It is not often that lawyers come across the Rooker-Feldman doctrine. Nor courts. I taught federal jurisdiction at the University of Maryland School of Law, and I not only did not teach it, I never heard of it. I came across the doctrine in practice when exploring the options for challenging a state court judgment that effectively nullified a federal court consent decree. I soon learned two things about Rooker-Feldman: no one understands it, and it never applies. Or, rather, it only applied to Rooker and to Feldman. “Arcane” doesn’t even begin to describe this corner of the law.
The doctrine, however, remains on the books; although, the book of Rooker was published in 1923: Rooker v. Fidelity Trust Co., 263 U.S. 413. Feldman came along 60 years later in 1983: D.C. Court of Appeals v. Feldman, 460 U.S. 462. Somehow or other the U.S. District Court for South Carolina dismissed a case under Rooker-Feldman, and so it came to be that the Fourth Circuit was recently given the opportunity to take a deep dive into federal jurisdiction and come to the undoubtedly correct decision: Rooker-Feldman doesn’t apply. Of course.
Knowing this bare amount, the question is: Why does this case matter? … and Why am I writing this? First, the Court of Appeals thought that its 12-page slip opinion was important enough to be published. That is partly a matter of courtesy to the district judge: if you reverse a lower court, it is right and proper to explain why and to do so at length. But I think it goes deeper: federal courts show their best side when they take the time to explore the limits of their power. The final decision on the reach of that power, which is principally the decision on whether the federal court possesses jurisdiction to hear a case under the Constitution or under the statutes passed by Congress, rests with the federal courts themselves, and that means, in all but the rarest cases, the federal courts of appeals. It serves those courts well when they demonstrate to the people and the other institutions of government that they are willing to examine the limits of that power before they exercise it. After all, isn’t that one of the reasons why we celebrate Marbury v. Madison?
Finally, this kind of deep dive into the appellate jurisdiction possessed, or not, over state court judgments is attractive to courts precisely because it is not something that they come across all the time. With one habeas appeal and criminal appeal and immigration appeal after another, the new and novel becomes a relief, and allows the kind of contemplation of difficult issues that these men and women thought they would be grappling with when they signed on to this lifetime appointment. The daily grind for a federal appellate judge may not be the same as punching out one widget after another all day, week, month, and year long, but it can flag the spirit. I can imagine eyes lighting up when a Rooker-Feldman issue came across the judicial transom.
To the case: Hulsey v. Cisa, No. 18-2014 (January 17, 2020). The Limehouses, father and son, brought separate actions for defamation against Hulsey and his law firm in South Carolina state court. After removal and remand, they landed back in state court. Hulsey defaulted, and was denied discovery in both actions, each of which resulted in a substantial damages verdict against Hulsey. The South Carolina Supreme Court reversed, holding that the state trial court lacked jurisdiction because of a procedural defect in the handling of the remand order, even as the state Supreme Court issued a dictum that it was proper to deny discovery after default.
This time around, no default and discovery. Hulsey won his trial against the father; however, before the other case went to trial or the appeal on the first was decided, Hulsey agreed to settle both suits. A year later, Hulsey brought a federal suit against father and son, their businesses, the attorney who represented them, and two witnesses who testified at the default damages trials. The allegation was that the defamation lawsuits were a sham and defendants had concealed crucial evidence in order to obtain verdicts against him.
The federal trial court dismissed the lawsuit, seeing it as a veiled attack on the state court orders denying discovery after default. Because, ruled the district court, the complaint sought to “undermine” the state supreme court dictum about discovery, the complaint should be dismissed under Rooker-Feldman. The Fourth Circuit panel reversed.
As the panel noted, Rooker and Feldman were the only two cases in which the United States Supreme Court has ruled that there was an improper attempt by the federal courts to exercise appellate jurisdiction over state-court judgments, a power reserved to the U.S. Supreme Court on certiorari or direct appeal. The Supreme Court has narrowed Rooker-Feldman to only “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.” It is not surprising that no defendant has been able to thread that needle in the Supreme Court since 1983, and none are likely to ever again.
The Fourth Circuit panel listed all the reasons why Rooker-Feldman doesn’t apply, principally that Hulsey didn’t lose in state court so that he couldn’t be reviewing a state court judgment as a “state-court loser.” Moreover, the federal complaint does not seek redress for an injury caused by the state-court decision itself, but rather for injuries caused by defendants’ allegedly fraudulent conduct in prosecuting the actions against him in state court. That the defendants allegedly used the state courts as a tool to defraud Hulsey does not make the ruling the cause of his alleged injury.
So, as later glossed by the U.S. Supreme Court, with its list of hurdles to overcome to fall within the confines of this doctrine, the panel ruled that Rooker-Feldman didn’t apply. But that may not be the end of the matter. The district court only analyzed Rooker-Feldman, none of the other alternative grounds raised by defendants, and so the panel reversed and remanded for further proceedings.
One of the grounds that might be litigated on remand is whether the claims are barred under principles of preclusion. The panel is careful to cite a case in which that potential route to dismissal is mentioned. How the case was litigated in state court, what knowledge Hulsey had of the alleged fraud and when, and the terms of the settlement, might all become relevant, and they will be considered by a federal trial court with jurisdiction to apply state law of preclusion to the facts of the case.
And how did my Rooker-Feldman case turn out? Well, we never did go to federal court. The state appellate courts eventually worked it all out, with our help, and the judgment of the lower court that nullified a federal court decree was reversed, on another ground to avoid embarrassing the lower court, but achieving the result we sought.
Some cold night sit by a warm fire and imagine yourself as another Felix Frankfurter as you ponder the faded mysteries of Rooker-Feldman.