Court Opinion

ID: 9385693
Source: CourtListenerOpinion
Date Created: 2023-04-07 20:00:40.826618+00
Date Added: 2024-06-11T17:18:03.932811
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                               File Name: 23a0160n.06

                                          No. 21-2626

                          UNITED STATES COURT OF APPEALS
                                                                                     FILED
                                                                                 Apr 07, 2023
                               FOR THE SIXTH CIRCUIT
                                                                            DEBORAH S. HUNT, Clerk
                                                        )
SHARRON ROSE,
                                                        )
       Plaintiff-Appellant,                             )
                                                        )    ON APPEAL FROM THE UNITED
v.                                                      )    STATES DISTRICT COURT FOR
                                                        )    THE EASTERN DISTRICT OF
OAKLAND       COUNTY,        MICHIGAN                   )    MICHIGAN
TREASURER; CITY OF SOUTHFIELD,                          )
MICHIGAN; SOUTHFIELD NEIGHBORHOOD                       )                              OPINION
REVITALIZATION INITIATIVE, LLC,                         )
       Defendants-Appellees.                            )
                                                        )

Before: GIBBONS, GRIFFIN, and STRANCH, Circuit Judges.

       JANE B. STRANCH, Circuit Judge. Oakland County took “absolute title” to Sharron

Rose’s home using the tax-foreclosure procedures under Michigan’s General Property Tax Act

(GPTA) to satisfy a tax debt of about $33,000. The home was estimated to be worth approximately

$250,000, but the County never refunded the difference between its fair market value and the taxes

owed. That difference was Rose’s equity interest in the property. Rose unsuccessfully challenged

this chain of events in Michigan state court as an unconstitutional taking under the United States

and Michigan Constitutions. Caselaw regarding the Takings Clause evolved over time, which led

Rose to bring this suit in federal court against the County and the subsequent purchasers of her

home—the City of Southfield and the Southfield Neighborhood Revitalization Initiative, LLC

(SNRI)—seeking just compensation.
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

       The district court dismissed Rose’s case as barred by res judicata and Rooker-Feldman.

Rose did not appeal. Instead, after the time to appeal had elapsed, she moved to reopen the case

under Federal Rule of Civil Procedure 60(b)(6) for reconsideration of her claims on the merits,

citing a “sea change” in the decisional law of takings, res judicata, and Rooker-Feldman that had

occurred after judgment was entered. For the reasons explained below, we AFFIRM the district

court’s decision not to reopen the case.

                                     I.    BACKGROUND

       The basic facts are undisputed. After Oakland County took title to Rose’s Southfield,

Michigan home in 2017, no public auction was held. Instead, the County sold the property to the

City of Southfield for the amount of Rose’s tax debt, the “minimum bid” authorized by the GPTA

at the time. The City then conveyed the property for a nominal price of $1 to SNRI, an entity that

renovates and resells “blighted” homes. Rose was never compensated for her equity interest.

       The law of takings has changed since the County first foreclosed on Rose’s property, and

even since the briefing in this appeal. The following three developments in takings law underlie

Rose’s motion to reopen the case.

       First is the Michigan Supreme Court’s decision in Rafaeli, LLC v. Oakland County, 952

N.W.2d 434 (Mich. 2020), issued five months after the district court dismissed Rose’s case. Two

former property owners sued Oakland County and its Treasurer in Michigan state court, alleging

the defendants committed unconstitutional takings by retaining the proceeds from the tax-

foreclosure sales of their properties, which exceeded the taxes they owed. Rafaeli, 952 N.W.2d at

440-41. The Michigan Supreme Court held that the “retention of those surplus proceeds is an

unconstitutional taking without just compensation” under the Michigan Constitution. Id. at 441.

It also held that “the GPTA is unconstitutional as applied to former property owners whose

                                               -2-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

properties were sold at a tax-foreclosure sale for more than the amount owed in unpaid taxes[.]”

Id. at 461. Rafaeli, in sum, recognized a former property owner’s right to “surplus proceeds” from

a tax-foreclosure sale, but not to non-monetized “equity held in property generally.” Id. at 466 &

n.134.

         Second, the Michigan legislature amended the GPTA in response to Rafaeli.                The

amendments, which went into effect in January 2021, generally require a foreclosed property to

be sold for fair market value rather than merely the amount of the tax debt. See Mich. Comp. Laws

§ 211.78m (2020). The amendments also created a path for former property owners to claim

surplus proceeds, which represent the monetized value of the former owner’s equity interest. See

Mich. Comp. Laws § 211.78t (2020).

         Finally, we issued Hall v. Meisner shortly before oral argument in this appeal, holding that

an unconstitutional taking occurs when a Michigan county takes “absolute title” to a home under

the GPTA without paying just compensation for the former owner’s equity interest, i.e., the

property’s value in excess of the tax debt. 51 F.4th 185, 196 (6th Cir. 2022).

         With these developments in mind, we turn to the factual and procedural background.

         A.     The Foreclosure and Sale of Rose’s Property

         Michigan’s GPTA authorizes the foreclosure and subsequent sale of tax-delinquent real

property to recover unpaid taxes, penalties, interest, and fees. In this case, the Oakland County

Treasurer foreclosed on Rose’s property as part of a “bulk foreclosure” initiated in Oakland County

Circuit Court in 2016. The GPTA requires that before a foreclosure judgment becomes final,

property owners must be “provided with various notices of the foreclosure process and of [their]

right to ‘redeem’ the property—meaning the right to remove it from that process—by payment of

all the taxes, interest, penalties, and fees due for the property.” Id. at 188. Despite receiving these

                                                 -3-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

notices, Rose did not redeem, and the circuit court entered “a foreclosure judgment that vested

‘absolute title’ to the property in the county . . . effective March 31 of the following year.”

Id. (quoting Mich. Comp. Laws § 211.78k(6)). The foreclosure judgment thus became final in

March 2017.

       The County did not sell Rose’s property at a public auction; the City purchased it pursuant

to its statutory right of first refusal. At the time of the sale, the GPTA permitted the state or a

municipality to purchase a foreclosed property for the “minimum bid,” consisting of the amount

of taxes, interest, and other costs owed on the property. Mich. Comp. Laws § 211.78m(1), (16)

(2015). Accordingly, the City paid $32,677 for Rose’s property, representing approximately

$26,000 in unpaid taxes, plus interest and costs. Rose’s property was free of any mortgage or other

encumbrance, and Rose estimates its fair market value was approximately $250,000.

       The City then conveyed the property to SNRI for $1. SNRI is a limited liability corporation

whose sole member is the Southfield Non-Profit Housing Corporation, and whose mission is to

renovate, repair, and rehabilitate tax-foreclosed properties, and then market them for sale to

financially qualified individuals and families. Rose still resides at the property under an escrow

agreement.    But she was never compensated by the County, City, or SNRI (collectively,

“Defendants”) for her equity interest in the property after her tax debt was satisfied.

       B.      Rose’s 2017 State Court Lawsuit

       A few months after the foreclosure judgment became final, Rose sued the Oakland County

Treasurer in state court alleging that an “unconstitutional taking” had occurred and requesting the

“court order a trial to determine Plaintiff’s just compensation as required by the US and Michigan

constitutions.” The County moved for summary disposition, which the state court granted on

multiple grounds. The state court held that it lacked subject matter jurisdiction to modify the

                                                 -4-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

judgment of foreclosure; that Rose lacked standing to raise a due process challenge to the notices

of foreclosure that she received; and that no taking had occurred because Rose had forfeited the

property under Mich. Comp. Laws § 211.78g(1) by failing to pay her taxes.

         Rose did not timely appeal, but later applied for leave to file a delayed appeal, seeking to

challenge the dismissal of her procedural due process claim—not her takings claim. See Rose

v. Treasurer of Oakland Cnty., No. 2017-160234-CH, Appl. for Leave to Appeal (Mich. Ct. App.

Nov. 18, 2018).1 The Michigan Court of Appeals denied Rose’s application in one sentence: “The

Court orders that the application for delayed appeal is DENIED for lack of merit in the grounds

presented.” Rose v. Meisner, No. 346309 (Mich. Ct. App. Apr. 4, 2019) (order). Rose did not

pursue a further appeal to the Michigan Supreme Court.

         C.       Rose’s 2019 Lawsuit in Federal District Court

         In October 2019, Rose sued in federal court, naming the City of Southfield and SNRI as

defendants in addition to the Oakland County Treasurer. The operative Complaint alleged

excessive fines, procedural due process, and takings claims in violation of the United States

Constitution. Defendants moved to dismiss under Federal Rules 12(b)(1) and 12(b)(6), and Rose

moved to file a second amended complaint. The district court granted Defendants’ motions and

denied Rose’s in a February 2020 order.

         The district court held that it lacked jurisdiction because “this case amounts to an appeal

of the state court judgment” under the Rooker-Feldman doctrine.                           Rose v. Oakland Cnty.

Treasurer, No. 19-13066, 2020 WL 871304, at *1 (E.D. Mich. Feb. 21, 2020). Because Rose

sought to “strike down” the foreclosure as an “unconstitutional taking,” her suit amounted “to a

1
 Though Rose’s leave application is not in this record, we may consider documents referenced in the pleadings that
are “integral to the claims,” as well as matters of public record. Com. Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d
327, 335-36 (6th Cir. 2007).

                                                          -5-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

direct assault on the state court judgment of foreclosure[.]” Id. at *4 (alteration and citation

omitted). In the alternative, the court held that “[e]ven if this lawsuit is not barred by the

Rooker-Feldman doctrine, the claims certainly are precluded by res judicata, because the same

takings, due process, and excessive fines claims were raised, or could have been raised, in the prior

state court lawsuit, which was resolved by a final judgment that was affirmed on appeal.” Id. at

*5. Finally, the court noted that Rose’s proposed second amended complaint “suffers from the

same defects as the prior complaints,” and denied leave to amend. Id. at *1. The district court

entered judgment in favor of Defendants. Rose did not appeal.

       D.      Rose’s Motions to Reopen

       In July 2020, Rose moved to set aside the judgment in the original state court bulk

foreclosure action on the basis that the applicable provisions of the GPTA were likely to be struck

down as unconstitutional by the Michigan Supreme Court in Rafaeli. The state court denied the

motion for lack of jurisdiction to “modify a previously entered judgment of foreclosure.” R. 39-3,

Oakland Cnty. Cir. Ct. Op. & Order, PageID 1570. The court also explained that Rose’s claim to

equity “had no bearing on whether the foreclosure judgment should be modified or set aside” and

that this issue “should have been addressed by a motion in another case.” Id., PageID 1573.

       Unsuccessful in setting aside the foreclosure judgment in state court, on January 3, 2021,

Rose moved to reopen her federal case under Rule 60(b), requesting reconsideration of her

claims on the merits. Rose argued that changes in decisional law following the dismissal of her

case—including the Michigan Supreme Court’s decision in Rafaeli, legislative amendments to the

GPTA, and several recent Sixth Circuit decisions—constituted special circumstances warranting

relief from judgment under Rule 60(b)(6).

                                                -6-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

        The district court rejected these arguments and declined to reopen the case.                           Rose

v. Oakland Cnty. Treasurer, No. 19-13066, 2021 WL 2562419, at *1 (E.D. Mich. Apr. 28, 2021).

The court concluded that Rose had “not established that any extraordinary and compelling

circumstance warrants relief from the judgment of dismissal issued more than a year ago, nor ha[d]

she pointed to any change in the facts or the law that warrants revisiting the Court’s prior ruling.”

Id. at *6. In May 2021, Rose filed a motion for reconsideration raising largely the same arguments,

which the district court also denied. Rose timely appealed, challenging the district court’s refusal

to reopen the case under Rule 60(b)(6).

                                               II.     ANALYSIS

        The overarching question presented on appeal is whether these changes in decisional law,

coupled with the other special circumstances in this case, warrant relief under Rule 60(b)(6), i.e.,

reopening the case for reconsideration of Rose’s takings claim2 on the merits.

      A.     Standard of Review and Application

        A district court’s denial of a Rule 60(b)(6) motion is reviewed for an abuse of discretion.3

Browder v. Dir., Dep’t of Corr. of Ill., 434 U.S. 257, 263 n.7 (1978); Blue Diamond Coal Co. v.

Trs. of UMWA Combined Ben. Fund, 249 F.3d 519, 524 (6th Cir. 2001). That standard is met

when we are left with “a definite and firm conviction that the trial court committed a clear error of

judgment.” Blue Diamond, 249 F.3d at 524 (quoting Davis v. Jellico Cmty. Hosp., Inc., 912 F.2d

2
  Rose pleaded three constitutional claims in the operative complaint—procedural due process, excessive fines, and
takings claims—but her arguments on appeal focus solely on the takings claim. Because her appeal made no mention
of her excessive fines or procedural due process claims, Rose has abandoned them. See Doe v. Mich. State Univ., 989
F.3d 418, 425 (6th Cir. 2021). Additionally, while her briefs reference an unjust enrichment claim, no such claim was
alleged in this lawsuit.
3
 Rose included subsections (b)(1) and (b)(5) in her original motion but raises only subsection (b)(6) on appeal. The
district court noted that Rose disavowed any reliance on the first two subsections at oral argument. Rose, 2021 WL
2562419, at *2.

                                                        -7-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

129, 133 (6th Cir. 1990)). Importantly, “an appeal from denial of Rule 60(b) relief does not bring

up the underlying judgment for review.” Browder, 434 U.S. at 263 n.7.

       Rule 60(b) permits a court to “relieve a party or its legal representative from a final

judgment, order, or proceeding” for enumerated reasons, including a catchall provision that

encompasses “any other reason that justifies relief.” Fed. R. Civ. P. 60(b)(6). A party may qualify

for Rule 60(b)(6) relief by demonstrating “an applicable change in decisional law, coupled with

some other special circumstance[.]” Blue Diamond, 249 F.3d at 524. Relief is appropriate “where

the interest in finality is somehow abrogated,” or “when a dispositive change in decisional law

occurs while a timely appeal is still pending.” Id. at 528.

       The City of Southfield raises two preliminary issues pertaining to Rule 60(b)(6). First, it

contends that Rose’s arguments go to the merits of the underlying dismissal order, which she failed

to timely appeal. The City urges us to disregard these arguments because Rule 60(b) is not a

substitute for appealing the underlying dismissal. While that is true, Rose’s arguments focus on

recent developments in decisional law that might warrant reopening her case. Her arguments fall

within the scope of Rule 60(b)(6) review. See id. at 524.

       Second, the City contends that Rose’s motion is untimely under Rule 60(c) because she

filed her motion about eleven months after the district court’s judgment, and she does not explain

her delay. But Rule 60(c) does not establish a specific timeframe to request relief. It requires only

that a Rule 60(b)(6) motion be “made within a reasonable time.” Fed. R. Civ. P. 60(c)(1). To

determine reasonableness, this court “examine[s] the time between the date of the decision

constituting a change in the law and the date that the Rule 60(b)(6) motion was filed.” Miller

v. Mays, 879 F.3d 691, 699 (6th Cir. 2018). Rose’s motion to reopen is based not only on the July

2020 decision in Rafaeli, but also on the GPTA amendments enacted in late December 2020, which

                                                -8-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

became effective on January 1, 2021. Rose’s motion to reopen was filed a mere two days later, on

January 3, 2021. That is within a reasonable time.

     B.     Res Judicata

        Rose’s leading argument is that the district court should have reversed its preclusion

holding based on new developments in res judicata jurisprudence. Citing the Supreme Court’s

decision in Knick v. Township of Scott, 139 S. Ct. 2162 (2019), and our recent decision in Harrison

v. Montgomery County, 997 F.3d 643 (6th Cir. 2021), Rose argues that she was caught in a

preclusion trap: she was forced to seek just compensation in state court before she could bring a

takings claim in federal court, but having lost in state court, she is unfairly precluded from litigating

in federal court. Rose contends that under Knick and Harrison, we are no longer required to give

the state court decision in her first lawsuit preclusive effect. Rose also argues the district court

erred in finding both that the state court judgment was a final adjudication on the merits, and that

the City of Southfield and SNRI were in privity with the Oakland County Treasurer.

        “Federal courts must give the same preclusive effect to a state-court judgment as that

judgment receives in the rendering state.” Buck v. Thomas M. Cooley L. Sch., 597 F.3d 812,

816-17 (6th Cir. 2010) (quoting Abbott v. Michigan, 474 F.3d 324, 330 (6th Cir. 2007)). Rose’s

“prior litigation took place in Michigan, which employs a ‘broad view of res judicata.”’ Id. at 817

(quoting In re MCI Telecomms. Compl., 596 N.W.2d 164, 183 (Mich. 1999)). Under Michigan

law, res judicata “bars not only claims already litigated, but also every claim arising from the same

transaction that the parties, exercising reasonable diligence, could have raised but did not.” Adair

v. State, 680 N.W.2d 386, 396 (Mich. 2004). Res judicata is an umbrella term that refers to two

distinct concepts:    issue preclusion (also called collateral estoppel), and claim preclusion

(confusingly also called res judicata). See Taylor v. Sturgell, 553 U.S. 880, 892 (2008). Claim

                                                  -9-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

preclusion “involves preclusion of entire claims,” while issue preclusion “focuses on specific

issues within an action.” Mecosta Cnty. Med. Ctr. v. Metro. Grp. Prop. & Cas. Ins. Co., 983

N.W.2d 401, 405-06 (Mich. 2022). Under Michigan law, claim preclusion “bars a second action

on the same claim if ‘(1) the prior action was decided on the merits, (2) both actions involve the

same parties or their privies, and (3) the matter in the second case was, or could have been, resolved

in the first.’” Id. at 405 (quoting Foster v. Foster, 983 N.W.2d 373, 379 (Mich. 2022)).

               1.      The Preclusion Trap

       We start with Rose’s argument that because she was required to exhaust her state law

remedies prior to filing a takings claim in federal court, it is unfair for the state court judgment to

preclude her federal takings claim.

       Before Knick, the Supreme Court had “held that a property owner whose property has been

taken by a local government has not suffered a violation of his Fifth Amendment rights—and thus

[could not] bring a federal takings claim in federal court—until a state court has denied his claim

for just compensation under state law.” Knick, 139 S. Ct. at 2167. Under that regime, “if a State

provide[d] an adequate procedure for seeking just compensation, the property owner [could not]

claim a violation of the Just Compensation Clause until it ha[d] used the procedure and been denied

just compensation.” Williamson Cnty. Reg’l Plan. Comm’n v. Hamilton Bank of Johnson City,

473 U.S. 172, 195 (1985), overruled by Knick, 139 S. Ct. 2162. In that vein, we held in Wayside

Church v. Van Buren County, 847 F.3d 812, 821-22 (6th Cir. 2017), that takings claims arising

from tax-foreclosure sales under Michigan’s GPTA must be litigated in state court before relief

could be sought in federal court. Michigan’s state court procedures provided an adequate remedy,

Wayside Church reasoned, because state courts exercise concurrent jurisdiction over takings

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No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

claims, and Michigan’s statutory scheme permitted the litigation of takings claims in state circuit

court. See id.

       Under Williamson County and Wayside Church, a property owner like Rose would not

have a ripe federal takings claim until her state court claim for just compensation had failed. See

Knick, 139 S. Ct. at 2167. But a state court’s resolution of the claim under state law is generally

preclusive in any subsequent federal suit. The takings plaintiff thus found “himself in a Catch-

22”: he could not “go to federal court without going to state court first;” but if he went to state

court and lost, his claim would be barred in federal court. Id. In 2019, Knick overruled this state-

litigation requirement, concluding that it imposed “an unjustifiable burden on takings plaintiffs.”

Id.

       Rose also points to Harrison, decided after her Rule 60(b)(6) motion was denied, which

applied Knick to an Ohio tax-foreclosure case. Harrison, 997 F.3d at 645-46. After the county

foreclosed on her home and transferred it to a landbank, Harrison brought a federal takings claim,

alleging that the home’s fair market value was more than the property taxes owed, and that she

“never received the surplus equity because the [Ohio] statute offers no way to pay it.” Id. at 646.

The district court granted the county’s motion to dismiss on the grounds that “claim preclusion

barred Harrison’s lawsuit because she could have raised a federal takings claim at several points

during the foreclosure process.” Id. Harrison declined to hold that the plaintiff’s federal

takings claim was precluded by the foreclosure action, finding that the third element of claim

preclusion—that a claim was or could have been litigated in the first suit—had not been met. Id.

at 648-49. “When impediments exist or when the opportunity to raise the federal claim had not

yet arisen in the prior state court action, ‘it is unfair to preclude’ a litigant from bringing another

action that raises ‘phases of the claim’ that he ‘was disabled from presenting in the first’ action.”

                                                 -11-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

Id. at 648 (quoting Restatement (Second) of Judgments § 26 cmt. c (Am. Law Inst. 1982)). We

reasoned that under Knick, property owners are no longer required “to invoke any potential state

procedures for receiving compensation for the taking” and can go directly to federal court as soon

as the property is transferred. Id. at 649.

       Harrison is distinguishable because it dealt with the claim-preclusive effect of a state court

foreclosure judgment. It did not address a separate state court action challenging a post-

foreclosure sale as an unconstitutional taking. The Harrison plaintiff did not bring a takings claim

under state or federal law prior to filing her federal suit—defendants argued only that she could

have done so as a defense to the foreclosure action. By contrast, Rose’s state court complaint

alleged that Oakland County took her property without paying just compensation under the

Takings Clauses of both “the U.S. and Michigan constitutions.” R. 4-2, PageID 205. As detailed

below, this claim was dismissed for failure to state a claim—a holding Rose never appealed.

       In other words, Rose actually litigated her takings claim in state court, and this fact dooms

her case. See Moore v. Hiram Twp., 988 F.3d 353, 360-61 (6th Cir. 2021) (holding that where the

plaintiff actually litigated his federal constitutional claim in a state administrative proceeding, res

judicata barred him from relitigating the claim in federal court). The posture of Rose’s case is

similar to our decision in Hall that affirmed the dismissal of takings claims where the plaintiffs

had “already sued and lost on claims arising from the very same occurrence that they [sought] to

relitigate here.” See Hall v. Meisner, Nos. 21-1700/21-2956, 2022 WL 7478163, at *1 (6th Cir.

Oct. 13, 2022). Hall held that the plaintiffs “simply have not provided us with any lawful basis,

under Michigan law,” to avoid res judicata. Id.

       Rose contends that it would be unfair to preclude her takings claim under Harrison because

her claim could not have been litigated in state court at that time; prior to Rafaeli, the Michigan

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No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

Court of Appeals had ruled that no taking occurred under the GPTA, which provided that the

property was “forfeited.” The Oakland County court did dismiss Rose’s “unconstitutional takings”

claim holding that “[p]roperty properly forfeited pursuant to state law and in accordance with due

process is not subject to a [t]akings claim,” citing Bennis v. Michigan, 516 U.S. 442, 452 (1996)

and Michigan’s GPTA. R. 4-4, PageID 359. In Rafaeli, the Michigan Supreme Court overturned

this understanding of forfeiture, explaining that it “improperly conflated the meaning of

‘forfeiture’ in an unrelated area of law,” i.e., civil-asset forfeiture under Bennis, “with the meaning

of ‘forfeiture’ as expressly described under the GPTA.” 952 N.W. 2d at 447-48.

       This clarification in the law, however, is not the type of “formal barrier” to litigation that

Harrison addressed. Formal barriers are “limitations on the competency of the system of courts

in which the first action was instituted,” or limitations stemming from “the separation of law from

equity[.]” Restatement (Second) of Judgments § 26 cmt. c. Rose identifies no such barriers to her

takings claim in the earlier state court action. Instead, she contends that the state court’s judgment

was wrong. This is not enough to avoid res judicata as it is “irrelevant . . . ‘that the judgment may

have been wrong or rested on a legal principle subsequently overruled in another case.’” Moore,

988 F.3d at 358 (quoting Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981)).

       Rose also asserts that she could not have litigated her takings claim in the state court

because, prior to the 2020 GPTA amendments, § 211.78k prohibited any relief except for due

process violations. But § 211.78k posed no barrier to the plaintiffs’ takings claims in Rafaeli, also

decided before these amendments, which recognized valid takings claims for “surplus proceeds”

(as opposed to the non-monetized equity interest Rose sought to vindicate) under the Michigan

Constitution. 952 N.W.2d at 466. The GPTA’s purported restrictions were not a jurisdictional or

procedural barrier to the Rafaeli plaintiffs’ takings claims, so they are not a barrier to Rose’s.

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No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

       Rose has not demonstrated that her takings claim falls within the preclusion trap described

in Knick and Harrison, because her claim was actually litigated. Res judicata remains a valid basis

for barring her takings claim.

               2.      Final Adjudication on the Merits and Privity

       Rose raises two more arguments against res judicata—that the state court judgment did not

constitute a final adjudication on the merits, and that the City of Southfield and SNRI are not in

privity with the Oakland County Treasurer.

       As to finality, it is true that the state court based its summary disposition order on several

grounds, including lack of subject matter jurisdiction and lack of standing, which ordinarily would

not be a dismissal on the merits. But these holdings did not relate to Rose’s takings claim. The

jurisdiction holding related only to the court’s ability to modify the judgment of foreclosure, which

is not the remedy for a takings claim. And the standing holding related only to Rose’s standing to

bring a due process challenge under § 211.78l to the notices of foreclosure she received. A takings

claim “is distinct from a claim of property deprivation without due process” claim. Rafaeli, 952

N.W.2d at 448.

       The state court dismissed Rose’s takings claim for the independent reason that she failed

to state a claim, reasoning that her property “was not taken by the Oakland County Treasurer” but

“forfeited” under the GPTA and Bennis, 516 U.S. at 452. R. 4-4, PageID 359. This holding falls

under Michigan Court Rule 2.116(C)(8), which is “necessarily a decision on the merits,” after

which Rose “should not be allowed to refile the same suit against the same defendant and dismissal

should therefore be with prejudice.” ABB Paint Finishing, Inc. v. Nat’l Union Fire Ins. Co., 567

N.W.2d 456, 458 (Mich. Ct. App. 1997). The court’s dismissal of Rose’s takings claim is a final

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No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

decision on the merits that precludes her federal lawsuit.4 Rose never appealed this aspect of the

dismissal order (though she appealed other aspects), and res judicata bars “relitigation of an

unappealed adverse judgment[.]” Moitie, 452 U.S. at 395.

         As to privity, Hall held that “the County alone” is liable for a takings claim like the one

Rose has alleged, so she would be unable to pursue this claim against the City of Southfield and

SNRI even if it were not barred by res judicata. See Hall, 51 F.4th at 196. In any event, Rose

apparently abandoned this argument in her reply brief.

         In sum, the law has changed since the state court’s dismissal of Rose’s takings claim, and

it is unfortunate that Rose cannot benefit from those changes. The outcome here, however, is

dictated by the unique circumstances of the record before us. Because Rose’s taking claim was

resolved by the state circuit court in a final decision on the merits, the district court did not abuse

its discretion in finding that res judicata prevented Rose from relitigating the claim in her federal

lawsuit.

      C.     The Rooker-Feldman Doctrine

         In denying Rose’s Rule 60(b)(6) motion, the district court also declined to revisit its

holding that it lacked subject matter jurisdiction to hear Rose’s takings claim pursuant to the

Rooker-Feldman doctrine, finding that her suit amounted to an impermissible appeal of the

judgment of foreclosure. Rose contends that our cases undercut the Rooker-Feldman rationale for

4
  Because the state circuit court’s order is the operative judgment for res judicata purposes, we need not determine
whether the Court of Appeals’ denial of Rose’s leave application “for lack of merit in the grounds presented” was a
final decision on the merits, as Defendants argue. See Halbert v. Michigan, 545 U.S. 605, 618 (2005) (cautioning that
when a Michigan Court of Appeals “denies leave using the stock phrase ‘for lack of merit in the grounds presented,’
its disposition may not be equivalent to a ‘final decision’ on the merits,” but “may simply signal that the court found
the matters asserted unworthy of the expenditure of further judicial resources.”).

                                                        -15-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

dismissal, citing our decisions in VanderKodde v. Mary Jane M. Elliott, P.C., 951 F.3d 397 (6th

Cir. 2020) and In re Lowry, No. 20-1712, 2021 WL 6112972 (6th Cir. Dec. 27, 2021).

          “The Rooker-Feldman doctrine bars lower federal courts from conducting appellate review

of final state-court judgments because 28 U.S.C. § 1257 vests sole jurisdiction to review such

claims in the Supreme Court.” VanderKodde, 951 F.3d at 402 (quoting Berry v. Schmitt, 688 F.3d

290, 298 (6th Cir. 2012)). The scope of the doctrine is limited—it “applies only to the ‘narrow’

set of ‘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.’” Id. (quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544

U.S. 280, 284 (2005)).

          To determine whether Rooker-Feldman bars a claim, we look to the “‘source of the injury

the plaintiff alleges in the federal complaint.’ If the source of the plaintiff’s injury is the state-

court judgment itself, then Rooker-Feldman applies. ‘If there is some other source of injury, such

as a third party’s actions, then the plaintiff asserts an independent claim.’” Id. (first quoting

McCormick v. Braverman, 415 F.3d 382, 393 (6th Cir. 2006), then quoting Lawrence v. Welch,

531 F.3d 364, 368-69 (6th Cir. 2008)). “A court cannot determine the source of the injury ‘without

reference to [the plaintiff’s] request for relief.” Id. (quoting Berry, 688 F.3d at 299) (alteration in

Berry).

          The district court held that both Rose’s request “to recover good title to her home” and her

request to recover the value of her lost equity are barred by the state court judgment of foreclosure.

Rose, 2021 WL 2562419, at *5-*6. The latter holding goes too far. For the takings claim, the

source of Rose’s injury is the County’s failure to compensate Rose for her equity interest, not the

foreclosure itself. “The remedy for a taking of private property is just compensation,” not “return

                                                  -16-
No. 21-2626, Rose v. Oakland Cnty., Mich. Treasurer, et al.

of the property.” See Rafaeli, 952 N.W.2d at 448-49. While the request for the court to “strike

down the foreclosure” is a direct attack on the state court foreclosure judgment, Rose’s claim for

just compensation is independent and therefore not barred by Rooker-Feldman.

       Lowry also indicates that Rose’s takings claim is independent from the foreclosure

judgment. See 2021 WL 6112972, at *1. Lowry involved a tax-foreclosure sale, and the same

group of defendants that Rose sued. Id. at *2. Lowry held that Rooker-Feldman did not bar a

federal bankruptcy court from hearing a fraudulent transfer claim under the bankruptcy code

because even though the claim was “closely related to the state foreclosure judgment,” the court

could “assume that the state court reached a proper foreclosure judgment, and then independently

decide whether the foreclosure could be avoided as a fraudulent transfer[.]” Id. at *3. Likewise,

Rose’s takings claim is an independent claim because we can assume the foreclosure judgment

was proper and then separately decide whether Rose was justly compensated for the taking.

       The district court erred in applying Rooker-Feldman to avoid ruling on the merits of Rose’s

takings claim. This error, however, was harmless. As explained above, the district court properly

held that res judicata barred the claim.

                                      III.   CONCLUSION

       For the foregoing reasons, the district court’s decision declining to reopen the case under

Rule 60(b)(6) is AFFIRMED.

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