Union Planters Bank Nat. Ass'n v. Salih

• Decision Date: 29 April 2004
• Docket Number: No. 03-30409.,03-30409.
• Citation: 369 F.3d 457
• Parties: UNION PLANTERS BANK NATIONAL ASSOCIATION, Plaintiff-Intervenor Defendant-Appellee, v. Tariq Maurice SALIH, individually and as administrator of the succession of Canty, Intervenor Plaintiff-Appellant, v. John A. Gavel, Jr., Defendant-Intervenor Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

369 F.3d 457

UNION PLANTERS BANK NATIONAL ASSOCIATION, Plaintiff-Intervenor Defendant-Appellee, v. Tariq Maurice SALIH, individually and as administrator of the succession of Canty, Intervenor Plaintiff-Appellant, v. John A. Gavel, Jr., Defendant-Intervenor Defendant-Appellee.

No. 03-30409.

United States Court of Appeals, Fifth Circuit.

April 29, 2004.

Mark Neal Bodin, Dwayne C. Jefferson, McGlinchey Stafford, New Orleans, LA, Brian P. Brooks (argued), Garrett Webster Wotkyns, O'Melveny & Myers, Washington, DC, for Union Planters Bank Nat. Ass'n.

Peter Denis Derbes (argued), New Orleans, LA, for Salih.

Robert S. Rooth (argued), Douglas L. Grundmeyer, Brent A. Talbot, Chaffe, McCall, Phillips, Toler & Sarpy, New Orleans, LA, for Gavel.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before JONES, WIENER, and PRADO, Circuit Judges.

WIENER, Circuit Judge:

In this appeal, we are asked to determine whether a federal district court can enjoin the production of information ordered produced by a Louisiana state court's subpoena duces tecum. Because the Rooker-Feldman doctrine forecloses federal subject matter jurisdiction in this case, we vacate the judgment of the district court and remand with instructions to dismiss this action in its entirety.

I. FACTS & PROCEEDINGS

In January 2001, the Intervenor Plaintiff — Appellant Tariq Salih sued the Plaintiff — Intervenor Defendant — Appellee Union Planters Bank National Association ("UPB" or "Union Planters") in Louisiana state court. Salih's putative class-action complaint alleged that UPB violated Louisiana law by engaging in "forced-placement" of flood insurance, causing UPB's borrowers to pay excessive insurance premiums. Specifically, Salih alleged that UPB regularly required its borrowers to carry flood insurance in an amount greater than that required by law and as specified in the mortgage agreements securing UPB's underlying loans. Salih asserted that instead of arranging for low-cost flood insurance through the pool of insurers approved by the Federal Emergency Management Agency, UPB force-placed insurance coverage through WNC Insurance Services, Inc. ("WNC"), a California-based third-party "surplus line" insurance broker. At all relevant times, the Defendant — Intervenor Defendant — Appellee John A. Gavel, Jr. was WNC's agent in Louisiana.

In early 2002, at Salih's request, the clerk of the subject state court issued third-party deposition and document subpoenas to WNC and Gavel. The subpoenas sought, inter alia, the names and addresses of UPB's Louisiana borrowers whose flood insurance had been issued through WNC. As respondents to the subpoena, WNC and Gavel filed a joint motion for a protective order and to quash the subpoenas (the "Motion to Quash"). They argued that their production of the information sought by Salih would (1) violate La.Rev.Stat. § 6:333, a state statute that regulates the disclosure by banks of their customer's financial records and (2) run afoul of the Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801, et seq. (2000) (the "GLBA").¹ UPB filed no formal pleading to join or otherwise endorse the Motion to Quash, but at oral argument, counsel for UPB voiced support for it, citing the GLBA as controlling authority.

The Louisiana trial court denied the Motion to Quash, but limited the scope of the document subpoena. WNC and Gavel jointly filed an emergency application for supervisory writs to the cognizant Louisiana Court of Appeal. In their writ application, WNC and Gavel relied on Louisiana law and the GLBA as support for their argument that Salih's subpoena "call[ed] for disclosure of information about loan defaults that borrowers would likely not want Union Planters or anyone else to disclose."² The Louisiana appellate court quashed the subpoena directed to WNC, but denied such relief for Gavel. No party sought review of this ruling by the Louisiana Supreme Court, and the trial court further modified the subpoena to clarify what Gavel was required to produce. Relying on the GLBA, UPB then filed the instant action in the district court to obtain temporary and permanent injunctive relief, seeking specifically to restrain Gavel from disclosing the information that he was ordered to produce pursuant to the modified state court subpoena.

After a hearing, the district court issued a preliminary injunction prohibiting Gavel "only from disclosing documents, and/or information, as set forth in the modified subpoena, and subsequent court clarifications, which would violate the GLBA," and prohibiting Salih "from taking any action in the state court which would render this [federal district] court's order ineffective or jeopardize the parties who were directed to comply with it."³ After further argument and another hearing, the district court made the preliminary injunction permanent.⁴ Salih timely filed a notice of appeal.

II. ANALYSIS

A. STANDARD OF REVIEW

"We exercise plenary, de novo review of a district court's assumption of subject matter jurisdiction."⁵

B. SUBJECT MATTER JURISDICTION AND THE ROOKER-FELDMAN DOCTRINE

Salih did not specifically raise Rooker-Feldman on appeal until his reply brief, but federal courts are duty-bound to examine the basis of subject matter jurisdiction sua sponte, even on appeal.⁶ As an initial matter, we must analyze the nature of the Louisiana state court discovery order through the lens of the Rooker-Feldman doctrine. "[T]he Rooker-Feldman doctrine only applies insofar as a state court judgment merits full faith and credit."⁷ We must therefore consider how the Louisiana courts would treat the discovery order at issue. When we do so, we encounter two sequential questions: (1) Would Louisiana courts give preclusive effect to the order requiring Gavel to produce the requested information; (2) if so, is UPB — which is not the named respondent to the subpoena — precluded from mounting a collateral attack in federal court against enforcement of the order?

1. The Discovery Order Was a "Final" State Court Judgment.

Under Article 2083 of the Louisiana Code of Civil Procedure ("LCCP"), "[a]n appeal may be taken from a final judgment rendered in causes in which appeals are given by law whether rendered after hearing or by default, [or] from an interlocutory judgment which may cause irreparable injury...."⁸ LCCP Article 1841 distinguishes between interlocutory and final orders by declaring that "[a] judgment that does not determine the merits but only preliminary matters in the course of the action is an interlocutory judgment"; but "[a] judgment that determines the merits in whole or in part is a final judgment."⁹ Louisiana courts have interpreted these code provisions to mean that a "ruling denying a motion to quash a subpoena duces tecum brought by a non-party to the action determines in whole the merits of this single issue between the parties.... It is, therefore, a final appealable judgment."¹⁰

These precepts of Louisiana law require us to deem the state court order in question to be a final judgment and accord it full faith and credit for Rooker-Feldman purposes. UPB nevertheless insists that, because WNC and Gavel did not pursue an appeal under LCCP Article 2083, but instead sought only a supervisory writ under LCCP Article 2201,¹¹ the trial court's order was merely interlocutory in nature, and therefore has no preclusive effect under the Rooker-Feldman doctrine. This reasoning is unpersuasive. In considering whether the collateral attack on a state court judgment in federal court is precluded by the Rooker-Feldman doctrine, the question we ask is not whether the order at issue was, in fact, appealed, but only whether the order was a "final state court judgment in a particular case" and thus was appealable.¹² The actions actually taken by WNC and Gavel — or even UPB — are immaterial. Full faith and credit attached by virtue of the state court's ruling on the Motion to Quash being final and appealable under Louisiana law — regardless of whether it was actually contested through the usual procedures for state appellate review.

2. UPB Is Barred From Seeking Inferior Federal Court Review of the State Discovery Order on Federal Grounds.

The second issue that we must address is presented by UPB's contention that it was technically not a party to the Louisiana state court order and therefore cannot be subject to its preclusive effect.¹³ This argument is likewise without merit. UPB was the named defendant in the state court proceedings and certainly had standing to challenge the production of information requested in the subpoena duces tecum.¹⁴ Indeed, the gravamen of UPB's complaint in federal court is its asserted interest under the GLBA in protecting the privacy of its customers' non-public information — an interest that UPB contends will be violated if Gavel is allowed or required to disclose the contested information to Salih. In contrast to cases in which the Rooker-Feldman doctrine was held not to bar federal jurisdiction because the federal plaintiff was not a party to the state court proceedings,¹⁵ UPB was clearly in a position to seek review of a state court ruling that UPB contends was erroneously entered. The fact that UPB unilaterally chose not to join WNC and Gavel's Motion to Quash or to seek appellate remedies beyond the Louisiana Court of Appeal is of no consequence.¹⁶ We have explained that a party collaterally attacking a state court judgment cannot circumvent Rooker-Feldman's reach by deliberately bypassing available state procedures for judicial review:

A rejected applicant's deliberate bypass of those procedures that envisioned (ultimately) a reviewable final state-court judgment, itself under Feldman not subject to federal district-court review, should not, it would seem, entitle the applicant to a review of his constitutional claims by a federal district court that would have been unavailable to him if he had pursued his claim to final state...