Monday, March 15, 2010

Eleventh Circuit Holds District Court Lacked Jurisdiction Over TILA Case Based Upon Rooker-Feldman Doctrine

In Parker v. Potter (08-16332, 08-16667), the Eleventh Circuit vacated the decision of the district court and remanded for the entry of an order dismissing the action because the district court lacked jurisdiction under the Rooker-Feldman Doctrine.  The court stated:
In January 2005, a Florida court granted final judgment of foreclosure to Potter against Gary and Yolanda Parker....On February 1, 2006, Parker filed suit against Potter and Money Consultants in the District Court, seeking a restraining order to prevent the sale of the property. DE 1. The District Court dismissed the action with prejudice, Parker v. Potter, No. 8:06-CV-183-T-26EAJ, 2006 WL 1529546 (M.D. Fla. May 24, 2006) (not reported in F. Supp.) (“Parker I”), but this Court vacated and remanded the decision to afford Parker the opportunity to amend her complaint and proceed with an action for rescission under TILA and certain state law fraud claims. Parker v. Potter, 232 F. App’x 861 (11th Cir. 2007) (unpublished) (“Parker II”).
Potter avers that the Rooker-Feldman doctrine barred the District Court from reaching a decision on Parker’s claim for rescission.  Noting that a Florida court entered final judgment for foreclosure against Parker before she filed her claim for a rescission under TILA in federal court, Potter alleges that the District Court lacked jurisdiction to review, reverse, or invalidate that final state court decision.
In certain circumstances, a federal court must decline or postpone the exercise of its jurisdiction by deferring to the courts of the several states. The doctrine established by the Rooker and Feldman cases essentially holds that federal courts – other than the Supreme Court – do not have subject matter jurisdiction over “cases brought by state-court losers [(1)] complaining of injuries caused by state court judgments rendered before the [federal] district court proceedings commenced and [(2)] inviting district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). 
The Rooker-Feldman doctrine barred the District Court from hearing Parker’s claim for rescission under TILA. The same parties in this action participated in the subject state proceeding, and a Florida court granted a final judgment for foreclosure in favor of Potter against Parker.


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