KEVIN L. HAROLD, Plaintiff-Appellant,
CHRISTOPHER C. STEEL and PETERS & STEEL, LLC, Defendants-Appellees
Argued: November 12, 2014.
Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:13-cv-0173-TWP-DML -- Tanya Walton Pratt, Judge.
For KEVIN L. HAROLD, Plaintiff - Appellant: Robert E. Duff, Attorney, INDIANA CONSUMER LAW GROUP, Lebanon, IN.
For CHRISTOPHER C. STEEL, PETERS & STEEL, LLC, Defendants - Appellees: Mark D. Gerth, Attorney, Nicholas W. Levi, Attorney, KIGHTLINGER & GRAY LLP, Indianapolis, IN.
Before EASTERBROOK, MANION, and SYKES, Circuit Judges.
Easterbrook, Circuit Judge. A small claims court in Marion County, Indiana, entered a judgment against Kevin Harold for a little more than $1,000. He did not pay, even though he had agreed to the judgment's entry. Almost two decades later Christopher Steel, claiming to represent the judgment creditor, asked the court to garnish Harold's wages. It entered the requested order, which Harold moved to vacate, contending that Steel had misrepresented the judgment creditor's identity (transactions after the judgment's entry may or may not have transferred that asset to a new owner) and did not represent the only entity authorized to enforce the judgment. But he did not contend that the request was untimely. After a hearing, a state judge sided with Steel and maintained the garnishment order in force. Instead of seeking review within Indiana's judiciary, Harold filed this federal suit under the Fair Debt Collection Practices Act, contending that Steel and his law firm (Peters & Steel, LLC, which we do not mention again) had violated 15 U.S.C. § 1692e by making false statements. But the district court dismissed the suit for want of subject-matter jurisdiction, ruling that it is barred by the Rooker-Feldman
doctrine because it contests the state court's decision.
More than a decade ago, this court held in Epps v. Creditnet, Inc., 320 F.3d 756 (7th Cir. 2003), that the Rooker-Feldman doctrine bars federal suits seeking to recover on a theory that a debt collector made false statements during state litigation. The facts of Epps are similar to those of this case, right down to the location of the state suit: a small-claims court in Marion County, Indiana. The only differences are that the supposed misrepresentations in Epps concerned the amount of damages rather than the creditor's identity, and that Epps dropped his § 1692e claim on appeal and relied on a state-law theory under the supplemental jurisdiction. The abandonment of the § 1692e claim in Epps raises the possibility that this strategic choice affected federal jurisdiction. Harold maintains that it does, relying on Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005). But three years after Exxon Mobil this court applied the approach of Epps to a claim under the Fair Debt Collection Practices Act. See Kelley v. Med-1 Solutions, LLC, 548 F.3d 600 (7th Cir. 2008). Harold wants us to overrule Kelley and Epps.
Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983), hold that the Supreme Court of the United States is the only federal court that may review judgments entered by state courts in civil litigation. The Rooker-Feldman doctrine applies when the state court's judgment is the source of the injury of which plaintiffs complain in federal court. See Exxon Mobil, 544 U.S. at 293; GASH Associates v. Rosemont, 995 F.2d 726, 729 (7th Cir. 1993). Harold insists, however, that the doctrine does not apply to interlocutory decisions by state tribunals; he maintains that these may be reviewed by federal district courts.
Why not? Nothing in the Supreme Court's decisions suggests that state-court decisions too provisional to deserve review within the state's own system can be reviewed by federal district and appellate courts. The principle that only the Supreme Court can review the decisions by the state judiciary in civil litigation is as applicable to interlocutory as to final state-court decisions. A truly interlocutory decision should not be subject to review in any court; review is deferred until the decision is final.
We recognize that the courts of appeals disagree about the issue. Compare Pieper v. American Arbitration Association, Inc., 336 F.3d 458, 461-62 (6th Cir. 2003) (applying Rooker-Feldman to a federal suit challenging an interlocutory order); Kenman Engineering v. Union, 314 F.3d 468, 474 (10th Cir. 2002) (same); Brown & Root, Inc. v. Breckenridge, 211 F.3d 194, 199 (4th Cir. 2000) (same); and Port Authority Police Benevolent Association, Inc. v. Port Authority of New York, 973 F.2d 169, 178-79 (3d Cir. 1992) (same); with Cruz v. Melecio, 204 F.3d 14, 21 n.5 (1st Cir. 2000) ( Rooker-Feldman doctrine is limited to final judgments); Green v. Mattingly, 585 F.3d 97, 102 (2d Cir. 2009) (same, but in dictum). Our decision in Mehta v. Attorney Registration and Disciplinary Commission, 681 F.3d 885, 887 (7th Cir. 2012), does not choose sides; instead we observed that the state decision in question was final. Nor need we resolve the question in this case, again because the decision is final. United States v. Kollintzas, 501 F.3d 796, 801-02 (7th Cir. 2007), and United States v. Sloan, 505 F.3d 685, 687 (7th Cir. 2007), are among many opinions holding that garnishment orders enforcing a judgment are final and appealable. Indiana follows the same approach. Tipton v. Flack, 149 Ind.App. 129, 134, 271 N.E.2d 185 (1971).
Harold maintains that his claim is independent of the state court's decision and thus outside the scope of the Rooker-Feldman doctrine under Exxon Mobil, which holds that the doctrine applies only when the state court has caused the injury of which the federal suit complains. If the state court just failed to remedy an injury that predated the litigation (or is independent of it), the Court held, the federal district judge should apply principles of issue and claim preclusion under 28 U.S.C. § 1738 rather than dismiss for want of jurisdiction--and under Indiana law decisions of small claims courts do not have issue-preclusive effect. See Geico Insurance Co. ...