Court Opinion

ID: 178110
Source: CourtListenerOpinion
Date Created: 2010-10-27 16:43:23+00
Date Added: 2024-06-11T17:25:43.833333
License: Public Domain

NOT PRECEDENTIAL

             UNITED STATES COURT OF APPEALS
                  FOR THE THIRD CIRCUIT

                            No. 09-4678

          DAVID J. SCHATTEN; DONNA P. SCHATTEN,
                                           Appellants

                                 v.

          WEICHERT REALTORS, INC.; BURGDORFF
          REALTORS, INC.; GLENN A. GRANT, Acting
          Director of the New Jersey Administrative Office
                            of the Courts

           On Appeal from the United States District Court
                    for the District of New Jersey
                   (D.C. Civil No. 2-09-cv-01156)
              District Judge: Honorable Jose L. Linares

             Submitted Under Third Circuit LAR 34.1(a)
                         October 25, 2010

Before: McKEE, Chief Judge, SLOVITER and RENDELL, Circuit Judges

                      (Filed: October 27, 2010)

                             OPINION
SLOVITER, Circuit Judge.

                                             I.

       David and Donna Schatten appeal the District Court’s dismissal of their lawsuit for

lack of subject-matter jurisdiction pursuant to the Rooker-Feldman doctrine.

We review questions of subject-matter jurisdiction de novo. Great Western Mining &

Mineral Co. v. Fox Rothschild LLP, --- F.3d ----, [2010 WL 3035466, at *4] (3d Cir.

[Aug. 5,] 2010). “In an appeal from a grant of a motion to dismiss for lack of subject

matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), we review only

whether the allegations on the face of the complaint, taken as true, allege facts sufficient

to invoke the jurisdiction of the district court.” Taliaferro v. Darby Tp. Zoning Bd., 458

F.3d 181, 188 (3d Cir. 2006) (internal citations and quotations omitted).

       According to their federal complaint, the Schattens purchased a home from

Richard and Lora Haws in 1994. In 1995, they filed a lawsuit in New Jersey Superior

Court against, inter alia, the Haws, Burgdorff Realtors, Inc., the selling broker, and

Weichert Realtors, the listing broker. In their federal complaint (hereafter referred to as

“Complaint”), the Schattens asserted that “[T]he allegations contained in the Superior

Court Complaint were that the Haws intentionally and fraudulently concealed material

defects in the house which they sold to [the Schattens], including failing to disclose the

existence of an underground oil tank; that the Haws negligently maintained the premises,

including the deck, so as to cause injury to Donna Schatten; that Weichert had actual

                                              2
knowledge of these circumstances; and that Burgdorff, in the exercise of its required

standard of care, should have known of them.” Complaint at ¶ 5. The Haws were

subsequently dropped from the suit “as a result of their bankruptcy . . . .” Id.

       In December 1998, after discovery was completed, the Superior Court granted

summary judgment in favor of Weichert and Burgdorff on all counts except for the

claimed failure to disclose the existence of the oil tank. A month later, the Schattens

sought leave to file an interlocutory appeal of that decision but were denied. The case

then stagnated for two years while the Schattens awaited a trial date.

       In March 2001, the Schattens moved to restore the claims that had been dismissed,

but that motion was denied. “Following the entry of [that order], while plaintiffs awaited

the scheduling of a trial date, the Clerk’s office, without notice to any party or counsel,

mistakenly closed and archived the file, incorrectly believing the case had been

concluded.” Id. at ¶ 20. “When no trial was ever scheduled, and after multiple contacts

with the Clerk’s office to ascertain the status of the case and the location of the file, and

following repeated requests to have the file retrieved from the archives and relisted, [the

Schattens] moved for a Case Management Conference to address the remaining issues in

the case and a schedule for proceeding.” Id. at ¶ 21. That motion – which according to

the Appellate Division was made in February 2006 – about five years after the plaintiffs’

previous motion – was denied in March 2006.

       Weichert and Burgdorff then moved to dismiss the complaint, asserting the

                                               3
defense of laches and arguing in part that they were prejudiced by the passage of time

because a key witness had passed away in 2004, files had been destroyed, and witnesses’

memories had faded. The Superior Court granted that motion and dismissed the

complaint, and the Schattens appealed all of the rulings in the case, arguing in relevant

part that “the judge erred . . . because there is no prejudice to [the] defendants . . . and

plaintiffs did not cause the matter to be removed from the calendar . . . .” App. at 53.

Unconvinced, the Appellate Division affirmed.

       The Schattens then filed a complaint in the United States District Court against

Weichert, Burgdorff, and the Honorable Glenn A. Grant, the acting Director of the New

Jersey Administrative Office of the Courts, asserting that “[a]s a result of [the decisions

of the state courts, the Schattens] have been deprived of an appellate adjudication on the

merits of their claims and, were the appeal to be successful, of the possibility of redress at

the trial level, all without due process of law, as guaranteed by the Fifth and Fourteenth

Amendments to the United States Constitution.” Complaint at ¶ 26. As relief, the

Schattens requested an order directing that Grant “require that the Superior Court of New

Jersey, Appellate Division, consider on the substantive merits” the Schattens’ various

claims regarding their house purchase. Id. at ¶ 27(a). The defendants moved to dismiss,

and the District Court granted those motions on the grounds that the Rooker-Feldman

doctrine barred it from exerting subject-matter jurisdiction over the Schattens’ claims.

                                               4
The Schattens timely appealed.1

                                              II.

       The Rooker-Feldman doctrine is based on the principle that the Supreme Court’s

“appellate jurisdiction over state-court judgments, 28 U.S.C. § 1257, precludes a United

States district court from exercising subject-matter jurisdiction in an action it would

otherwise be empowered to adjudicate under a congressional grant of authority . . . .”

Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 291 (2005). The Supreme

Court in Exxon Mobile made clear that the “doctrine, . . . is confined to . . . 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. at 284.

       In our recent decision in Great Western, we “[broke] down the holding of Exxon

Mobil, [and] conclude[d] that there are four requirements that must be met for the

Rooker-Feldman doctrine to apply: (1) the federal plaintiff lost in state court; (2) the

plaintiff complains of injuries caused by [the] state-court judgments; (3) those judgments

were rendered before the federal suit was filed; and (4) the plaintiff is inviting the district

court to review and reject the state judgments.” --- F.3d at ____ [2010 WL 3035466, at

*6] (internal quotations and alterations omitted). The Schattens argue that their injuries

                    1
                       We have jurisdiction under 29 U.S.C. § 1291.            See
             Taliaferro, 458 F.3d at 188.

                                               5
were not caused by the state-court judgments and, accordingly, that they are not asking

for review of those judgments. Instead, the Schattens contend that they have presented

“an independent federal claim based on the denial of their constitutional right to due

process, as a result of the trial court and Appellate Division’s failure to adjudicate the

state court claims on their merits.” Appellants’ Br. at 2-3. More specifically, they argue

that the “due process claim underlying the Complaint filed in the District Court is not

premised upon appealing an adjudication by the state court, but, rather, the lack of

adjudication by the Appellate Division, which refused to consider the state court case on

its merits” and instead dismissed the action based on the laches defense. Appellants’ Br.

at 13. We disagree with the Schattens that their federal claim is “independent” of the

underlying state actions.

       As the Schattens recognize, “the Constitutional claim [they have] asserted . . . in

their federal Complaint was neither adjudicated nor even alleged in the state court action

. . . because their [asserted] protected right to due process under the Fifth and Fourteenth

Amendments was not violated until the trial court and, subsequently, the Appellate

Division refused to adjudicate the merits of their case . . . .” Appellants’ Br. at 14. Thus,

the injury the Schattens complain of is caused by the underlying state-court decisions

dismissing their complaint, and they have “repaired to federal court to undo” that

decision. Exxon, 544 U.S. at 293. As we stated in Great Western, “[p]rohibited appellate

review consists of a review of the proceedings already conducted by the lower tribunal to

                                              6
determine whether it reached its result in accordance with law.” --- F.3d at          [2010

WL 3035466, at *8] (internal quotations and alterations omitted). That is exactly what

the Schattens asked the District Court to do.

       To be sure, in Great Western we held that the district court had jurisdiction over a

claim that a conspiracy existed among the defendants and the Pennsylvania judiciary to

rule in favor of those defendants at state-court proceedings. Id. at ____. We so held

because the plaintiff was “not merely contending that the state-court decisions were

incorrect or that they were themselves in violation of the Constitution. Instead, [the

plaintiff] claim[ed] that people involved in the decision violated some independent right,

that is, the right to an impartial forum.” Id. (internal quotations omitted). We noted that

the alleged conspiracy “to reach a predetermined outcome in a case” itself violated a

constitutional right independent of any subsequent state-court decision. Id. As a result,

the state-court judgments were not the source of the plaintiff’s injuries and, indeed, the

plaintiff was not asking that those judgments be overturned, but instead was seeking

damages. Id. at --- F.3d at     .

       As is evident, the Schattens do not allege that they were injured by any pre-

decision conspiracy or other malfeasance that denied them due process. Instead, their

claim is that the state-court decisions themselves violated due process by cutting short

their ability to litigate the merits of their complaints, and that those state-court decisions

therefore must be effectively overturned. As the Schattens put it, their Complaint at its

                                                7
core “alleges that the State Court improperly failed to remedy a prior injury to the

Appellants caused by adverse parties.” Appellants’ Br. at 3. Thus, the Complaint

essentially requests that the District Court sit in appellate review of the state-court

decisions: that is prohibited by the Rooker-Feldman doctrine.2

       The Schattens’ argument that their due process claim is “independent” because it

was not presented in the state proceeding is unavailing. “Just presenting in federal court a

legal theory not raised in state court, however, cannot insulate a federal plaintiff’s suit

from Rooker-Feldman if the federal suit nonetheless complains of injury from a state-

court judgment and seeks to have the state-court judgment reversed.” Hoblock v. Albany

Cnty. Bd. of Elections, 422 F.3d 77, 86 (2d Cir. 2005). The facts of Feldman itself make

this clear. There, the Supreme Court held that the district court lacked subject-matter

jurisdiction notwithstanding the fact that the plaintiff’s constitutional challenge to the

state-court judgment was not considered by the state court. Dist. of Columbia Ct. of

Appeals v. Feldman, 460 U.S. 462, 482-83 (1983).

                    2
                       Any lingering doubt in this case is resolved conclusively
             by the relief that the Schattens seek, i.e., an order that the state
             courts consider the substantive merits of their claims regarding the
             purchase of the property. Such an order would, of course, require
             the state courts to vacate their own orders dismissing the Schattens’
             complaint with prejudice. As we noted in Great Western, “[i]n
             both Rooker and Feldman, the plaintiffs sought to have the
             state-court decisions undone or declared null and void by the
             federal courts,” and the Supreme Court held that this constituted
             prohibited appellate review. --- F.3d at ____.

                                               8
       Similarly, the Schattens argue that because the “merits” of their state-court claims

were never decided by the state courts, the Rooker-Feldman doctrine does not apply to

their federal complaint. They rely heavily on our decision in Gulla v. N. Strabane Tp.,

146 F.3d 168 (3d Cir. 1998). In that case, a state court decided that plaintiffs, adjacent

landowners, did not have standing under state law to challenge approval of the

subdivision of the adjacent property. Those plaintiffs then brought suit in federal court

asserting violation of their federal due process, equal protection and just compensation

rights as a result of the subdivision plan that had been approved in the state courts. Id. at

173-74. We denied dismissal of the federal claim on Rooker-Feldman grounds, reasoning

that the district court had jurisdiction because the state court “did not adjudicate the

merits of the constitutional claims.” Id. at 173.

       The issue decided in Gulla is not present here because the plaintiffs in Gulla did

not request that the state-court decisions as to their lack of standing be reversed. In

contrast, the relief the Schattens seek from the federal court, a mandatory injunction

compelling the state courts to consider their claims, would effectively overturn the state-

court decisions dismissing their claim on the ground of laches. Such a claim for relief is

impermissible under the Rooker-Feldman doctrine.3

                    3
                      Presumably, the Schattens have not brought federal claims
             for relief based on the underlying facts of their state-court suit
             because there are none over which they can invoke federal question
             or diversity jurisdiction.

                                              9
                                     III.

For the reasons set forth above, we will affirm the judgment of the District Court.

                                     10