E-Alert Case Updates

U.S. District Court Examines The Rooker-Feldman Doctrine

Kathleen Morgan v. Geoffrey Scott
No.14-1319 (United States District Court for the District of Delaware, March 19, 2015)
by Richard J. Medoff, Law Clerk
Semmes, Bowen & Semmes (www.semmes.com)

Available at: http://www.ded.uscourts.gov/sites/default/files/opinions/slr/2015/march/14-1319.pdf

In Kathleen Morgan v. Geoffrey Scott, a case involving a motion to dismiss a lawsuit brought by a plaintiff seeking to reverse and remand decisions of the Delaware State Courts, the United States District Court for the District of Delaware concluded that it lacked subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) and the Rooker-Feldman doctrine espoused by the Supreme Court in Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983). Thus, Judge Sue L. Robinson granted the Defendant's motion to dismiss.

By way of factual background, the parties had known each other for several decades, and prior to this case, the parties had been involved in litigation in the Delaware State Courts. On December 6, 2011, Defendant Geoffrey Scott ("Defendant") filed suit against Plaintiff Kathleen Morgan ("Plaintiff") and Plaintiff's business entity, Turkeys Inc. ('Turkeys"), in the Superior Court of the State of Delaware for New Castle County, raising claims including breach of contract, fraud, negligent and intentional misrepresentation, fraudulent inducement, and mutual mistake ("the Scott action"). The claims in the Scott action arose from numerous loans that Defendant had made to Plaintiff and Turkeys. The Scott action went to trial in September 2013, and at the close of evidence, Defendant moved for judgment as a matter of law as to his claim of mutual mistake. The Superior Court granted Defendant's motion and ordered Plaintiff and Turkeys to pay restitution to Defendant in the amount of $300,000.

Plaintiff appealed and, on September 22, 2014, the Delaware Supreme Court affirmed the Superior Court's order granting Defendant's motion for judgment as a matter of law. On March 7, 2014, while the Scott action was still pending on appeal, Plaintiff had filed a lawsuit against Defendant in the Superior Court of the State of Delaware for New Castle County, ("the Morgan action"). Defendant moved to dismiss the Morgan action pursuant to Superior Court Rules 12(b)(6) and 13(a), and on July 11, 2014, the Morgan action was dismissed with prejudice.

Plaintiff then filed the lawsuit at issue, asking the U.S. District Court for the District of Delaware to reverse and remand the October 17, 2013 Superior Court judgment in the Scott action. Plaintiff alleged that, as a pro se litigant, she was denied the full extent of judicial process in the Scott action, and that Defendant had only filed the Scott action "for the "ill-gotten motive of obtaining judgment for use" in a different lawsuit. Defendant moved for dismissal on the grounds that Plaintiff's claims in the case before the court arose out of the subject matter of claims previously adjudicated in Delaware State Courts.

The court began its analysis by discussing to the Rooker-Feldman doctrine, which the court determined to be "dispositive of this case." First, the court noted that the Rooker-Feldman doctrine "refers to principles set forth by the Supreme Court in Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983)." The court further noted that because the Rooker-Feldman doctrine "divests the court of subject matter jurisdiction, it may be raised at any time by the court sua sponte." Desi's Pizza, Inc. v. City of Wilkes-Barre, 321 F.3d 411, 419 (3d Cir. 2003); Nesbit v. Gears Unlimited, Inc., 347 F.3d 72, 77 (3d Cir. 2003). The court then explained that federal district courts "are courts of original jurisdiction and have no authority to review final judgments of a state court in judicial proceedings." Rooker Fidelity Trust Co., 263 U.S. 413 (1923); see Power v. Department of Labor, 2002 WL 976001 (D. Del. 2002). The court further explained that the Rooker-Feldman doctrine "prevents the lower federal courts from exercising jurisdiction over cases brought by 'state-court losers' challenging 'state-court judgments rendered before the district court proceedings commenced.'" Lance v. Dennis, 546 U.S. 459, 460 (2006) (citations omitted).

Next, the court discussed the facts of the case. First, the court noted that Plaintiff took exceptions to decisions made in the Scott action, specifically the Superior Court's October 17, 2013 Order that granted Defendant's motion for a judgment as a matter of law against Plaintiff in the sum of $300,000, and the September 22, 2014 decision of the Delaware Supreme Court to affirm the Superior Court's October 17, 2013 Order. The court further noted that Plaintiff was asking the court to determine that those State court rulings were erroneously entered and to grant relief by reversing and remanding their decision.

The court explained, however, that the Rooker-Feldman doctrine prohibited the court from maintaining subject matter jurisdiction over a complaint "which effectively s[ought] to reverse and remand orders and judgments entered by the Delaware courts." The court further explained that Plaintiff's complaint was barred because the relief Plaintiff sought would require: "(1) the federal court [to] determine that the state court judgment was erroneously entered in order to grant the requested relief, or (2) the federal court [to] take an action that would negate the state court's judgment," neither of which the court is permitted to do under the Rooker-Feldman doctrine. In re Knapper, 407 F.3d 573, 581 (3d Cir. 2005). For those reasons, the court granted Defendant's motion to dismiss the complaint on the grounds that it lacked subject matter jurisdiction pursuant to the Rooker-Feldman doctrine and Federal Rule of Civil Procedure 12(b)(1).