Todd v. Weltman, Weinberg & Reis Co., L.P.A.

• Decision Date: 13 January 2006
• Docket Number: No. 04-4109.,04-4109.
• Parties: Robert TODD, et al., Plaintiffs-Appellees, v. WELTMAN, WEINBERG & REIS CO., L.P.A., Defendant-Appellant, Mark N. Wiseman, Defendant.
• Court: U.S. Court of Appeals — Sixth Circuit

434 F.3d 432

Robert TODD, et al., Plaintiffs-Appellees, v. WELTMAN, WEINBERG & REIS CO., L.P.A., Defendant-Appellant, Mark N. Wiseman, Defendant.

No. 04-4109.

United States Court of Appeals, Sixth Circuit.

Argued: November 29, 2005.

Decided and Filed: January 13, 2006.

ARGUED: Christine M. Haaker, Thompson Hine, Dayton, Ohio, for Appellant. Stephen R. Felson, Newman &amp Meeks Co., Cincinnati, Ohio, for Appellees. ON BRIEF: Christine M. Haaker, Thompson Hine, Dayton, Ohio, for Appellant. Stephen R. Felson, Newman & Meeks Co., Cincinnati, Ohio, for Appellees.

Before: CLAY and COOK, Circuit Judges; COOK, District Judge.^*

OPINION

CLAY, Circuit Judge.

Defendant Weltman, Weinberg, & Reis Co., L.P.A. appeals an August 3, 2004 collateral order of the United States District Court for the Southern District of Ohio denying Defendant's motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) against Plaintiff Robert Todd's claims under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1691 et seq., specifically violations of 15 U.S.C. §§ 1692e and 1692f. While the district court has not yet rendered final judgment, this Court reviews the collateral order of the district court denying Defendant absolute immunity. For the following reasons, we AFFIRM the district court's order.

I. BACKGROUND

A. PROCEDURAL HISTORY

On August 11, 2003, Plaintiff filed a complaint against Defendant in the United States District Court for the Southern District of Ohio. Plaintiff alleged Defendant violated the FDCPA, specifically 15 U.S.C. §§ 1692e and 1692f. Section 1692e of Title 15 of the United States Code states: "A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." Section 1692f of Title 15 of the United States Code states: "A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt."

On February 17, 2004, Defendant filed a motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). Defendant's motion was based on four grounds: (1) the district court did not have subject matter jurisdiction over Plaintiff's claim because of the Rooker-Feldman doctrine; (2) res judicata barred Plaintiff's claim; (3) Defendant was absolutely immune for its actions; and (4) the FDCPA was inapplicable to Defendant's actions. On August 3, 2004, the district court denied Defendant's motion on all grounds.

On September 1, 2004, Defendant timely appealed the district court order with respect to the issue of witness immunity. On September 20, 2004, Defendant filed a motion with the district court to certify that the district court's order involved a collateral order that was immediately appealable. On September 21, 2004, the district court denied the motion.

Plaintiff filed a motion to dismiss Defendant's appeal and a motion for sanctions. On February 9, 2004, this Court denied Plaintiff's motions. The Court found that the district court's denial of absolute immunity to Defendant was a collateral order that was immediately appealable in the absence of a final judgment.

B. FACTS

Plaintiff is a resident of Cincinnati, Ohio. Plaintiff's sole source of income is Social Security Insurance Benefits, and he receives $750 per month for himself. He also receives $190 per month for each of his minor children. His wife is presently receiving short-term disability payments for an injury she sustained.

In 1992, Plaintiff purchased furniture from Value City, and Plaintiff financed the purchase with a loan from ITT Financial Services. Plaintiff defaulted on the loan, and Defendant brought suit on behalf of the creditor and obtained a judgment. Defendant then initiated proceedings to garnish Plaintiff's bank account. In order to commence such a proceeding under Ohio law, Defendant must file an affidavit which states that "the affiant has a reasonable basis to believe that the person named in the affidavit as the garnishee may have property, other than personal earnings, of the judgment debtor that is not exempt under the law of this state or the United States." Ohio Rev.Code Ann. § 2716.11. On February 23, 2003, Defendant submitted an affidavit that conformed to the Ohio statute to the Hamilton County Municipal Court. The court found that the affidavit was valid and froze the funds in Plaintiff's bank account.

On February 12, 2003, Plaintiff requested a hearing to contend that the funds in his bank account were exempt because they derived from Plaintiff's Social Security benefits and his wife's short-term disability benefits. On February 28, 2003, the court held that the funds were exempt.

Plaintiff contended that prior to submission of the affidavit, Defendant did not conduct a debtor's exam, did not undertake discovery as to whether Plaintiff possessed non-exempt assets, and otherwise had no factual basis for believing that Plaintiff's bank account contained non-exempt assets.

II. DISCUSSION

A. THE ROOKER-FELDMAN DOCTRINE DOES NOT PRECLUDE THIS COURT'S SUBJECT MATTER JURISDICTION

1. Standard of Review

This Court reviews questions of subject matter jurisdiction de novo. Green v. Ameritech Corp., 200 F.3d 967, 972 (6th Cir.2000).

2. Analysis

This Court has an independent obligation to determine whether the Court has subject matter jurisdiction. Olden v. LaFarge Corp., 383 F.3d 495, 498 (6th Cir.2004). That said, the Rooker-Feldman doctrine does not divest this Court of subject matter jurisdiction because the instant case is outside the scope of the doctrine.

a. Legal Framework

In Rooker v. Fidelity Trust Co., the plaintiffs filed an action in state court, and the state court ruled against the plaintiffs. 263 U.S. 413, 414, 44 S.Ct. 149, 68 L.Ed. 362 (1923). The state supreme court affirmed the decision. Id. The plaintiff then filed an action in federal district court alleging that the state court decision violated various federal constitutional provisions. Id. at 414-15, 44 S.Ct. 149. The district court dismissed the suit for lack of subject matter jurisdiction, and the Supreme Court affirmed. Id. at 415, 44 S.Ct. 149. The Court found that federal district courts were only empowered with original jurisdiction, and that they did not have appellate jurisdiction to hear a claim that a state court's decision was in error. Id. at 416, 44 S.Ct. 149. Only the Supreme Court had such appellate jurisdiction. Id.

In District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983), the Supreme Court reiterated its decision in Rooker. There, the plaintiff Feldman was an individual who sought to practice law but did not graduate from an accredited law school. Id. at 465, 103 S.Ct. 1303. Instead he completed a structured program of the State of Virginia where he studied in a practitioner's office, audited classes at the University of Virginia School of Law, and served as a judicial clerk with a federal district court. Id. The plaintiff passed the Virginia bar examination and was admitted to that state's bar. Id. The plaintiff then sought admission to the bar of the District of Columbia; however, the district had a rule that limited bar membership to graduates of ABA-accredited schools. The plaintiff filed a petition with the District of Columbia Court of Appeals to waive the graduation requirement, and the "state" court denied the plaintiff's petition. Id. at 466-68, 103 S.Ct. 1303. The plaintiff then filed a complaint in the federal district court challenging the state court decision. Id. at 468, 103 S.Ct. 1303. The plaintiff Hickey had a similar experience: he graduated from an unaccredited law school and petitioned the state court for waiver of the graduation requirement. Id. at 470-72, 103 S.Ct. 1303. The state court denied his petition, and the plaintiff filed suit in federal district court.

The Supreme Court found that the federal district court lacked subject matter jurisdiction over an appeal from a state court judicial proceeding. Id. at 476, 103 S.Ct. 1303. As a result, the plaintiffs could not challenge the state court's refusal to waive the graduation requirement in federal district court. Id. at 478-79, 103 S.Ct. 1303. The plaintiffs could, however, challenge the constitutionality of the graduation requirement itself in federal district court, as the state court promulgated the rule in a non-judicial setting. Id. at 482-86, 103 S.Ct. 1303. The Court also ruled that the federal district court lacked jurisdiction over plaintiffs' claim that the state court arbitrarily denied them a waiver of the rule; the Court reasoned that such a claim was "inextricably intertwined" with the state court's judicial decisions in denying the plaintiffs' petitions. Id. at 486-87, 103 S.Ct. 1303.

Subsequent to these cases, the federal courts of appeals began to apply the Rooker-Feldman doctrine to preclude federal subject matter jurisdiction in a wide variety of cases where the state court also asserted jurisdiction. Because of the inconsistencies between the circuits, the Supreme Court addressed the scope of the Rooker-Feldman doctrine in Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005).

The Supreme Court in Exxon Mobil held that the Rooker-Feldman doctrine applied only to "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." Id. at 1521-22. Exxon Mobil dealt specifically with the case where there were parallel state and federal cases on the same issue. The court held that normal preclusion jurisprudence, not Rooker-Feldman, would guide the federal court decision if the state court reached a decision first. Id. at 1527. In dicta, the court also addressed the circumstance where the plaintiff initiated a federal claim after a state...