Court Opinion

ID: 4679831
Source: CourtListenerOpinion
Date Created: 2021-04-21 21:00:39.225125+00
Date Added: 2024-06-11T08:03:51.290921
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       APR 21 2021
                                                                     MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

BRIAN LUNDSTROM,                                No.   20-55002

                Plaintiff-Appellant,            D.C. No.
                                                3:18-cv-02856-GPC-MSB
 v.

CARLA YOUNG; et al.,                            MEMORANDUM*

                Defendants-Appellees.

                   Appeal from the United States District Court
                     for the Southern District of California
                   Gonzalo P. Curiel, District Judge, Presiding

                       Argued and Submitted April 15, 2021
                              Pasadena, California

Before: M. SMITH and IKUTA, Circuit Judges, and STEELE,** District Judge.

      Plaintiff-Appellant Brian Lundstrom (Lundstrom) appeals the district court’s

dismissal of his First Amended Complaint against his ex-wife, Carla Young

(Young), and his employer, Ligand Pharmaceuticals Incorporated (Ligand), for lack

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable John E. Steele, United States District Judge for the
Middle District of Florida, sitting by designation.
of subject matter jurisdiction under the Rooker-Feldman doctrine1, failure to state a

claim, and lack of Article III standing. Lundstrom argues that his claims do not

amount to improper de facto appeals from orders from a Texas state court, that his

claims fall within the extrinsic fraud exception to Rooker-Feldman, and that he has

Article III standing. 2 Because the parties are familiar with the facts, we do not

recount them here, except as necessary to provide context to our ruling.

      We have jurisdiction under 28 U.S.C. § 1291. “We review an application of

the Rooker-Feldman doctrine de novo.” Carmona v. Carmona, 603 F.3d 1041, 1050

(9th Cir. 2010). Whether subject matter jurisdiction exists is a question of law that

we also review de novo. Bidart Bros. v. Cal. Apple Comm’n, 73 F.3d 925, 928 (9th

Cir. 1996) (citation omitted). We also review de novo a dismissal under Federal Rule

of Civil Procedure 12(b)(6). Rhoades v. Avon Prods., 504 F.3d 1151, 1156 (9th Cir.

2007).

      Under the Rooker-Feldman doctrine, federal district courts lack jurisdiction

over “cases brought by state-court losers complaining of injuries caused by state-

1
 See Rooker v. Fid. Tr. Co., 263 U.S. 413 (1923); D.C. Ct. of Appeals v. Feldman,
460 U.S. 462 (1983).
2
  Young seeks sanctions under Federal Rule of Appellate Procedure 38 and
28 U.S.C. § 1927. We deny that request because this appeal does not present highly
exceptional circumstances warranting sanctions, but instead involves complex issues
relating to the Rooker-Feldman doctrine, the majority of which are meritorious. See
In re Westwood Plaza N., 889 F.3d 975, 977 (9th Cir. 2018) (quoting Malhiot v. S.
Cal. Retail Clerks Union, 735 F.2d 1133, 1137 (9th Cir. 1984)).

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court judgments rendered before the district court proceedings commenced and

inviting district court review and rejection of those judgments.” Exxon Mobil Corp.

v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). Rooker-Feldman prevents “a

party losing in state court . . . from seeking what in substance would be appellate

review of the state judgment in a United States district court, based on the losing

party’s claim that the state judgment itself violates the loser’s federal rights.”

Johnson v. De Grandy, 512 U.S. 997, 1005–06 (1994).

      We developed a two-part test to determine whether the Rooker-Feldman

doctrine bars jurisdiction over a complaint filed in federal court. First, the federal

complaint must assert that the plaintiff was injured by “legal error or errors by the

state court.” Kougasian v. TMSL, Inc., 359 F.3d 1136, 1140 (9th Cir. 2004). Second,

the federal complaint must seek “relief from the state court judgment” as the

remedy. Id.

1.    In Claims 4 and 5, Lundstrom challenges Texas state court judgments directly,

petitioning the district court to declare that a 401(k) Qualified Domestic Relations

Order and a Stock Domestic Relations Order issued by a Texas state court are

invalid. Counsel for Lundstrom conceded this during oral argument. Because Claims

4 and 5 meet the two-part test from Kougasian, the district court lacked jurisdiction

to consider those claims under Rooker-Feldman and properly dismissed them. See

id.

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2.     Lundstrom’s remaining claims are not barred by Rooker-Feldman. The

Supreme Court emphasized that Rooker-Feldman is a narrow doctrine, and courts

should not construe it “to extend far beyond the contours of the Rooker and Feldman

cases,” because that would override “Congress’ conferral of federal-court

jurisdiction concurrent with jurisdiction exercised by state courts” and supersede

“the ordinary application of preclusion law pursuant to 28 U.S.C. § 1738.” Saudi

Basic Indus. Corp., 544 U.S. at 283. Accordingly, Rooker-Feldman “is confined to

cases of the kind from which the doctrine acquired its name . . . [and] does not

otherwise override or supplant preclusion doctrine or augment the circumscribed

doctrines that allow federal courts to stay or dismiss proceedings in deference to

state-court actions.” Id. at 284. “If a federal plaintiff presents 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, then there is jurisdiction and state law determines

whether the defendant prevails under principles of preclusion.” Id. at 293 (cleaned

up).

       Lundstrom’s remaining claims allege that Ligand and Young breached

various fiduciary duties under ERISA and state law. Lundstrom seeks damages,

equitable relief, and injunctive relief. These claims do not expressly seek “relief from

the [Texas] state court judgment” or assert that Lundstrom was injured by an “error

or errors by the [Texas] state court.” See Kougasian, 359 F.3d at 1140. These claims

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are independent, even though they “den[y] a legal conclusion that a state court has

reached in a case to which [Lundstrom] was a party.” See Saudi Basic Indus. Corp.,

544 U.S. at 293.

      Therefore, the district court erred by dismissing Claims 1, 2, and 6 for lack of

subject matter jurisdiction under Rooker-Feldman. The district court also erred by

dismissing Claims 1, 2, 3, and 6 for failure to allege a “concrete or actual harm that

is not barred by Rooker-Feldman.” To the extent the district court alternatively

dismissed Claim 3 on the merits, it erred by failing to address Lundstrom’s claim

that Ligand failed to comply with the procedural requirements in 29 U.S.C. §

1056(d)(3)(G)(i). The appellees waived any claim to the contrary by failing to

respond to this argument in their briefing. Moran v. Screening Pros, LLC, 943 F.3d

1175, 1180 (9th Cir. 2019).

                                    *      *      *

      We affirm the district court’s dismissal of Claims 4 and 5 because those claims

are barred under Rooker-Feldman.3 We reverse the district court’s dismissal of

Claims 1, 2, 3, 6, 7, 8, and 9, and remand those claims to the district court to consider

any other defenses, including claim and issue preclusion, in the first instance.

3
  Claim 4 should have been dismissed without prejudice because the district court
lacked subject matter jurisdiction to consider it. See Kelly v. Fleetwood Enters. Inc.,
377 F.3d 1034, 1036 (9th Cir. 2004). The district court shall enter an order reflecting
a dismissal without prejudice on Claims 4 and 5.

                                           5
      The district court shall allow Lundstrom leave to amend his complaint. If the

district court ultimately dismisses all of Lundstrom’s federal claims, it need not

exercise supplemental jurisdiction over any remaining state law claims. See 28

U.S.C. § 1367(c)(3).

      AFFIRMED IN PART, REVERSED AND REMANDED IN PART.

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