compulsory counterclaim if "at the time the action was commenced the claim was the subject of another pending action." Noel argues that his wiretapping claims are not barred as unasserted compulsory counterclaims because on January 29, 1998, when Sandra Hall filed her complaint against Noel in Clark County District Court for privacy and wiretap violations, Noel had pending in superior court in Skamania County a claim relating to the tape-recorded conversations under the federal wiretapping statute, 18 U.S.C. §§ 2511- 2520. On May 28, 1998, however, four months after Hall filed her complaint in the Clark County District Court, the Skamania court, following Hall's unopposed motion for voluntary dismissal, dismissed both Hall and Noel's wiretapping claims. The court explained that another action was pending in Clark County District Court and "Clark County would be a forum more convenient to the parties."
We have found no Washington authority interpreting the pending claim exception to Rule 13(a). The purpose of the exception, however, is to prevent Party A from forcing Party B, who has a pending claim against Party A in another forum, into a forum of Party A's choosing. See Union Paving Co. v. Downer Corp., 276 F.2d 468, 470 (9th Cir. 1960) (interpreting the analogous federal Rule 13(a)). Here, the Skamania County Superior Court dismissed the pending claims specifically to allow the parties to litigate all the wiretapping claims in the Clark County District Court. Noel neither opposed the motion to dismiss, nor argues to us that he could not have asserted his wiretapping claims in the Clark County suit after they were dismissed from the Skamania County suit. We therefore conclude that Noel's failure to amend his pleadings in the Clark County suit does not now allow him to escape the characterization of his unasserted claims in that court as compulsory.
Brian Hall, however, was not a plaintiff — and thus not an opposing party — in Sandra Hall's Clark County suit. Therefore, Noel's wiretapping claims against him were not compulsory counterclaims in that suit. The Washington courts have adopted a strict reading of Rule 13(a)'s requirement that a pleader must bring compulsory counterclaims against "any opposing party." In Nancy's Product, Inc. v. Fred Meyer, Inc., 61 Wash.App. 645, 811 P.2d 250 (1991), the Washington appeals court held:
The district court also dismissed Noel's mobile home claims as unasserted compulsory counterclaims under Washington Rule 13(a). Rule 13(a), however, does not apply in Washington small claims court. Washington Civil Rule for Courts of Limited Jurisdiction 81(a) provides that Washington's Civil Rules do not apply in small claims court. CRLJ 81(a) ("These rules do not apply to proceedings in small claims court."); cf. Last Chance Riding Stable, Inc. v. Stephens, 66 Wash.App. 710, 832 P.2d 1353 (1992) (holding that CRLJ 81(a) prevents CRLJ 73(b), governing the timing of appeals, from applying in small claims court). Therefore, Noel's mobile home claims cannot be precluded as unasserted compulsory counterclaims by the operation of Washington Rule 13(a) in the Halls' small claims suit.
The Halls' small claims suit did go up on appeal to the Clark County Superior Court where Washington Civil Rule 13(a) does apply. But as we read Washington law, claims which need not be asserted in small claims court do not become compulsory on appeal. Wash. Rev. Code § 12.36.055 (1997) (superceded) (discussing appeals from small claims court and noting that the superior court should conduct a de novo trial as "nearly as possible in the manner of the original small claims trial" and barring new pleading without the written permission of the superior court).
Under Washington law, claim preclusion operates with respect to both claims that were litigated and claims that should have been litigated in a prior action. Meder v. CCME Corp., 7 Wash.App. 801, 502 P.2d 1252, 1254 (1972); Restatement (Second) of Judgments § 22(2) (1982) (stating that the failure to bring a counterclaim will preclude a later action on that claim either if the jurisdiction has a rule so saying or if a successful prosecution of the later action would impinge upon the earlier judgment). But a party is not claim-precluded from bringing a claim "which could not have been . . . litigated during [a] prior action." Meder, 502 P.2d at 1254. If a counterclaim cannot properly be pleaded in a suit because the amount of the counterclaim is beyond the jurisdiction of the state court, a judgment in that suit will not preclude a defendant from bringing a separate action. See Centennial Flouring Mills Co. v. Schneider, 16 Wash.2d 159, 132 P.2d 995, 998 (1943); 3A Lewis H. Orland Karl B. Teglund, Washington Practice 303 (4th ed. 1992).
Noel currently seeks damages for his mobile home claims far in excess of the $2500 jurisdictional limit of the small claims court where the Halls' earlier mobile home-related suits were filed. The Halls argue that Washington law provides a method for Noel to have asserted his counterclaims exceeding the jurisdictional limit of the small claims court simultaneously in superior court (which has no monetary jurisdictional limit), and that because Noel failed to take advantage of this channel his mobile home claims are claim-precluded.
The jurisdictional limit in the small claims department of the Washington district court was, at the time, $2500. It has since been raised to $4000. See Wash. Rev. Code § 12.40.010.
CRLJ 14A, which provides for the automatic removal of cases to the superior court when a counterclaim exceeds the jurisdictional limit of the district court, and which rendered Noel's jurisdictional argument regarding his wiretapping claims unavailing, does not apply in small claims court. See CRLJ 81(a).
Wash. Rev. Code § 12.40.027 provides:
[C]ounterclaims . . . by a defendant . . . in excess of the jurisdiction of small claims court may be maintained simultaneously in superior court as a separate action brought by such defendant. . . . Such a superior court action does not affect the jurisdiction of the small claims court to hear the original small claims case. The decision of the small claims court shall have no preclusive effect on the superior court action brought pursuant to this section.