In Cannon v. Spokane Merchants Ass’n, 2011 WL 3754697 (E.D.Wash. 2011), Judge Suko found an absence of federal jurisdiction under the Rooker-Feldman doctrine to hear Plaintiff’s FDCPA claim based on the manner in which the debt collector had obtained the underlying state court judgment on the debt.
The Ninth Circuit has since held that Rooker–Feldman does still apply to bar a de facto appeal from a state court decision, even when the plaintiff does not directly contest the merits of the state court decision. A de facto appeal exists where “ ‘adjudica-tion of the federal claims would undercut the state court ruling or require the district court to interpret the application of state laws or procedural rules.’ “ Reusser v. Wachovia Bank, N.A., 525 F.3d 855, 859 (9th Cir.2008) (quoting Bianchi v. Rylaarsdam, 334 F.3d 895, 898 (9th Cir.2003). ¶ For a plaintiff’s claim to be barred by Rooker Feldman under Exxon and applicable Ninth Circuit law, the following questions must be answered af-firmatively: (1) Is the plaintiff a “state-court” loser? (2) Did the state court decision cause the injury for which plaintiff seeks relief in federal court? and (3) Is the plaintiff asking the district court to review and reject a state court judgment either as a direct or de facto appeal? ¶ Plaintiff can properly be characterized as a “state-court loser.” Under Washington law, a dismissal with prejudice is a final judgment on the merits for the purpose of res judicata. Ensley v. Pitcher, 152 Wn.App. 891, 222 P.3d 99 (2009). Courts in other circuits have found that court approved settlement agreements may constitute final decisions for the purposes of Rooker–Feldman. Aguilera v. Freedman, Anselmo, Lindberg & Rappe, LLC, 2011 WL 2292302 (N.D.Ill.2011) (Plaintiff who had settled debt collection in state court could not bring FDCPA claim in federal court); Reyes v. Fairfield Properties, 661 F.Supp.2d 249, 273 (E.D.N.Y) (Effectively setting aside judgment based on stipulation of settlement). Green v. City of New York, 438 F.Supp.2d 111 (E.D.N.Y.2006). Plaintiff contends that the dismissal was not a final judgment on the merits and there was no settlement agreement. To the contrary, the parties entered an agreed order to vacate the judgment against Plaintiff at trial, which was contingent on payment of the judgment, after which the case was dismissed with prejudice. The most reasonable interpretation of these judgments by the Spokane County District Court is that Plaintiff paid the original judgment in exchange for Defendant agreeing to dismiss the case against her. The Dismissal With Prejudice effectively approves this agreement and is a final judgment on the merits for purposes of Rooker–Feldman doctrine. ¶ Plaintiff’s is seeking relief from injury caused by the state court judgment. There was a final judgment on the merits in this case. Plaintiff’s only injuries are the payment of debt she alleged she did not owe and any effort and expense incurred defending against the claims made against her. Her decision to settle the underlying state court case resolved any claims for relief based on those injuries. ¶ Plaintiff is effectively asking this court to review and reject a state court judgment. Plaintiff is not asking this court to directly review the merits of the underlying debt, which was settled by the state court action, but Plaintiff’s FDCPA claim is inextricably intertwined with the underlying state court decision, and review by this court would be a de facto appeal. Because the only injuries suffered by Plaintiff stem from the underlying case, which was dismissed with prejudice, any decision in Plaintiff’s favor in this action would effectively overturn the Spokane County District Court’s ruling.