Opinion ID: 33209
Heading Depth: 2
Heading Rank: 1

Heading: Rooker-Feldman and Preclusion

Text: 14 Although we believe that the Trustee's claim fails for other reasons, we begin by briefly assessing Erlewine's Rooker-Feldman argument, since it implicates our jurisdiction. The doctrine, named after two Supreme Court cases, 2 holds that the inferior federal courts lack jurisdiction to exercise appellate review over state court decisions. See Reitnauer v. Tex. Exotic Feline Found., Inc. (In re Reitnauer), 152 F.3d 341, 343 (5th Cir.1998) (describing the doctrine). Plainly, the Trustee's avoidance action does not seek appellate review of the state divorce proceeding in a literal sense. Nonetheless, the doctrine is potentially applicable whenever the state and federal proceedings would be inextricably intertwined. See Davis v. Bayless, 70 F.3d 367, 375-76 (5th Cir.1995). 15 While courts have often had difficulty deciding whether a state adjudication and a later federal action are so intertwined that the latter would amount to a review of the former, 3 the answer in this case is relatively clear. Even if it could be said that the Trustee's avoidance action seeks review of the state divorce decree — which seems doubtful, given that the two proceedings address rather different issues — our cases have indicated that the Rooker-Feldman bar generally should not extend to state decisions that would not be given preclusive effect under doctrines of res judicata and collateral estoppel. See Am. Airlines, Inc. v. Dep't of Transp., 202 F.3d 788, 801 & n. 9 (5th Cir.2000). In this particular case, as explained below, the divorce decree is not entitled to preclusive effect because the Trustee was not a party to the state court divorce proceedings, nor was he in privity with any party. For the same reason, the Rooker-Feldman doctrine is inapplicable. See Johnson v. De Grandy, 512 U.S. 997, 1006 (1994) (refusing to apply the Rooker-Feldman doctrine against a litigant who was not a party to the prior state action). 4 16 The Trustee's challenge to the divorce decree is not barred by the traditional preclusion doctrines of res judicata or collateral estoppel. The federal full faith and credit statute requires us to give state court judgments the same preclusive effect that they would enjoy in the courts of the rendering state. See 28 U.S.C. § 1738 (2000); Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 380 (1985). Under Texas law, the preclusion doctrines of res judicata and collateral estoppel apply only against a litigant who was a party to, or who is in privity with a party to, the original suit. See Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996); Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816, 819 (Tex. 1984). 5 The Trustee was not a party to the divorce action. Nor can the Trustee be considered the Debtor's privy, for two parties are said to be in privity when they share an identity of interests in the basic legal right that is the subject of litigation. Amstadt, 919 S.W.2d at 653. The interests of the Debtor in the divorce proceeding and of the Trustee in the instant case are, however, quite distinct. As we observed in Coleman v. Alcock, another case involving a bankruptcy trustee's attempt to avoid a transfer, 17 [W]e are of the view that the Trustee is not bound, either on res judicata or judicial collateral estoppel, by the prior state court proceedings. The Trustee is, of course, a successor of the Bankrupt for many purposes. But he is much more both in the extraordinary rights with which the Bankruptcy Act invests him, and as a general representative of the creditors. 18 272 F.2d 618, 621-22 (5th Cir.1959) (emphasis added). 6 As the interests of the Debtor's creditors were not represented in the divorce action, preclusion doctrines do not bar the Trustee from vindicating the creditors' interests in this subsequent avoidance action.