Centres, Inc. v. Town of Brookfield, Wis.

• Decision Date: 15 June 1998
• Docket Number: No. 97-2790,97-2790
• Citation: 148 F.3d 699,1998 WL 315942
• Parties: CENTRES, INC. and Centres Ventures, Inc., Plaintiffs-Appellants, v. TOWN OF BROOKFIELD, WISCONSIN, Town of Brookfield Board of Supervisors, Keith Henderson, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 699

148 F.3d 699

CENTRES, INC. and Centres Ventures, Inc., Plaintiffs-Appellants, v. TOWN OF BROOKFIELD, WISCONSIN, Town of Brookfield Board of Supervisors, Keith Henderson, et al., Defendants-Appellees.

No. 97-2790.

United States Court of Appeals Seventh Circuit.

Argued Jan. 13, 1998.

Decided June 15, 1998.

Allen C. Schlinsog, Joseph S. Goode (argued), Kravit & Gass, Milwaukee, WI, for Plaintiff-Appellant.

Charles H. Bohl, Kathryn M. West (argued), Whyte, Hirschboeck & Dudek, Milwaukee, WI, for Defendants-Appellees.

Before CUMMINGS, RIPPLE and ROVNER, Circuit Judges.

RIPPLE, Circuit Judge.

Centres, Inc. and Centres Ventures, Inc. ("Centres") brought this § 1983 action against the Town of Brookfield, Wisconsin, the Town of Brookfield Board of Supervisors, and individual supervisors Keith Henderson, Carol Johnson, Debbie Prunty and Joseph Schwartz. The complaint alleges that the defendants violated Centres' due process rights by arbitrarily, capriciously and unreasonably denying its application for a building permit for commercial property in the Town of Brookfield. Centres also brought a supplemental state claim for inverse condemnation. The district court dismissed the federal claims on the ground that the Rooker-Feldman doctrine applied. We cannot accept this basis for dismissal of the complaint, and we therefore reverse the district court's judgment. Nevertheless, because we conclude that Count I, Centres' federal allegation, does not state a claim upon which relief can be granted, we remand that count with instructions to dismiss. We remand the supplemental state claim to the district court for proceedings consistent with this opinion.

I. BACKGROUND

A. Facts

In September 1994, Centres proposed to construct a Media Play retail store in Brookfield Wisconsin. In seeking approval for this construction, Centres addressed issues regarding the project, including concerns about traffic, raised by the Town's Architectural Control Committee and Plan Commission. Centres retained RSV Engineering, Inc., to study the proposed development's impact on traffic in the area. RSV analyzed the problem by studying such factors as current traffic patterns and the several commercial and residential buildings in the immediate area. Based on this study, RSV designed several improvements, including the addition of turn lanes, to absorb the expected impact of Centres' development.

The Plan Commission hired Ayres Associates to evaluate RSV's recommendations. Ayres concluded that the probable impact on traffic patterns did not prevent approval of Centres' building plan. However, in recommending that the Board of Supervisors approve Centres' proposal, the Plan Commission conditioned its ultimate approval on resolution of a storm water issue. After Centres resolved the storm water issue, the Plan Commission unanimously recommended approval to the Board of Supervisors.

However, the Board of Supervisors unanimously rejected Centres' plan. Supervisor Johnson believed that the development would adversely affect the safety of the roads. Supervisor Prunty identified a problem with the aesthetics of the proposed development and believed that the engineering firms had failed to address the effects of recent developments in the area. Also, Supervisor Henderson, who had voted in favor of the permit as a member of the Plan Commission, changed his vote.

On July 21, 1995, RSV wrote a letter to the defendants stating that its evaluation had considered the effects of the recent developments in the area. Centres also wrote letters to each of the supervisors detailing the history of the permit application. Centres requested that the Board reconsider its decision, but the Board summarily declined further review.

Centres then filed an action in state court seeking certiorari review of the Board's decision. ¹ On February 5, 1996, the state court held that the Town's decision not to approve the plan was supported by the law and the record, and was not arbitrary and capricious. On April 18, 1996, Centres' motion for reconsideration was denied. Centres did not appeal in the Wisconsin state court system because it had lost its option to purchase the real estate upon which the store was to be built when the property owner refused to renew the option. Instead, Centres brought this action in federal court.

B. Proceedings in the District Court

The district court dismissed the action on the basis of the Rooker-Feldman doctrine. In the district court's view, the cause of action stated in Centres' complaint essentially attacked the ruling of the state court because upholding Centres' claims effectively would have voided the state court ruling. Accordingly, the district court dismissed the action for want of jurisdiction.

II. DISCUSSION

A.

The Rooker-Feldman doctrine is rooted in the two decisions of the Supreme Court of the United States that have given the doctrine its name. See Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). The essence of the Rooker-Feldman doctrine is that the lower federal courts do not have the authority to review the judgments of the state courts even when a federal question is presented. The only federal court possessing such authority is the Supreme Court of the United States. ² As our case law has stated often, "lower federal courts lack jurisdiction to engage in appellate review of state-court determinations," Garry v. Geils, 82 F.3d 1362, 1365 (7th Cir.1996) (internal quotation omitted) (citing cases), or to consider collateral attacks on state court civil judgments, absent congressional authorization, ³ see GASH Associates v. Village of Rosemont, 995 F.2d 726, 727 (7th Cir.1993). Litigants who believe that a state judicial proceeding has violated their constitutional rights must appeal that decision through their state courts and then to the Supreme Court. ⁴ See Young v. Murphy, 90 F.3d 1225, 1230 (7th Cir.1996).

Our case law also sets forth the basic analytical methodology to be employed in determining the applicability of the Rooker-Feldman doctrine: whether the injury alleged by the federal plaintiff resulted from the state court judgment itself or is distinct from that judgment. ⁵ See Garry, 82 F.3d at 1365. If the injury alleged resulted from the state court judgment itself, the Rooker-Feldman doctrine dictates that the federal courts lack subject matter jurisdiction, even if the state court judgment was erroneous ⁶ or unconstitutional. ⁷ See id. at 1365-66. A decision by a state court, no matter how erroneous, is not itself a violation of the Constitution actionable in federal court. See Homola v. McNamara, 59 F.3d 647, 650 (7th Cir.1995). By contrast, if the alleged injury is distinct from the state court judgment and not inextricably intertwined with it, the Rooker-Feldman doctrine does not apply, although the doctrines of claim and issue preclusion may be applicable. See Garry, 82 F.3d at 1365-66. The definition of "inextricably intertwined" may be problematic; however, the "crucial point is whether 'the district court is in essence being called upon to review the state-court decision.' " Ritter v. Ross, 992 F.2d 750, 754 (7th Cir.1993) (quoting Feldman, 460 U.S. at 483-84 n. 16, 103 S.Ct. 1303), cert. denied, 510 U.S. 1046, 114 S.Ct. 694, 126 L.Ed.2d 661 (1994). Therefore, a federal claim alleging injury caused by a state court judgment must be distinguished from a federal claim alleging a prior injury that a state court failed to remedy. See Garry, 82 F.3d at 1366-67.

In defining the contours of the Rooker-Feldman doctrine, we have suggested a general guideline: If the federal plaintiff was the plaintiff in state court, he must contend with res judicata; if the federal plaintiff was the defendant in state court, he must contend with the Rooker-Feldman doctrine. See id. at 1367. As we stated in Homola:

A plaintiff who loses and tries again encounters the law of preclusion. The second complaint shows that the plaintiff wants to ignore rather than upset the judgment of the state tribunal. A defendant who has lost in state court and sues in federal court does not assert injury at the hands of his adversary; he asserts injury at the hands of the court, and the second suit therefore is an effort to obtain collateral review. It must be dismissed not on the basis of preclusion but for lack of jurisdiction.

59 F.3d at 650 (emphasis in original). However, this rule of thumb is merely an aid to analysis, not the analysis itself. Its utility is limited by its exceptions. Indeed, both the Rooker and the Feldman plaintiffs were also plaintiffs in the state judicial proceeding. Therefore, when the earlier state court proceeding is in the nature of a declaratory judgment suit and when the losing plaintiff attempts to try again in federal court, the Rooker-Feldman doctrine may prevent federal court jurisdiction. See Garry, 82 F.3d at 1368. Injury due to a state court decision remains the essential touchstone in determining the applicability of the Rooker-Feldman doctrine.

Because the Rooker-Feldman doctrine is jurisdictional in nature, its applicability ends the litigation in federal court and the court has no authority to address affirmative defenses, including res judicata. See id. at 1365. Therefore, as our colleague in the district court implicitly recognized, the applicability of Rooker-Feldman must be determined before considering res judicata. See id. If Rooker-Feldman applies, a res judicata claim must not be reached. See Homola, 59 F.3d at 650. The rule of thumb that we have just described helps, in most instances, in determining whether the Rooker-Feldman doctrine or preclusion principles are the appropriate approach to the problem at hand. ⁸

Therefore, although the Rooker-Feldman doctrine and principles of preclusion may be easily confused with each other because th...