RLR Invs., LLC v. City of Pigeon Forge

CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)
Citation4 F.4th 380
Docket NumberNo. 20-6375,20-6375
Parties RLR INVESTMENTS, LLC, Plaintiff-Appellant, v. CITY OF PIGEON FORGE, TENNESSEE, Defendant-Appellee.
Decision Date13 July 2021

ON BRIEF: Gregory C. Logue, WOOLF MCCLANE BRIGHT ALLEN & CARPENTER PLLC, Knoxville, Tennessee, Anthony C. White, THOMPSON HINE LLP, Columbus, Ohio, Thomas M. Ritzert, THOMPSON HINE LLP, Cleveland, Ohio, for Appellant. Brian R. Bibb, WATSON, ROACH, BATSON & LAUDERBACK, P.L.C., Knoxville, Tennessee, Nathan D. Rowell, OGLE, ROWELL & PENLAND, P.C., Sevierville, Tennessee, for Appellee.

Before: CLAY, McKEAGUE, and LARSEN, Circuit Judges.

McKEAGUE, J., delivered the opinion of the court in which LARSEN, J., joined. CLAY, J. (pp. 396–406), delivered a separate dissenting opinion.

McKEAGUE, Circuit Judge.

The City of Pigeon Forge, Tennessee, (City) decided to construct a riverside pedestrian walkway that ran across RLR Investments, LLC's (RLR's) land. The City went to Tennessee state court with a petition for condemnation. The court determined that the project had a legitimate public use under Tennessee and federal law and issued an order of possession. Unhappy with that result, RLR filed a complaint in federal court alleging that the Order was unconstitutional and inconsistent with Tennessee law, asking the federal court to enjoin the Order's enforcement. The district court held that it lacked subject-matter jurisdiction under the Rooker -Feldman doctrine, and RLR appeals that determination, arguing that the Supreme Court's decision in Exxon Mobil Corp. v. Saudi Basic Indus. Corp. , 544 U.S. 280, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005), abrogated our precedent applying Rooker -Feldman to interlocutory orders. Because our precedent and Exxon can comfortably coexist, we affirm.

I

RLR owns two adjacent tracts of land on the Little Pigeon River in Pigeon Forge. When these events began, the first tract (Tract 1) had a private resort and parking spaces, while the second tract (Tract 2) had a duplex building.

The City decided to build a pedestrian walkway along the Little Pigeon River. The planned walkway went through both tracts, so the City filed a petition for condemnation (Petition) in Sevier County Circuit Court. See Tenn. Code Ann. § 29-17-101 et seq. (Tennessee's eminent-domain law). The Petition sought a permanent easement across both tracts, an easement which would make some or all of the parking spaces on Tract 1 unusable. In addition, the Petition sought temporary construction easements, including one on which the City would construct parking spaces on Tract 2 that would replace those lost on Tract 1.

RLR opposed the Petition. First, RLR argued that the compensation for the loss of the spaces on Tract 1 was too low. Second, RLR argued that the City's plan of building parking spaces on Tract 2 to replace those lost by Tract 1 was a private, rather than public, purpose. See Kelo v. City of New London , 545 U.S. 469, 477, 125 S.Ct. 2655, 162 L.Ed.2d 439 (2005) (explaining takings law).

The Circuit Court held a hearing and issued an order of possession (Order) granting the City everything the Petition sought. The court held it was "satisfied that the [C]ity ha[d] carried its burden of proof that the [pedestrian walkway] project [wa]s for [a] public purpose" and that it was a "proper exercise of the eminent domain powers of the [C]ity." The City took possession of the land and built the walkway, but never built the parking spots on Tract 2.

RLR continued to challenge the Order of Possession in the state trial court. Its challenges culminated in what it styled a motion for "summary judgment," in which RLR continued to argue that the Petition should be dismissed because it was not for a public purpose. Its theory seemed to be that the private purpose supporting the building of the parking spaces on Tract 2 "tainted" the entire Petition; this was true, RLR believed, even though it agreed that the easements across Tracts 1 and 2 were supported by the public purpose of building the pedestrian walkway. The Circuit Court held a hearing, but it was unpersuaded that the private purpose of the planned parking spaces required the entire Order of Possession to fall. The court denied the motion and cleared the way for the proceeding to progress to the valuation of the land.

Before the valuation proceedings happened, RLR filed the instant two-count complaint in federal court. The first count alleges an unlawful taking under the Fifth and Fourteenth Amendments and 42 U.S.C. § 1983. The second count1 similarly alleges that the City took "RLR's property without a proper public purpose" and that the City's "position that it may enforce an unconstitutional Order of Possession" even though it was "without a proper public purpose" is wrong. The prayer for relief requests judgments (1) "that the Order of Possession is unconstitutional" and "without a proper public purpose"; (2) that the City violated state law "when it took RLR's land without a proper public purpose"; and an injunction (3)

enjoining the City from [(a)] taking any action to interfere with RLR's right to peaceful possession and use of its property; [(b)] enjoining the City from exercising any ownership rights in RLR's property pursuant to the Order of Possession and from enforcing the Order of Possession; and [(c)] requiring the City to refile a new petition for condemnation limiting any taking of RLR's property to an appropriation for which there is a proper public purpose.

The district court held that it lacked subject-matter jurisdiction under the Rooker -Feldman doctrine. The court first held that the Rooker -Feldman doctrine still applies to interlocutory orders under Sixth Circuit precedent ( Pieper v. Am. Arb. Ass'n, Inc. , 336 F.3d 458 (6th Cir. 2003) ) despite intervening Supreme Court case law ( Exxon Mobil Corp. v. Saudi Basic Indus. Corp. , 544 U.S. 280, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005) ). Then, the court held that Rooker -Feldman applied here because it was clear that the source of RLR's injury was the state court's Order.

II

For the necessary context, we start with the somewhat troubled history of the Rooker -Feldman doctrine. Federal courts’ jurisdiction "is confined within such limits as Congress sees fit to prescribe." The Francis Wright , 105 U.S. 381, 385, 26 L.Ed. 1100 (1881) ; accord Keene Corp. v. United States , 508 U.S. 200, 207, 113 S.Ct. 2035, 124 L.Ed.2d 118 (1993). One such limit is hidden in 28 U.S.C. § 1257 ’s positive statement that "[f]inal judgments or decrees rendered by the highest court of a State ... may be reviewed by the Supreme Court." If the Supreme Court can review "final judgments" from state courts of last resort, then lower federal courts can't. See Kovacic v. Cuyahoga Cnty. Dep't of Child. and Fam. Servs. , 606 F.3d 301, 309 (6th Cir. 2010). That negative inference is called the Rooker -Feldman doctrine. See Rooker v. Fid. Tr. Co. , 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923) ; D.C. Ct. of Appeals v. Feldman , 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983).

In the two canonical cases, a litigant received a final judgment from a state's highest court and then sought review of that judgment from a federal district court rather than the Supreme Court. Rooker , 263 U.S. at 414, 44 S.Ct. 149 ; Feldman , 460 U.S. at 483, 103 S.Ct. 1303. Those are the easy cases, and they outline the basic rule: appeals from state courts of last resort go only to the Supreme Court. For a district court to hear such a case "would be an exercise of appellate jurisdiction[,] [but] [t]he jurisdiction possessed by the District Courts is strictly original." Rooker , 263 U.S. at 416, 44 S.Ct. 149 ; see, e.g. , 28 U.S.C. § 1331 ("The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." (emphasis added)).

The lower courts expanded on the basic rule to deal with harder cases. The expansions drew on Feldman ’s principle that "lower federal courts possess no power whatever to sit in direct review of state court decisions." Feldman , 460 U.S. at 482 n.16, 103 S.Ct. 1303 (quoting Atl. Coast Line R.R. Co. v. Brotherhood of Locomotive Eng'rs , 398 U.S. 281, 296, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970) ). The generality of the principle lent itself to broad expansion. See McCormick v. Braverman , 451 F.3d 382, 395 (6th Cir. 2006) (noting how courts used Rooker -Feldman as "a panacea to be applied whenever state court decisions and federal court decisions potentially or actually overlap"); Stephen I. Vladeck, The Increasingly "Unflagging Obligation": Federal Jurisdiction after Saudi Basic and Anna Nicole , 42 Tulsa L. Rev. 553, 563 (2007) (" Rooker -Feldman became a quasi-magical means of docket-clearing ...."). But with expansion came complication. See VanderKodde v. Mary Jane M. Elliott, P.C. , 951 F.3d 397, 405 (6th Cir. 2020) (Sutton, J., concurring) (noting that the doctrine became famous for "caus[ing] ... mischief, creating needless complications, distracting litigants and courts ..., and helping no one"). Courts agreed that the doctrine prevented "a de facto appeal from a state court judgment" in federal court, but "[d]etermining what constitutes a forbidden de facto appeal ... prove[d] difficult."2 Kougasian v. TMSL, Inc. , 359 F.3d 1136, 1139 (9th Cir. 2004).

The instant case involves one such difficulty: Does Rooker-Feldman apply to interlocutory orders from lower state courts? We answered affirmatively in Pieper v. American Arbitration Ass'n, Inc., 336 F.3d at 462. There, a state trial court issued an order compelling Pieper to arbitrate. Id. at 460. Rather than appealing that order, Pieper filed a lawsuit in federal court seeking "a declaration that the disputes between Pieper and [the state-court defendant] were not properly subject to arbitration." Id. On its face, the outcome in Pieper "seem[ed] indisputable"Rooker - F...

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