Skit Intern., Ltd. v. Dac Technologies of Arkansas

• Decision Date: 22 May 2007
• Docket Number: No. 06-3496.,06-3496.
• Citation: 487 F.3d 1154
• Parties: SKIT INTERNATIONAL, LTD, Plaintiff/Appellant, v. DAC TECHNOLOGIES OF ARKANSAS, INC., formerly known as DAC Technologies of America, Inc.; DAC Technologies Group International, Inc., Defendants/Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

487 F.3d 1154

SKIT INTERNATIONAL, LTD, Plaintiff/Appellant, v.DAC TECHNOLOGIES OF ARKANSAS, INC., formerly known as DAC Technologies of America, Inc.; DAC Technologies Group International, Inc., Defendants/Appellees.

No. 06-3496.

United States Court of Appeals, Eighth Circuit.

Submitted: April 13, 2007.

Filed: May 22, 2007.

Counsel who presented argument on behalf of the appellant was R. David Lewis, Little Rock, AR.

Counsel who presented argument on behalf of the appellee was Kenneth R. Shemin, Fayetteville, AR.

Before MURPHY, BENTON, and SHEPHERD, Circuit Judges.

MURPHY, Circuit Judge.

Skit International, Ltd.(Skit) brought this action against DAC Technologies of Arkansas, Inc.(DAC) seeking to have the judgment that DAC had obtained against it in state court set aside for lack of service and lack of personal jurisdiction.The district court¹ dismissed the action for lack of jurisdiction under the Rooker-Feldman doctrine.Skit appeals, and we affirm.

On August15, 2000 DAC, a Florida corporation, brought a breach of contract action in Pulaski County Circuit Court against Skit, a Hong Kong corporation, and Uni-Skit Technologies, Inc.(Uni-Skit), a California corporation.Summonses were served on Victor Lee, the registered agent for Uni-Skit.Attorney Mark Ross filed an answer and counterclaim on behalf of both companies and did not object to service or personal jurisdiction.The jury found in favor of DAC in August 2003, and a judgment was entered against Skit and Uni-Skit for $1,524,420.

Although Skit filed a notice of appeal, it moved to dismiss its appeal on April 12, 2004.The Arkansas Court of Appeals dismissed the appeal the following day.On January 6, 2005 Skit filed a motion in the circuit court to set aside the judgment as void for lack of personal jurisdiction, lack of service of summons, and lack of venue.Skit argued that it did not have minimum contacts with the forum state and that it had not been made aware of the lawsuit until late 2004, after judgment had been entered.It alleged that Victor Lee had not and could not accept service on behalf of Skit and that neither Skit nor Lee had authorized Ross to make an appearance on its behalf.After a hearing, the circuit court denied the motion on March 22, 2005.

On April 4, 2005 Skit filed another notice of appeal.It tendered the record to the clerk of the Arkansas Supreme Court on June 28, 2005, but the clerk refused to file it because the underlying motion to set aside the judgment appeared to have been untimely.Skit then filed a motion for rule on the clerk, asking the Arkansas Supreme Court to order the clerk to accept the record pursuant to Arkansas Supreme Court Rule 2-2.The supreme court denied the motion on September 8, 2005.

Skit then filed this diversity action in federal district court seeking to have the state judgment against it declared null and void on the grounds that it was obtained without jurisdiction and without service of process.The parties filed cross motions for summary judgment.DAC argued that the federal action was barred by res judicata, and the district court granted it summary judgment on this basis.

Skit moved for reconsideration, arguing that the state circuit court's decision was not entitled to preclusive effect because Skit had not had a full and fair opportunity to appeal it due to the clerk's refusal to file the record.After ordering supplemental briefing, the district court dismissed Skit's claim for lack of subject matter jurisdiction under the Rooker-Feldman doctrine because Skit was improperly seeking federal appellate review of a state court judgment.

Skit appeals, arguing that it is not attempting to use the lower federal courts as a means of appellate review and that the Rooker-Feldman doctrine does not apply when a party has been unable to obtain state appellate review of the merits of the claim it brings before the federal court.It contends that the state judgment is void because Skit was not properly served with a summons and that the circuit court's finding that it had been served was erroneous.We review de novo a district court's determination that it lacks subject matter jurisdiction.Simes v. Huckabee,354 F.3d 823, 827(8th Cir.2004).

The Rooker-Feldman doctrine prohibits lower federal courts from exercising appellate review of state court judgments.SeeD.C. Court of Appeals v. Feldman,460 U.S. 462, 482, 103 S.Ct. 1303, 75 L.Ed.2d 206(1983);Rooker v. Fid. Trust Co.,263 U.S. 413, 416, 44 S.Ct. 149, 68 L.Ed. 362(1923).The United States Supreme Court is the only federal court empowered to exercise appellate review of state court judgments, except for habeas petitions.28 U.S.C. § 1257;see alsoSimes,354 F.3d at 827.A district court is not deprived of jurisdiction over every case in which a plaintiff seeks a result different from the one it obtained in state court.SeeExxon Mobil Corp. v. Saudi Basic Indus. Corp.,544 U.S. 280, 292, 125 S.Ct. 1517, 161 L.Ed.2d 454(2005).Rather, Rooker-Feldman is implicated in that subset of cases where the losing party in a state court action subsequently complains about that judgment and seeks review and rejection of it.Id. at 284, 125 S.Ct. 1517.

Skit's federal complaint is in many ways a classic illustration of the cases covered by the Rooker-Feldman doctrine.On its face the complaint is denominated as an action for "collateral[] attack" on the Arkansas judgment and seeks to have that judgment declared void.This was the same relief sought by the plaintiffs in Rooker.263 U.S. at 414, 44 S.Ct. 149.There, the Supreme Court noted that even if the state court judgment were erroneous, "that did not make the judgment void, but merely left it open to reversal or modification in an appropriate and timely appellate proceeding."Id. at 415, 44 S.Ct. 149.As in Rooker, the alleged injury for which Skit seeks redress here stems directly from the state court judgment itself rather than from some separate injury caused by the defendant.Seeid. at 414-15, 44 S.Ct. 149;see alsoExxon Mobil,544 U.S. at 291, 125 S.Ct. 1517;Centres, Inc. v. Town of Brookfield,148 F.3d 699, 702(7th Cir.1998)(noting distinction between "a federal claim alleging injury caused by a state court judgment" and "a federal claim alleging a prior injury that a state court failed to remedy").Had the state court not entered a judgment against Skit and thereafter rejected its attempt to set aside the judgment for lack of service, Skit would have no injury in need of redress.SeeGarry v. Geils,82 F.3d 1362, 1368(7th Cir.1996).Moreover, Skit's complaint calls upon the district court to "overturn an injurious state-court judgment,"seeExxon Mobil,544 U.S. at 292, 125 S.Ct. 1517, on precisely the same grounds that Skit raised unsuccessfully to the state trial court: lack of service of process and lack of jurisdiction.²

Skit argues that because it was unable to obtain state appellate review of its lack of service claim, it is entitled to bring its challenge in federal court without implicating the Rooker-Feldman doctrine.Skit cites language in Simes v. Huckabee in which this court noted that Rooker-Feldman is triggered only when plaintiffs have had a "reasonable opportunity to raise their federal claims in state court."³354 F.3d at 829.In Simes,we concluded that plaintiffs had not had such an opportunity because the state court had failed entirely to address the federal claims plaintiffs had raised.Id. at 829.Because the federal claims had not been dealt with in the state decision, subsequent consideration of them by a federal district court could not amount to appellate review of the state court's decision.Seeid. at 827, 830;cf.Wood v. Orange County,715 F.2d 1543, 1547(11th Cir.1983)("an issue that a plaintiff had no reasonable opportunity to raise cannot properly be...