United States District Court, Eastern District of Pennsylvania
JAMES MINTON, JR.
CACH, LLC and X, Y, Z CORPORATIONS
In this action brought under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692e et seq. (“FDCPA”), the plaintiff, James Minton, Jr. (“Minton”), alleges that the defendant, CACH, LLC (“CACH”), violated the FDCPA when it attempted to execute on a five-year old state court judgment which included unlawful prejudgment interest and attorney’s fees. The defendant has moved to dismiss the complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). It contends that Minton’s claims are barred by the Rooker-Feldman doctrine, res judicata and the FDCPA’s one-year statute of limitations.
We conclude that the Rooker-Feldman doctrine bars Minton’s claims; and, if it did not, Pennsylvania preclusion law would. Therefore, we shall grant the motion to dismiss.
On November 20, 2008, CACH filed suit against Minton in the Common Pleas Court of Bucks County, Pennsylvania for money due on an account. CACH had purchased the account, a consumer debt, from Direct Merchants Bank, the original creditor. At the time the account was charged-off on February 27, 2007, there was a balance of $9, 870.10.
In his complaint in this action,  Minton claims that CACH, who did not purchase the account until April 2, 2007, improperly demanded retroactive contractual interest because Direct Merchants Bank had waived the right to add interest above the statutory rate when it stopped sending monthly statements to Minton after the account was charged-off. Minton alleges that CACH violated the FDCPA when it misstated the amount owed by including the unlawful interest, attempted to collect money that it was not owed, and included $1, 200 in attorney’s fees that were not incurred and were unreasonable.
On April 2, 2009, the state court entered a default judgment in an amount that included the alleged unlawful interest and attorney’s fees. Minton did not file a motion to open or strike the default judgment or appeal it in the state court. In April of 2014, CACH attempted to execute on the default judgment. Minton claims that this attempt was itself a violation of the FDCPA because the judgment amount included “unlawful interest.”
In moving to dismiss the complaint, the defendant argues that this action is nothing more than an attack on the state court judgment. It contends that the federal action is barred by the Rooker-Feldman doctrine.
The Rooker-Feldman doctrine bars a federal court from entertaining “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.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). In short, a federal district court lacks subject matter jurisdiction over an action in the nature of an appeal seeking to reverse a state court decision. See id. at 293.
As the Supreme Court has made clear, the doctrine is narrowly applied in limited circumstances. Exxon Mobil, 544 U.S. at 292. The doctrine is not implicated “simply because a party attempts to litigate in federal court a matter previously litigated in state court.” Id. at 293. It does not apply when the federal plaintiff asserts an independent claim, even one that denies the state court’s legal conclusions. Id.
The Rooker-Feldman doctrine applies only where: (1) the plaintiff in the federal action lost in state court; (2) the plaintiff complains of injuries caused by the state court judgment; (3) the judgment was entered before the federal action was filed; and (4) the plaintiff seeks federal review and rejection of the state judgment. Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 166 (3d Cir. 2010) (citing Exxon Mobil, 544 U.S. at 284). Factors two and four have been characterized as substantive; and one and three, procedural. Hoblock v. Albany Cnty. Bd. of Elections, 422 F.3d 77, 85 (2d Cir. 2005). The procedural posture will rarely be at issue. See Id . at 89. The factors that typically drive the inquiry are two and four, the substantive ones. They are key to determining whether a federal suit brought by a state court loser is barred by the doctrine or presents a non-barred independent claim. Id. at 85-87.
There is no dispute that factors one and three are satisfied here. A judgment was entered against Minton in the state court action, five years before he filed this federal action. Therefore, we now consider whether his complaint seeks redress for an injury caused by the state court’s judgment ...