Van Hoven v. Buckles & Buckles, P. L.C.

• Decision Date: 16 January 2020
• Docket Number: Nos. 18-2399/19-1078,s. 18-2399/19-1078
• Citation: 947 F.3d 889
• Parties: Maureen VAN HOVEN, for herself and class members, Plaintiff-Appellee, v. BUCKLES & BUCKLES, P.L.C.; Geraldine C. Buckles; Michael H.R. Buckles, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

947 F.3d 889

Maureen VAN HOVEN, for herself and class members, Plaintiff-Appellee,

v.BUCKLES & BUCKLES, P.L.C.; Geraldine C. Buckles; Michael H.R. Buckles, Defendants-Appellants.

Nos. 18-2399/19-1078

United States Court of Appeals, Sixth Circuit.

Argued: October 23, 2019

Decided and Filed: January 16, 2020

SUTTON, Circuit Judge.

A lawyer sued two lawyers, and each side hired more lawyers. Five years later, after "Stalingrad litigation" tactics, discovery sanctions, and dueling allegations of professional misconduct, we are left with $3,662 in damages and roughly $180,000 in attorney’s fees. We vacate and remand.

I.

Maureen Van Hoven, a Michigan attorney, defaulted on a credit card debt with Discover several years ago. Discover hired Buckles & Buckles, a law firm, to collect the debt. The law firm filed a debt collection lawsuit in state court and won. Van Hoven didn’t pay.

Faced with a recalcitrant debtor, a creditor may use garnishment to intercept the debtor’s income at its source (say from the debtor’s employer) rather than trying to collect from the debtor herself. Post-judgment garnishment usually comes easily because the debtor already had her day in court and lost. That’s true in Michigan, where the Michigan Court Rules offer a simplified post-judgment garnishment procedure. To collect, the creditor gives the court clerk a verified statement that describes the debt and the parties. MCR 3.101(D). If everything "appears to be correct," the clerk issues a writ of garnishment and the creditor serves it on the third party, the garnishee. MCR 3.101(D)–(E). Unless the garnishee or debtor objects, that’s usually it: The garnishee gives the money to the creditor rather than the debtor. MCR 3.101(J)(1).

Buckles & Buckles invoked the procedure to collect this debt, filing four requests for a writ of garnishment over the course of a year. Van Hoven says those requests violated the Michigan Court Rules in two ways. In each request, Buckles tacked on the costs of the request (a $15 filing fee) to the amount due. And in later garnishment requests, Buckles added the costs of prior failed garnishments, those that didn’t result in any money changing hands.

Van Hoven didn’t object to the law firm’s garnishment requests in Michigan state court, as the Rules permit. MCR 3.101(K). She instead filed a class action lawsuit in federal court under the Fair Debt Collection Practices Act, which prohibits debt collectors from making false statements in their dunning demands. 15 U.S.C. § 1692e.

More twists and turns later, Van Hoven won her class action. The court found that Buckles & Buckles owed 168 class members $3,662 in damages—$22 per person on average. Her attorneys sought $186,680 in attorney’s fees, and the court granted their request in full.

Buckles & Buckles appealed the merits ruling and the attorney’s fee award.

II.

Buckles & Buckles challenges the district court’s jurisdiction to hear the case under the Rooker - Feldman doctrine. Rooker v. Fid. Tr. Co. , 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923) ; D.C. Court of Appeals v. Feldman , 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). Section 1257 of Title 28 gives the United States Supreme Court exclusive jurisdiction to review appeals from state court decisions. By implication, § 1257 prohibits lower federal courts from hearing appeals from state court judgments. Exxon Mobil Corp. v. Saudi Basic Indus. , 544 U.S. 280, 291–92, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005). The Rooker - Feldman doctrine, one might say, thus bars federal lawsuits that amount to covert appeals of state court judgments.

The limitation, says the Court, applies 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 284, 125 S.Ct. 1517. That is a "narrow" situation, id. , so narrow the Supreme Court has applied the doctrine just twice in nearly a century, making it applicable so far just to people named Rooker or Feldman. See Skinner v. Switzer , 562 U.S. 521, 531, 131 S.Ct. 1289, 179 L.Ed.2d 233 (2011). The Court repeatedly has chastised lower federal courts for extending the doctrine "far beyond" its proper scope. Id. at 532, 131 S.Ct. 1289 (quotation omitted).

In re Smith illustrates the point. 349 F. App'x 12 (6th Cir. 2009). A state inmate filed a petition in state court against state officials, seeking DNA testing of the evidence underlying his conviction. Id. at 13. After the state court denied his petition, he filed a federal lawsuit alleging that he had a federal constitutional right to exonerating evidence and that the state officials had deprived him of that right. Id. at 15–16. Rooker - Feldman does not apply in those circumstances, we held, because the plaintiff’s injury was caused by state officials, not the state court judgment denying his petition. See Skinner , 562 U.S. at 529, 532, 131 S.Ct. 1289 (citing Smith , 349 F. App'x at 18 (Sutton, J., concurring in part and dissenting in part)). The state court merely "ratified, acquiesced in, or left unpunished" the actions of those state officials. Smith , 349 F. App'x at 18 (quotation omitted). Those actions, not the state court judgment, caused the plaintiff’s injuries.

Today’s case is not the rare one that threads the Rooker - Feldman needle. That’s true, first of all, because the rule applies only when a state court renders a judgment —when the court "investigate[s], declare[s], and enforce[s] liabilities" based on application of law to fact. Feldman , 460 U.S. at 479, 103 S.Ct. 1303 (quotation omitted). A writ of garnishment does not fit that description. A creditor may obtain one simply by filing a form with the court clerk, who then issues the writ as long as the request "appears to be correct." MCR 3.101(D). The writ that comes out of this ministerial process is not a state court judgment any more than a summons or complaint is a state court judgment. Cf. MCR 3.101(M)(2). Rooker - Feldman does not apply to "ministerial" actions by court clerks. Feldman , 460 U.S. at 479–80, 103 S.Ct. 1303 ; see, e.g. , Snyder v. Nolen , 380 F.3d 279, 289 n.10 (7th Cir. 2004).

Van Hoven’s injuries also did not arise from the writs of garnishment by themselves. They arose from costs included in them, which (she says) violated the Fair Debt Collection Practices Act. Her lawsuit targets Buckles & Buckles’ actions in tallying the amount of relief requested, not the writs of garnishment themselves. See Alexander v. Rosen , 804 F.3d 1203, 1206–07 (6th Cir. 2015). Once before, we declined to apply Rooker - Feldman in similar circumstances: a lawsuit under the Act alleging that a creditor made a false statement to obtain a garnishment order in state court. Todd v. Weltman, Weinberg & Reis Co., LPA , 434 F.3d 432, 435–37 (6th Cir. 2006). In rejecting the Rooker - Feldman defense, we explained that the plaintiff’s injuries were caused by the defendant, not the state court judgment. Id. at 437. The plaintiff had "filed an independent federal claim that [he] was injured by [the defendant] when [the defendant] filed a false affidavit." Id. The same is true here.

Buckles & Buckles pushes back, invoking Harold v. Steel , 773 F.3d 884, 885–86 (7th Cir. 2014). But the case distinguishes itself. A claimant alleged that a debt collector had made a false statement in litigation to obtain a default judgment against him. Id. at 885. The plaintiff’s injury was caused by the state court judgment, not the defendant’s actions. That’s because the plaintiff had already raised the same objections in state court and lost. Id. The resulting state court judgment prompted the plaintiff’s wages to be garnished. That made the plaintiff a "state-court loser[ ]" complaining of an injury "caused by [a] state-court judgment[ ]" against him, seeking "review and rejection" of a factual determination the state court had already made. Exxon , 544 U.S. at 284, 125 S.Ct. 1517. By contrast, Van Hoven never raised her concerns in Michigan state court. Right or wrong, Harold does not apply.

We have jurisdiction and must address the merits.

III.

Van Hoven claims that Buckles & Buckles made two types of "false, deceptive, or misleading representation[s]" under the Act when they presented their garnishment requests to the state court clerk: (1) they sought the costs of each garnishment request under Michigan law, and (2) they sought the costs of prior failed garnishments under Michigan law. 15 U.S.C. § 1692e. Quite a few questions lurk. Did Michigan law permit the included costs? If not or if it is not clear, does every misstatement of state law violate the Act? What line potentially separates covered from uncovered inaccurate statements about state law? Does it make a difference that the statements sought relief from the court clerk and were served on the debtor only to give it a chance to object (which it did not do)?

A.

Some common ground narrows things a bit. There is no exemption for lawyers. The Act applies to lawyers engaged in debt collection. Heintz v. Jenkins , 514 U.S. 291, 292, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995). The Act also applies to the content of documents filed in litigation. Marquez v. Weinstein , 836 F.3d 808, 810–11 (7th Cir. 2016) (collecting cases). And the Act at a minimum covers some misstatements about state law. Currier v. First Resolution Inv. Corp. , 762 F.3d 529, 536–37 (6th Cir. 2014). A law firm could not write a dunning letter saying that state law allows it to seize the debtor’s house within thirty days if the debt is not paid when state law says no such thing.

At the same time that the Act covers some misstatements about state law by lawyers, "Congress did not turn every violation of state law into a violation of the FDCPA." Id. at 537 ; see also Gallego v. Northland Grp., Inc. , 814 F.3d 123, 127 (2d Cir. 2016) (collecting cases). But if not always, if not never, when does a misstatement...