In Harold v. Steel,— F.3d —-, 2014 WL 6981364 (7th Cir. 2014), the Court of Appeals for the Seventh Circuit affirmed dismissal of an FDCPA suit based on the Rooker-Feldman doctrine. The facts were as follows:
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. 2014 U.S. Dist. LEXIS 43154 (S.D.Ind. Mar. 31, 2014).
The Court of Appeals affirmed, applying the Rooker-Feldman doctrine.
It is easy to imagine situations in which a violation of federal law during the conduct of state litigation could cause a loss independent of the suit’s outcome. Suesz v. Med–1 Solutions, LLC, 757 F.3d 636 (7th Cir.2014) (en banc), illustrates. The Fair Debt Collection Practices Act limits debt collectors to suits in the “judicial district or similar legal entity” where the contract was signed or the debtor resides. 15 U.S.C. § 1692i. If a debt collector violates that statute, it inflicts an injury measured by the costs of travelling or sending a lawyer to the remote court and moving for a change of venue, no matter how the suit comes out. Harold was not injured in that way, however. He complains about representations that concern the merits. If Steel’s client did not own the judgment, then Harold was entitled to a decision in his favor. No injury occurred until the state judge ruled against Harold. The need to litigate was not a loss independent of the state court’s decision; costs of litigation were inevitable whether or not Steel was telling the truth about his client’s rights—and it should be cheaper to defeat a false claim than to defeat a true one. As Harold sees things, the Rooker–Feldman doctrine does not apply to the procedures that state courts use to reach decisions or the evidence that state judges consider. This line of argument is embarrassed by the fact that Rooker itself arose from a contention that the state court (at the adverse litigant’s instigation) had used constitutionally forbidden procedures to reach its judgment. Unless Rooker were to be overruled, there could not be a “procedural exception” to the Rooker–Feldman doctrine. Federal review of the procedures or evidence used in state court would collapse the distinction between civil and criminal cases. Collateral review of state criminal judgments under 28 U.S.C. §§ 2241 and 2254 is a search for improper procedures; most substantive decisions are governed by state law and cannot be reviewed in federal court. See, e.g., Bradshaw v. Richey, 546 U.S. 74, 126 S.Ct. 602, 163 L.Ed.2d 407 (2005); Gilmore v. Taylor, 508 U.S. 333, 113 S.Ct. 2112, 124 L.Ed.2d 306 (1993); Estelle v. McGuire, 502 U.S. 62, 112 S.Ct. 475, 116 L.Ed.2d 385 (1991). If Harold were to prevail in this suit, however, federal courts could award damages every time a litigant in state court used an improper procedure or considered evidence that a federal judge does not think trustworthy. That duplication would greatly increase the already high cost of civil litigation. The Rooker–Feldman doctrine is a matter of statutory interpretation, not of constitutional command. Congress is free to authorize federal collateral review of state civil judgments—though there may be limits to how far national law can specify procedures that state courts must use, as Judge Sykes’s concurring opinion in Suesz explains, 757 F.3d at 650–55—but 15 U.S.C. § 1692e does not approach the limits of federal power. Section 1692e forbids debt collectors to tell lies but does not suggest that federal courts are to review state-court decisions about whether lies have been told. Section 1692e does not even hint that federal courts have been authorized to monitor how debt-collection litigation is handled in state courts. Section 1692i (the subject of Suesz ) authorizes federal courts to address one specific aspect of state debt-collection litigation; § 1692e lacks a parallel reference to the conduct of litigation in state courts, so the norm from the Rooker–Feldman doctrine controls.