Butcher v. Wendt ( 2020 )

19-224
Butcher v. Wendt
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3
4 August Term, 2019
5
6 (Argued: March 10, 2020 Decided: September 22, 2020)
7
8 Docket No. 19-224-cv
9
10 _____________________________________
11
12 GEORGE H. BUTCHER III,
13
14 Plaintiff-Appellant,
15
16 v.
17
18 BRADLEY W. WENDT, RICK FITZGERALD, MICHAEL D. CASSELL, JOSEPH
19 FARNETI,
20
21 Defendants-Appellees.
22
23 _____________________________________
24
25 Before:
26
27 RAGGI, LOHIER, and MENASHI, Circuit Judges.
28
29 George Butcher III, pro se, appeals from a judgment of the United States
30 District Court for the Southern District of New York (Schofield, J.) dismissing his
31 complaint under the Rooker-Feldman doctrine and for failure to state a claim.
32 We decline to address the applicability of the Rooker-Feldman doctrine to
33 Butcher’s claims and AFFIRM the dismissal of his claims on the merits.
34
35 Judge Menashi concurs in part and concurs in the judgment in a separate
36 opinion.
1 GEORGE H. BUTCHER III, pro se, New Rochelle, NY.
2
3 DANIEL L. MILLMAN, Daniel L. Millman, P.C., Jericho,
4 NY, for Defendant-Appellee Bradley W. Wendt.
5
6 Rick Fitzgerald, pro se, Orlando, FL.
7
8 MICHAEL D. CASSELL, pro se, Hogan & Cassell, LLP,
9 Jericho, NY.
10
11 DAVID LAWRENCE III, Assistant Solicitor General
12 (Barbara D. Underwood, Solicitor General, Anisha S.
13 Dasgupta, Deputy Solicitor General, on the brief), for
14 Letitia James, Attorney General of the State of New
15 York, New York, NY, for Defendant-Appellee Joseph
16 Farneti.
17
18 LOHIER, Circuit Judge:
19 George Butcher III, pro se, appeals from a judgment of the United States
20 District Court for the Southern District of New York (Schofield, J.) dismissing his
21 complaint in part under the Rooker-Feldman 1 doctrine and in part under Rule
22 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim under
23 the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.
24 §§ 1962(c), (d), as well as 42 U.S.C. § 1983. Butcher alleged that the individual
25 defendants—former employees of Butcher’s company, a lawyer for one of the
1D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983); Rooker v. Fidelity Tr. Co., 263
U.S. 413 (1923).
2
1 employees, and a New York Supreme Court justice—conspired against him in
2 arbitration and judicial proceedings arising out of an employee compensation
3 dispute.
4 We affirm the dismissal of all the claims under Rule 12(b)(6), without
5 addressing the dismissal in part under the Rooker-Feldman doctrine.
6 BACKGROUND
7 At all times relevant to this litigation, Butcher was the Chairman and Chief
8 Executive Officer of the BondFactor Company. In April 2010 BondFactor hired
9 Bradley Wendt to be its president. After some negotiation, Wendt’s employment
10 contract provided for a base compensation of $1.2 million, which would accrue
11 each year and vest when the company received a $10 million capital infusion.
12 Until that time, Wendt was entitled to a minimum salary of $28,000. By May
13 2013 the initial capital infusion of $10 million had occurred, and Wendt’s accrued
14 base compensation was fully vested. In July 2013, however, Butcher and
15 BondFactor amended employee contracts to delay payment of unpaid vested
16 compensation until the company had raised $500 million. Although Wendt
3
1 objected to adding the new $500 million infusion target to his contract, he
2 eventually signed the amended contract.
3 Rick Fitzgerald was hired as BondFactor’s managing director in 2011 with
4 a base compensation of $250,000, which accrued annually and was set to vest
5 upon a capital infusion of $20 million. Fitzgerald elected to forgo a minimum
6 salary in exchange for reimbursements for weekly travel between New York and
7 Fitzgerald’s home in Florida.
8 Wendt and Fitzgerald soon began to complain about their compensation,
9 and both were fired in November 2013. They started an arbitration proceeding
10 against BondFactor and Butcher, raising several claims relating to their
11 employment and compensation. In a partial final award entered in February
12 2015, the arbitrator dismissed all of Wendt’s claims and several of Fitzgerald’s
13 claims. As for Fitzgerald’s claim under the Fair Labor Standards Act (FLSA) and
14 his contractual claim that BondFactor improperly refused to reimburse his travel
15 expenses, however, the arbitrator awarded Fitzgerald $156,459.76 plus attorneys’
16 fees, for which Butcher and BondFactor were jointly and severally liable. In May
4
1 2015 the arbitrator issued a final award that determined the amount of
2 Fitzgerald’s attorneys’ fees.
3 Having lost, Wendt challenged the arbitrator’s decision in State Supreme
4 Court under Article 75 of New York’s Civil Practice Law and Rules. 2 Justice
5 Joseph Farneti, a defendant in this litigation, presided over the action. Attorney
6 Michael Cassell, another defendant in this litigation, represented Wendt in the
7 Article 75 proceeding. Butcher and BondFactor principally moved to dismiss the
8 petition as untimely, but Justice Farneti denied the motion, concluding that the
9 time for filing the petition began to run upon entry of the final award in May
10 2015 rather than the partial award in February. Turning to the merits, Justice
11 Farneti vacated the arbitration award. He explained that the 2013 amendment to
12 Wendt’s contract violated New York public policy because it increased the
13 capital infusion target upon which Wendt’s base compensation would vest after
14 the original infusion target had already been reached. Butcher and BondFactor
15 appealed Justice Farneti’s decision. The New York State Appellate Division
16 reversed Justice Farneti’s judgment, concluding that Wendt’s petition should
2Article 75 governs arbitration proceedings in New York State and contains a provision
permitting a party to bring an action in state court to vacate or modify an arbitration
award. See N.Y. C.P.L.R. § 7511.
5
1 have been dismissed as untimely. Wendt v. BondFactor Co., 94 N.Y.S.3d 134 (2d
2 Dep’t 2019).
3 In October 2016 Wendt and Fitzgerald, represented by Cassell, filed a
4 lawsuit in the Southern District of New York claiming that Butcher had retaliated
5 against them in violation of the federal Dodd-Frank Act. The district court
6 dismissed the complaint as barred under the doctrine of res judicata because
7 Wendt and Fitzgerald could have raised their retaliation claims in the earlier
8 arbitration. See Wendt v. BondFactor Co., No. 16 Civ. 7751 (DLC), 2017 WL
9 3309733, at *7 (S.D.N.Y. Aug. 2, 2017).
10 In October 2017, while Butcher’s appeal to the Appellate Division was still
11 pending, Butcher filed this action in federal court alleging that Wendt,
12 Fitzgerald, Cassell, and Justice Farneti conspired to defraud him and to deprive
13 him of his due process rights in the Article 75 proceeding, in violation of RICO,
14 18 U.S.C. § 1962(c), (d), and 42 U.S.C. § 1983. In his second amended federal
15 complaint, Butcher alleged that Wendt and Fitzgerald made a number of false
16 statements that were designed to manufacture a future lawsuit against
17 BondFactor, that Wendt and Fitzgerald conspired to testify falsely during the
18 arbitration proceedings, and that attorney Cassell knowingly filed false
6
1 statements in the Article 75 proceeding and the Dodd-Frank lawsuit. Butcher
2 also alleged that, as early as December 2014, well prior to entry of the final
3 arbitration award, Wendt, Fitzgerald, Cassell, and Justice Farneti were already
4 conspiring to vacate the award. Wendt and Cassell delayed filing the Article 75
5 proceeding, Butcher claimed, “to facilitate the selection of Farneti as the
6 presiding officer.” App’x at 308. Finally, Butcher asserted that Wendt and
7 Cassell must have bribed Justice Farneti to rule in Wendt’s favor.
8 The District Court held that the Rooker-Feldman doctrine deprived it of
9 subject matter jurisdiction over Butcher’s RICO claims related to Wendt’s
10 compensation and certain claims arising from the Article 75 proceeding. It
11 dismissed Butcher’s remaining claims on the merits for failure to state a claim. It
12 was after the District Court dismissed Butcher’s complaint that the New York
13 Appellate Division reversed Justice Farneti’s judgment. See supra at 6.
14 This appeal followed.
15 DISCUSSION
16 I
17 Butcher first argues that the District Court improperly relied on the
18 Rooker-Feldman doctrine to dismiss his claims related to Wendt’s compensation
7
1 for lack of jurisdiction while an appeal of Justice Farneti’s judgment in the Article
2 75 proceeding was pending. We conclude that these claims, like the others in
3 Butcher’s complaint, were properly dismissed for failure to state a claim and,
4 therefore, we affirm on a different basis from that relied on by the District Court.
5 See Wells Fargo Advisors, LLC v. Sappington, 884 F.3d 392, 396 n.2 (2d Cir.
6 2018).
7 We review de novo the dismissal of Butcher’s claims under Federal Rule of
8 Civil Procedure 12(b)(6). See Fink v. Time Warner Cable, 714 F.3d 739, 740 (2d
9 Cir. 2013). “[A] complaint must contain sufficient factual matter, accepted as
10 true, to state a claim to relief that is plausible on its face,” Ashcroft v. Iqbal, 556
11 U.S. 662, 678 (2009) (quotation marks omitted), and that “raise[s] a right to relief
12 above the speculative level,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
13 All of Butcher’s claims against Justice Farneti are for money damages and
14 arise out of acts or omissions taken in his judicial capacity related to the Article
15 75 proceeding over which he presided. “It is well settled that judges generally
16 have absolute immunity from suits for money damages for their judicial actions.”
17 Bliven v. Hunt, 579 F.3d 204, 209 (2d Cir. 2009). Because Butcher’s claims against
8
1 Justice Farneti are barred by absolute judicial immunity, they were correctly
2 dismissed under Rule 12(b)(6).
3 The District Court also correctly dismissed Butcher’s RICO and § 1983
4 claims against Wendt, Fitzgerald, and Cassell. To state a claim of a substantive
5 RICO violation under § 1962(c), a plaintiff must allege, among other things, two
6 or more predicate acts “constituting a pattern” of “racketeering activity.”
7 Will. v. Affinion Grp., LLC, 889 F.3d 116, 124 (2d Cir. 2018) (quotation marks
8 omitted). Those predicate acts must be the “proximate cause” of the alleged
9 injury. Empire Merchs., LLC v. Reliable Churchill LLLP, 902 F.3d 132, 140 (2d
10 Cir. 2018) (quotation marks omitted). To state a claim for RICO conspiracy under
11 § 1962(d), the plaintiff must also “allege the existence of an agreement to violate
12 RICO’s substantive provisions.” Williams, 889 F.3d at 124 (quotation marks
13 omitted). And “[t]o state a claim against a private entity on a section 1983
14 conspiracy theory, the complaint must allege facts demonstrating that the private
15 entity acted in concert with the state actor to commit an unconstitutional act.”
16 Ciambriello v. County of Nassau, 292 F.3d 307, 324 (2d Cir. 2002) (quotation
17 marks omitted).
9
1 Butcher’s allegations in support of his conspiracy claims of a corrupt
2 agreement between the private defendants and Justice Farneti are uniformly
3 conclusory, speculative, and implausible. See id., at 324; Betts v. Shearman, 751
4 F.3d 78, 84 n.1 (2d Cir. 2014). Notably, his barebones claim of a conspiracy
5 involving Justice Farneti—that Wendt knew that Justice Farneti would preside
6 over the proceedings over a year before those proceedings commenced, and that
7 Wendt, Fitzgerald, and Cassell began to conspire with Justice Farneti well before
8 the final arbitral award—is unaccompanied by any factual allegation to support
9 it. We agree with the District Court that Butcher’s allegations of a corrupt
10 agreement, which rest on rank speculation, are inadequate to support his
11 conspiracy claims under RICO and § 1983.
12 Butcher’s substantive RICO claim fares no better. We recently explained
13 that “allegations of frivolous, fraudulent, or baseless litigation activities—
14 without more—cannot constitute a RICO predicate act.” Kim v. Kimm, 884
15 F.3d 98, 104 (2d Cir. 2018). For that reason, we conclude that Butcher’s
16 allegations that the private defendants made false statements in their various
17 filings and in the course of testifying in the arbitration and Article 75 proceedings
18 cannot support a claim of a substantive RICO violation. Butcher’s allegations
10
1 that Wendt and Fitzgerald sent fraudulent emails during their employment with
2 BondFactor do not constitute a pattern of racketeering activity for the separate
3 reason that Butcher failed to allege that the emails proximately caused any of his
4 injuries. See Empire Merchs., LLC, 902 F.3d at 140. Butcher did not allege that
5 either the arbitrator or Justice Farneti relied on the emails as a basis for their
6 rulings in favor of Fitzgerald and Wendt. They relied instead on a legal analysis
7 under the FLSA and New York public policy, the undisputed fact that Fitzgerald
8 did not receive any salary during his employment with BondFactor, and the
9 initial vesting target under Wendt’s contract, which Butcher admitted was met.
10 Accordingly, we affirm the District Court’s judgment on the ground that
11 Butcher’s complaint failed to state any claim on which relief could be granted.
12 II
13 A side note. Our concurring colleague says that we should have fully
14 grappled with the Rooker-Feldman doctrine before reaching the merits because it
15 is a jurisdictional bar that we cannot avoid. Our refusal to address the doctrine
16 as a threshold jurisdictional issue, he insists, contravenes Steel Co. v. Citizens for
17 a Better Environment, 523 U.S. 83 (1998).
11
1 To the contrary, resolving this appeal on the merits is in step with both our
2 precedent and Steel Co. In Steel Co., the Supreme Court instructed that we could
3 not assume hypothetical jurisdiction over questions of Article III jurisdiction, as
4 had been the practice. “For a court to pronounce upon the meaning or the
5 constitutionality of a state or federal law when it has no jurisdiction to do so is,
6 by very definition, for a court to act ultra vires.” Id. at 101–02. But the Court’s
7 holding in Steel Co. was limited to standing under Article III (that is,
8 constitutional standing), which it distinguished from “statutory standing.” Id. at
9 97; see also, e.g., id. at 93 (disapproving of the resolution of “cause-of-action
10 questions . . . where there is no genuine case or controversy” under Article III).
11 We have consistently kept faith with Steel Co.’s focus on Article III
12 jurisdiction. “The bar on hypothetical jurisdiction,” we have held, “applies only
13 to questions of Article III jurisdiction.” Moore v. Consol. Edison Co. of N.Y., Inc.,
14 409 F.3d 506, 511 n.5 (2d Cir. 2005). So “where the potential lack of jurisdiction is
15 a constitutional question,” we decide the question. Monegasque De
16 Reassurances S.A.M. v. Nak Naftogaz of Ukraine, 311 F.3d 488, 497 (2d Cir. 2002)
17 (quotation marks omitted). By contrast, we may assume hypothetical
18 jurisdiction where the jurisdictional issue is statutory in nature. See Doyle v. U.S.
12
1 Dep’t of Homeland Sec., 959 F.3d 72, 79 (2d Cir. 2020); Vera v. Banco Bilbao
2 Vizcaya Argentaria, S.A., 946 F.3d 120, 137 n.22 (2d Cir. 2019); Ahmed v. Holder,
3 624 F.3d 150, 154–55 (2d Cir. 2010); Abimbola v. Ashcroft, 378 F.3d 173, 180 (2d
4 Cir. 2004); United States v. Miller, 263 F.3d 1, 4 n.2 (2d Cir. 2001). 3 If, as here,
5 “the jurisdictional constraints are imposed by statute, not the Constitution,” we
6 have found it particularly prudent to assume hypothetical jurisdiction “where
7 the jurisdictional issues are complex and the substance of the claim is . . . plainly
8 without merit.” Ivanishvili v. U.S. Dep’t of Justice, 433 F.3d 332, 338 n.2 (2d Cir.
9 2006). 4
10 The Rooker-Feldman doctrine does not raise a question of Article III
11 jurisdiction, and no circuit court has ever seriously claimed that the doctrine has
12 constitutional status under Article III. The doctrine instructs that district courts
3 We routinely and appropriately assume hypothetical jurisdiction in summary orders.
See, e.g., Jang v. Tr. of St. Johnsbury Academy, 771 F. App’x 86, 87 (2d Cir. 2019);
Palaguachi v. Whitaker, 755 F. App’x 81, 84 (2d Cir. 2018). We have done so in cases in
which the Rooker-Feldman doctrine is invoked. See, e.g., Yeshiva Imrei Chaim Viznitz
of Boro Park, Inc. v. City of New York, 496 F. App’x 122, 124 (2d Cir. 2012); Saferstein v.
Lawyers’ Fund for Client Prot., 223 F. App’x 39, 40 (2d Cir. 2007).
4 Our concurring colleague observes that subsequent decisions found the statutory
limitations at issue in certain of the cited cases to be non-jurisdictional in nature. But
that misses the point. These cases show that the Second Circuit has not hesitated to
assume hypothetical statutory jurisdiction in rejecting plainly meritless claims. In doing
so in these cases, the panels were not acting on any assumption that the statutory
question would be found not to be jurisdictional in the future.
13
1 lack subject-matter jurisdiction over “cases brought by state-court losers
2 complaining of injuries caused by state-court judgments rendered before the
3 district court proceedings commenced and inviting district court review and
4 rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp.,
5 544 U.S. 280, 284 (2005). Rooker-Feldman thus “bars a losing party in state court
6 from seeking what in substance would be appellate review of the state court
7 judgment in a United States district court, based on the losing party’s claim that
8 the state judgment itself violates the loser’s federal rights.” Id. at 287 (quotation
9 marks omitted).
10 The doctrine’s roots lie in two jurisdictional statutes, 28 U.S.C. § 1257, in
11 which Congress granted appellate jurisdiction to the Supreme Court over certain
12 final judgments of a State’s highest court, and 28 U.S.C. § 1331, which provides
13 that federal “district courts shall have original jurisdiction of all civil actions
14 arising under the Constitution, laws, or treaties of the United States.” See id., 544
15 U.S. at 283–86 (2005); D.C. Court of Appeals v. Feldman, 460 U.S. 462, 476 (1983);
16 Rooker v. Fidelity Tr. Co., 263 U.S. 413, 416 (1923); McKithen v. Brown, 481 F.3d
17 89, 96 (2d Cir. 2007); Hoblock v. Albany Cty. Bd. of Elections, 422 F.3d 77, 85 (2d
18 Cir. 2005). In Feldman, the Supreme Court explained that “appellate jurisdiction
14
1 to reverse or modify a state-court judgment is lodged . . . exclusively in” the
2 Supreme Court by 28 U.S.C. § 1257. Exxon Mobil Corp., 544 U.S. at 283 (citing
3 Feldman, 460 U.S. 462). 28 U.S.C. § 1331, on the other hand, “is a grant of
4 original jurisdiction, and does not authorize district courts to exercise appellate
5 jurisdiction over state-court judgments.” Id. at 292. Thus, “[i]f, instead of
6 seeking review of an adverse state supreme court decision in the Supreme Court,
7 [plaintiffs] sued in federal district court, the federal action would be an attempt
8 to obtain direct review of the state supreme court decision and would represent a
9 partial inroad on Rooker-Feldman’s construction of 28 U.S.C. § 1257.” Id. at 287
10 (quotation marks omitted). As a reflection of the doctrine’s statutory rather than
11 constitutional origins, there is no jurisdictional bar that prevents Congress from
12 reversing course and giving the lower federal courts appellate jurisdiction over
13 the same state court judgments. What Congress gives, Congress can later
14 modify.
15 The concurrence attempts to distinguish or sideline the long line of cases in
16 which we have assumed hypothetical jurisdiction. While this Court has
17 appropriately assumed jurisdiction in some circumstances, the concurrence
18 asserts, we have been “more hesitant” to do so when “faced with plainly
15
1 jurisdictional limitations.” See post 9–12. But the cases cited by the concurrence
2 in support of this view are inapposite; unlike this case, they involved a
3 straightforward jurisdictional issue or a potentially complicated merits question,
4 or they addressed Article III rather than statutory jurisdiction. See United States
5 ex rel. Hanks v. United States, 961 F.3d 131, 138 (2d Cir. 2020) (noting that the
6 statutory jurisdictional question was “relatively straightforward”); Ventura de
7 Paulino v. N.Y.C. Dep’t of Educ., 959 F.3d 519, 530 n.45 (2d Cir. 2020)
8 (acknowledging that there exists a “discretionary exception to Steel Co.”
9 allowing a court to “dispose of the case on the merits without addressing a novel
10 question of jurisdiction”); C. Hudson Gas & Elec. Corp. v. FERC, 783 F.3d 92,
11 108–119 (2d Cir. 2015) (offering no suggestion that the substance of the claims
12 was plainly without merit); ProShipLine, Inc. v. Aspen Infrastructures, Ltd., 585
13 F.3d 105, 113 n.7 (2d Cir. 2009) (noting its intention to address whether the court
14 had Article III jurisdiction).
15 Our established practice of assuming hypothetical statutory jurisdiction is
16 not unique. The majority of our sister circuits have assumed jurisdiction under
17 similar circumstances in the wake of Steel Co. See, e.g., Am. Hosp. Ass’n v. Azar,
18 964 F.3d 1230, 1246 (D.C. Cir. 2020); United States v. Olson, 867 F.3d 224, 228 (1st
16
1 Cir. 2017); Montague v. NLRB, 698 F.3d 307, 313 (6th Cir. 2012); Minesen Co. v.
2 McHugh, 671 F.3d 1332, 1337 (Fed. Cir. 2012); Jordon v. Att’y General of U.S., 424
3 F.3d 320, 327 n.8 (3d Cir. 2005); Lukowski v. INS, 279 F.3d 644, 647 n.1 (8th Cir.
4 2002).
5 In summary, we may assume hypothetical statutory jurisdiction in order to
6 resolve this appeal on the merits because the Rooker-Feldman doctrine does not
7 implicate Article III jurisdiction. Doing so is particularly appropriate in this case,
8 where the jurisdictional issue is both novel and arguably complex, while
9 Butcher’s claims are plainly meritless. 5
5We have never addressed whether the Rooker-Feldman doctrine applies where, as
here, there is a pending state appeal. District court decisions in our circuit show that
this question may not be as easily answered as our concurring colleague suggests, for
reasons stated by our colleague Judge Bianco when he was sitting on the district court.
See Dekom v. Fannie Mae, No. 17-CV-2712, 2019 WL 1403116, at *2 (E.D.N.Y. Mar. 28,
2019); Caldwell v. Gutman, Mintz, Baker & Sonnenfeldt, P.C., 701 F. Supp. 2d 340, 347–
48 (E.D.N.Y. 2010). Indeed, district judges within our circuit that have grappled with
this issue have concluded that Rooker-Feldman applies even where there is a pending
state appeal of the challenged judgment. See Gribbin v. N.Y. State Unified Court Sys.,
No. 18-CV-6100 (PKC), 2020 WL 1536324, at *3 n.6 (E.D.N.Y. Mar. 31, 2020); Campbell v.
Bank of Am., N.A., No. 19-CV-11 (VB), 2019 WL 4083078, at *4 (S.D.N.Y. Aug. 29, 2019);
Zapotocky v. CIT Bank, N.A., 587 B.R. 589, 596 (S.D.N.Y. 2018); Deraffele v. City of New
Rochelle, No. 15-CV-282 (KMK), 2016 WL 1274590, at *7 (S.D.N.Y. Mar. 30, 2016).
Although there is contrary authority from our sister circuits that supports a conclusion
that Rooker-Feldman does not pertain to these circumstances, see, e.g., Parker v. Lyons,
757 F.3d 701, 705-06 (7th Cir. 2014) (collecting cases), this Court has strongly
suggested—without deciding—that it does. See generally Vossbrinck v. Accredited
Home Lenders, Inc., 773 F.3d 423, 426 & n.1 (2d Cir. 2014). Rather than address this
17
1 CONCLUSION
2 For the foregoing reasons, Butcher’s complaint failed to plausibly allege
3 RICO violations or a § 1983 conspiracy. The judgment of the District Court is
4 AFFIRMED.
issue—one of first impression for our Court—we affirm the dismissal of Butcher’s
claims under Rule 12(b)(6), as that result is foreordained by well-established circuit
precedent. See Moore, 409 F.3d at 511 n.5 (assuming jurisdiction to resolve appeal
where statutory standing question “remain[ed] unresolved in this Circuit”); Vera, 946
F.3d at 137 n.22 (explaining that “it would be ironic if, in our desire to avoid rendering
an advisory opinion, we were to address a novel jurisdictional question in a case where
the result is foreordained by another decision of this Court” (quotation marks and
brackets omitted)). We need not pursue the matter here where we can easily affirm on
another, clearly established ground.
18
MENASHI, Circuit Judge, concurring in part and concurring in the
judgment:
I do not agree with the court that “we may assume hypothetical
jurisdiction where the jurisdictional issue is statutory in nature.” Ante
at 12. I write separately to express my view that we should not
sidestep questions of subject-matter jurisdiction. After considering
the jurisdictional question here, I conclude that we have jurisdiction
over Butcher’s appeal and may reach the merits of his claims.
Accordingly, I concur in the part of the court’s opinion that dismisses
Butcher’s claims under Rule 12(b)(6) and concur in the judgment.
Federal courts, such as ours, “are courts of limited jurisdiction.
They possess only that power authorized by Constitution and statute,
which is not to be expanded by judicial decree.” Kokkonen v. Guardian
Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (internal citations omitted).
Because of this basic principle, the Supreme Court has squarely
rejected the practice of “‘assuming’ jurisdiction for the purpose of
deciding the merits—the ‘doctrine of hypothetical jurisdiction’”—
because it “carries the courts beyond the bounds of authorized
judicial action and thus offends fundamental principles of separation
of powers.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998).
In Steel Co., the Supreme Court made clear that “[t]he statutory
and (especially) constitutional elements of jurisdiction are an essential
ingredient of separation and equilibration of powers, restraining the
courts from acting at certain times, and even restraining them from
acting permanently regarding certain subjects.” Id. at 101.
Accordingly, for a court “to resolve contested questions of law when
its jurisdiction is in doubt” is, “by very definition, for a court to act
ultra vires.” Id. at 101-02.
 Despite this precedent, our court has continued to employ the
doctrine of hypothetical jurisdiction to bypass questions of “statutory
jurisdiction.” See, e.g., Fama v. Comm’r of Corr. Servs., 235 F.3d 804, 816
n.11 (2d Cir. 2000). In some of the cases in which the court has done
so, it seems to have confused non-jurisdictional questions with true
jurisdictional limitations. For example, to the extent that a prior
decision bypassed an issue of “statutory standing” to address the
merits, it was not assuming jurisdiction. See Lexmark Int’l v. Static
Control Components, 572 U.S. 118, 128 n.4 (2014) (noting that “statutory
standing” previously has been treated “as effectively jurisdictional”
even though it “does not implicate subject-matter jurisdiction”); see
also Whitaker v. Dep’t of Com., 970 F.3d 200, 210 & n.49 (2d Cir. 2020).
But to the extent circuit precedent purports to afford us
discretion to ignore statutory limits on our jurisdiction, it is
inconsistent with Steel Co. and with the Constitution. See U.S. CONST.
art. 3, § 1; see also Funk v. Belneftekhim, 861 F.3d 354, 371 (2d Cir. 2017)
(“Federal courts are not empowered to confer subject-matter
jurisdiction on themselves.”). Even if we have that discretion, I
respectfully decline to exercise it.
In this case, however, it is clear that we have jurisdiction over
Butcher’s claims and that the district court erred in concluding that
the Rooker-Feldman doctrine prevents the court from exercising
jurisdiction over those claims. The Rooker-Feldman doctrine “is
confined to 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). When Butcher commenced the district
court proceedings in this case, his state-court appeal was still
pending—and he ultimately prevailed in state court. He was not a
2
state-court loser injured by a judgment entered before the district
court proceedings commenced.
When our court has indulged in the doctrine of hypothetical
jurisdiction, it has said it would do so only “where the jurisdictional
issues are complex.” United States ex rel. Hanks v. United States, 961
F.3d 131, 137 (2d Cir. 2020) (quoting Ivanishvili v. U.S. Dep’t of Justice,
433 F.3d 332, 338 n.2 (2d Cir. 2006)). But here, the jurisdictional issue
could not be simpler. “Since Saudi Basic Industries, all federal circuits
that have addressed the issue have concluded that Rooker-Feldman
does not apply if, as here, a state-court appeal is pending when the
federal suit is filed.” Parker v. Lyons, 757 F.3d 701, 705 (7th Cir. 2014)
(citing cases). To resolve this jurisdictional issue, we need only adopt
the unanimous position of every other circuit court to address it.
Unlike the court, I see no reason to avoid doing so.
Because we have jurisdiction to consider the merits of Butcher’s
claims, and because I agree with the court that “Butcher’s complaint
failed to state any claim on which relief could be granted,” ante at 11,
I concur in the part of the court’s opinion that addresses Butcher’s
failure to state a claim and concur in the judgment affirming the
dismissal of his complaint.
I
“It is a fundamental precept that federal courts are courts of
limited jurisdiction. The limits upon federal jurisdiction, whether
imposed by the Constitution or by Congress, must be neither
disregarded nor evaded.” Owen Equip. & Erection Co. v. Kroger, 437
U.S. 365, 374 (1978). In this case, the district court held that the federal
courts lack subject-matter jurisdiction over Butcher’s claims. We
cannot ignore that ruling and decide the merits of Butcher’s claims
without assuring ourselves that we have subject-matter jurisdiction.
3
See Wynn v. AC Rochester, 273 F.3d 153, 157 (2d Cir. 2001) (“[B]efore
deciding any case we are required to assure ourselves that the case is
properly within our subject matter jurisdiction.”). “Without
jurisdiction the court cannot proceed at all.” Ex parte McCardle, 74 U.S.
506, 514 (1869).
A
In Steel Co., the Supreme Court explained that “[t]he statutory
and (especially) constitutional elements of jurisdiction are an essential
ingredient of separation and equilibration of powers.” 523 U.S. at 101.
Subsequently, in Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584
(1999), the Court held that although “subject-matter jurisdiction
necessarily precedes a ruling on the merits, the same principle does
not dictate a sequencing of jurisdictional issues.” In so holding, the
Court expressly affirmed that it is “subject-matter jurisdiction”—not
some subset of subject-matter jurisdiction, such as “Article III
jurisdiction,” ante at 13, or “constitutional” jurisdiction, id. at 15—that
must precede a decision on the merits. Ruhrgas, 526 U.S. at 584.
The Court in Steel Co. defined “subject-matter jurisdiction” as
“the courts’ statutory or constitutional power to adjudicate the case.”
523 U.S. at 89 (emphasis omitted); see also Ins. Corp. of Ireland v.
Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982) (“Subject-
matter jurisdiction … is an Art. III as well as a statutory
requirement.”). Nothing in this definition or the Court’s holding
suggests that limitations on subject-matter jurisdiction are less
binding when created by statute rather than by the Constitution.
Ruhrgas confirms the scope of the Steel Co. rule. In Ruhrgas, the
Supreme Court addressed the sequencing of two jurisdictional issues:
personal jurisdiction and the statutory grant of subject-matter
jurisdiction under several statutes. 526 U.S. at 579-80. “In holding that
4
there is no mandatory ordering of jurisdictional issues, the Court
clearly treated the issue of whether a claim fits within a statutory
grant of subject-matter jurisdiction as being covered by the Steel Co.
rule of priority.” Kaplan v. Cent. Bank of the Islamic Republic of Iran, 896
F.3d 501, 518 (D.C. Cir. 2018) (Edwards, J., concurring). To be sure, the
Supreme Court has sometimes discussed the jurisdiction “that is
authorized by Article III of the Constitution,” on the one hand, “and
the statutes enacted by Congress,” on the other. Bender v. Williamsport
Area Sch. Dist., 475 U.S. 534, 541 (1986). “But this merely highlights
that both requirements exist; it does not intimate that the
requirements delineated in a statutory grant of jurisdiction are any
less a constraint on courts’ power than the requirements described
directly in the Constitution.” Kaplan, 896 F.3d at 517 (Edwards, J.,
concurring); see also Kontrick v. Ryan, 540 U.S. 443, 452 (2004) (“Only
Congress may determine a lower federal court’s subject-matter
jurisdiction.”); Sheldon v. Sill, 49 U.S. 441, 449 (1850) (“Courts created
by statute can have no jurisdiction but such as the statute confers.”).
Accordingly, a “federal court acts ‘ultra vires’ regardless of
whether its jurisdiction is lacking because of the absence of a
requirement specifically mentioned in Article III … or because
Congress has repealed its jurisdiction to hear a particular matter.”
Seale v. INS, 323 F.3d 150, 156 (1st Cir. 2003). Before addressing the
merits, a federal court must confirm that it has subject-matter
jurisdiction conferred by statute because, “with limited exceptions, a
congressional grant of jurisdiction is a prerequisite to the exercise of
judicial power.” Patchak v. Zinke, 138 S. Ct. 897, 907 (2018). “‘To deny
this position’ would undermine the separation of powers by
‘elevat[ing] the judicial over the legislative branch.’” Id. (quoting Cary
v. Curtis, 44 U.S. 236, 245 (1845)). In fact, our court recently reaffirmed
the principle that lower courts “may not adjudicate a case or
5
controversy unless authorized by both Article III of the United States
Constitution and a federal jurisdictional statute.” United States v. Assa
Co., 934 F.3d 185, 188 (2d Cir. 2019) (emphasis added); see also Kings
Choice Neckwear, Inc. v. Pitney Bowes, Inc., 396 F. App’x 736, 736 n.1 (2d
Cir. 2010); In re Auction Houses Antitrust Litig., 42 F. App’x 511, 515 (2d
Cir. 2002) (“Our jurisdiction is limited by both statute … and by
Article III of the United States Constitution.”).
Under the doctrine of hypothetical jurisdiction that the court
applies today, see ante at 11-17, we are not constrained by
jurisdictional statutes. If the court were right, we could assume
jurisdiction over cases that Congress has barred us from considering.
We could assume original jurisdiction over federal question and
diversity of citizenship cases. See 28 U.S.C. §§ 1331-32. We could
assume appellate jurisdiction to review the decisions of other courts
of appeals, see id. § 1254, or the decisions of district courts in other
circuits, see id. § 1294. We could even assume jurisdiction over matters
within the exclusive jurisdiction of the U.S. Court of Appeals for the
Federal Circuit, see id. § 1295, the U.S. Court of Appeals for the D.C.
Circuit, see, e.g., 8 U.S.C. § 1535, or the U.S. Court of Appeals for
Veterans Claims, see 38 U.S.C. § 7252. Each of these limitations on our
jurisdiction is of “statutory rather than constitutional origins,” and
“there is no jurisdictional bar that prevents Congress from reversing
course and giving” this court jurisdiction over those matters. Ante at
15.
This is not what the Supreme Court meant when it said that
“[t]he statutory and (especially) constitutional elements of
jurisdiction are an essential ingredient of separation and equilibration
of powers.” Steel Co., 523 U.S. at 101; see also Seale, 323 F.3d at 156 n.5
(“While the Constitution defines the limits of judicial power, it is up
6
to Congress to prescribe how much of it shall be exercised by the
lower courts.”).
I recognize that the doctrine of hypothetical jurisdiction allows
the court to ignore statutory limits on our jurisdiction only when the
plaintiff’s claims will be dismissed on the merits. See Steel Co., 523 U.S.
at 93 (discussing the practice of assuming jurisdiction when “the
prevailing party on the merits would be the same as the prevailing
party were jurisdiction denied”); Ivanishvili, 433 F.3d at 338 n.2
(approving of hypothesizing jurisdiction when “the substance of the
claim is … plainly without merit”). But even a dismissal on the merits
can create binding precedent on important legal questions. In a
dismissal on the merits, the court may define the essential “elements
a plaintiff must plead to state a claim” for a particular cause of action.
Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009). 1 The court may also
determine the scope and application of affirmative defenses including
“various types of estoppel, … a wide range of forms of legal immunity
from suit, the equitable doctrine of laches, a claim of privilege, …
[and] the barring effect of res judicata and related preclusion
principles.” 2 To affirm the district court here, the court interpreted the
requirements of 18 U.S.C. § 1962(c)-(d) and 42 U.S.C. § 1983.
1We have recently opined, for example, on the “requisite elements of an
ERISA estoppel claim,” Sullivan-Mestecky v. Verizon Commc’n Inc., 961 F.3d
91, 100 (2d Cir. 2020), the scope of vertical or horizontal relatedness
necessary to “establish a pattern of racketeering activity” under RICO,
Halvorssen v. Simpson, 807 F. App’x 26, 29 (2d Cir. 2020), and the notice a
plaintiff must give to his or her employer of a disability to state a reasonable
accommodation claim, Costabile v. N.Y.C. Health & Hosps. Corp., 951 F.3d 77,
82 (2d Cir. 2020).
2 5B CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE &
PROCEDURE § 1357, pp. 721-28 (3d ed. 2004) (footnotes omitted).
7
Opinions issued by the court, even when our jurisdiction is in
doubt, are “binding precedent upon this Court,” Sohm v. Scholastic
Inc., 959 F.3d 39, 50 (2d Cir. 2020), and upon “lower courts in this
Circuit,” Newsom-Lang v. Warren Int’l, 129 F. Supp. 2d 662, 664
(S.D.N.Y. 2001). These opinions involve the exercise of the judicial
power and may follow only from statutory authorization. A court
may not “pronounce upon the meaning” of a law “when it has no
jurisdiction to do.” Steel Co., 523 U.S. at 101-02. Accordingly, “[t]o
dismiss a claim on the merits, or to affirm such dismissal, a court must
have jurisdiction.” Main St. Legal Servs., Inc. v. Nat’l Sec. Council, 811
F.3d 542, 566 (2d Cir. 2016).
It is true that Congress may grant us jurisdiction and that
Congress may take it away. See ante at 15. When Congress grants us
jurisdiction, we may exercise it. When Congress takes it away, we
may not. 3
3 This case is even more remarkable than the ordinary case in which a court
assumes hypothetical jurisdiction to reach the merits. Here, the court does
not simply ignore a jurisdictional question but considers that question and
appears to be convinced that we lack jurisdiction in this case. Ante at 17 n.5
(citing district court precedents that “have concluded that Rooker-Feldman
applies even where there is a pending state appeal of the challenged
judgment” and circuit precedent that, in the court’s view, “strongly
suggest[s] … that it does”). Despite this conclusion about its own
jurisdiction, the court proceeds to the merits. I do not think the court is
correct about the scope of the Rooker-Feldman doctrine, as I explain in Part II.
But if the court believes what it says—that the doctrine likely deprives this
court of subject-matter jurisdiction over this case—it should not be deciding
the case on the merits. “It is axiomatic that federal courts are courts of
limited jurisdiction and may not decide cases over which they lack subject
matter jurisdiction.” Funk, 861 F.3d at 371 (quoting Lyndonville Sav. Bank &
Tr. Co. v. Lussier, 211 F.3d 697, 700 (2d Cir. 2000)).
8
B
The court relies on circuit precedent for the proposition that we
may apply the doctrine of hypothetical jurisdiction even after Steel Co.
See ante at 11-13. When evaluating these precedents, it is important to
recall that it has been “commonplace” in judicial opinions for the
word “jurisdiction” to refer to limitations that are not truly
jurisdictional, such as the elements of a cause of action. Steel Co., 523
U.S. at 90; see also id. (“‘Jurisdiction,’ it has been observed, ‘is a word
of many, too many, meanings.’”). We therefore ought to distinguish
carefully “between two sometimes confused or conflated concepts:
federal-court ‘subject-matter’ jurisdiction over a controversy; and the
essential ingredients of a federal claim for relief.” Arbaugh v. Y&H
Corp., 546 U.S. 500, 503 (2006).
In Arbaugh, the Supreme Court explained that “when Congress
does not rank a statutory limitation … as jurisdictional, courts should
treat the restriction as nonjurisdictional in character.” Id. at 516. And
in Lexmark, the Court noted that prior references in the caselaw to
“prudential” or “statutory standing” were misleading because “the
absence of a valid (as opposed to arguable) cause of action does not
implicate subject-matter jurisdiction, i.e., the court’s statutory or
constitutional power to adjudicate the case.” 572 U.S. at 128 n.4.
Our cases assuming hypothetical jurisdiction—even though
invoking a concept of “statutory jurisdiction”—often do not involve
“the court’s statutory or constitutional power to adjudicate the case”
but rather other, nonjurisdictional limitations. See, e.g., Moore v.
Consol. Edison Co., 409 F.3d 506, 511 n.5 (2d Cir. 2005) (exercising
“hypothetical jurisdiction” to bypass a question involving prudential
third-party standing requirements).
9
For example, in Doyle v. Department of Homeland Security, 959
F.3d 72, 78-79 (2d Cir. 2020), the court assumed “statutory
jurisdiction” to avoid considering the district court’s conclusion that
the Federal Records Act “precludes judicial review” under the
Administrative Procedure Act of certain claims. Doyle v. DHS, 331
F. Supp. 3d 27, 62 (S.D.N.Y. 2018) (citing Armstrong v. Bush, 924 F.2d
282, 297 (D.C. Cir. 1991)). That issue, however, involves the
availability of a cause of action. 4 “Whether a cause of action exists is
not a question of jurisdiction, and may be assumed without being
decided.” Air Courier Conf., 498 U.S. at 523 n.3; cf. Main St. Legal Servs.,
811 F.3d at 566. In Abimbola v. Ashcroft, 378 F.3d 173, 180 (2d Cir. 2004),
the court exercised “hypothetical jurisdiction” to avoid deciding
whether an issue the petitioner had failed to raise before the agency
was properly before the court under 8 U.S.C. § 1252(d)(1). Although
some courts have held that the requirement of issue exhaustion is
jurisdictional, see, e.g., Massis v. Mukasey, 549 F.3d 631, 639 (4th Cir.
2008), our court has held that it is not a “jurisdictional requirement,”
Lin Zhong v. DOJ, 480 F.3d 104, 120 (2d Cir. 2007).
Similarly, in Fama, the court invoked “hypothetical
jurisdiction” to avoid a question involving the one-year statute of
limitations for habeas petitions and relation back under the Federal
Rules of Civil Procedure. 235 F.3d at 816 & n.11. Our court has said,
4See Block v. Cmty. Nutrition Inst., 467 U.S. 340, 345 (1984) (“The APA confers
a general cause of action … but withdraws that cause of action to the extent
the relevant statute ‘preclude[s] judicial review.’”) (quoting 5 U.S.C.
§ 701(a)(1)); see also Air Courier Conf. of Am. v. Am. Postal Workers Union AFL-
CIO, 498 U.S. 517, 523 n.3 (1991) (noting that “[t]he judicial review
provisions of the APA are not jurisdictional, so a defense based on
exemption from the APA can be waived” and that whether a statute
precludes review “is in essence a question whether Congress intended to
allow a certain cause of action”) (internal citation omitted).
10
however, that “the one-year period is a statute of limitations rather
than a jurisdictional bar.” Smith v. McGinnis, 208 F.3d 13, 17 (2d Cir.
2000). Finally, in United States v. Miller, 263 F.3d 1, 4 n.2 (2d Cir. 2001),
the court exercised “a form of hypothetical jurisdiction” to avoid
deciding whether the appeal met the requirements of 18 U.S.C.
§ 3742(a). Although our court has, prior to Arbaugh, described
§ 3742(a) as jurisdictional, 5 a better, more recent view is that § 3742(a)
imposes “a mandatory limit on our power, not a subject-matter
jurisdiction limit on our power,” United States v. Marshall, 954 F.3d
823, 827 (6th Cir. 2020). 6
In other cases, the court may have avoided true jurisdictional
questions without offending the Steel Co. rule of priority. In In re
Arbitration Between Monegasque de Reassurances S.A.M. v. Nak Naftogaz
of Ukraine, 311 F.3d 488, 497-98 (2d Cir. 2002), the court relied on
“hypothetical jurisdiction” to apply the doctrine of forum non
conveniens without addressing a question of statutory jurisdiction.
The Supreme Court, however, has specifically held that Steel Co.
allows a court to dismiss a case for forum non conveniens before
considering jurisdiction because it is a threshold, non-merits
5See, e.g., United States v. Doe, 93 F.3d 67, 68 (2d Cir. 1996); United States v.
Lawal, 17 F.3d 560, 563 (2d Cir. 1994).
6 See Marshall, 954 F.3d at 826 (“It’s usually a mistake, as one case after
another now shows, to treat a statutory limit on our power as a statutory
limit on our subject-matter jurisdiction. More often than not, the [Supreme]
Court has explained, what might seem to be a limit on our subject-matter
jurisdiction amounts to a ‘mandatory claim-processing rule’ or a
mandatory limit on our authority to grant a certain form of relief.”). Even
though the Supreme Court spoke of § 3742(a) in terms of “jurisdiction” in
United States v. Ruiz, 536 U.S. 622, 627-28 (2002), it did so before it decided
Arbaugh and only in “dicta that the Court did not follow in its disposition
of the case,” In re Sealed Case, 449 F.3d 118, 123 (D.C. Cir. 2006).
11
consideration. Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549
U.S. 422, 425 (2007) (“We hold that a district court has discretion to
respond at once to a defendant’s forum non conveniens plea, and need
not take up first any other threshold objection.”); see Ruhrgas, 526 U.S.
at 585 (“It is hardly novel for a federal court to choose among
threshold grounds for denying audience to a case on the merits.”).
These cases did not entail skipping over jurisdictional
limitations to reach the merits. When faced with plainly jurisdictional
limitations, the court has been more hesitant to hypothesize
jurisdiction. See, e.g., Hanks, 961 F.3d at 138 (remanding “for the
district court to consider the jurisdictional question”); Ventura de
Paulino v. N.Y.C. Dep’t of Educ., 959 F.3d 519, 530 (2d Cir. 2020) (noting
that a court should address jurisdiction first “in all but the rarest of
cases”); C. Hudson Gas & Elec. Corp. v. FERC, 783 F.3d 92, 103 (2d Cir.
2015); ProShipLine, Inc. v. Aspen Infrastructures, Ltd., 585 F.3d 105, 113
n.7 (2d Cir. 2009) (“[W]e think it advisable to [address Article III
jurisdiction] … as part of a complete analysis of the issues on
appeal.”).
This case unmistakably implicates “the court’s statutory or
constitutional power to adjudicate.” Lexmark, 572 U.S. at 128 n.4
(emphasis omitted). The other circuits that have considered whether
it is appropriate to bypass a Rooker-Feldman question to reach the
merits have concluded that assuming hypothetical jurisdiction in this
context is improper. See, e.g., Alyshah v. United States, 241 F. App’x 665,
668 n.3 (11th Cir. 2007) (holding that “a court may not assume
‘hypothetical jurisdiction’ to decide the merits of a case despite its lack
of jurisdiction” due to the Rooker-Feldman doctrine); In re Knapper, 407
F.3d 573, 580 n.15 (3d Cir. 2005); Nguyen v. Phillips, 69 F. App’x 358,
359 n.3 (9th Cir. 2003) (noting that “[w]e must consider …
jurisdictional challenges” under the Rooker-Feldman doctrine “before
12
turning to the merits of a case”); Hutcherson v. Lauderdale Cty., 326 F.3d
747, 755 (6th Cir. 2003) (“Rooker-Feldman should be considered first
since its application strips federal courts of jurisdiction and the ability
to hear a res judicata, or other affirmative, defense.”). These courts are
correct; we may not hypothesize jurisdiction to reach the merits when
our subject-matter jurisdiction is in doubt. 7
The court argues that we may assume jurisdiction here because
the “result is foreordained by well-established circuit precedent.”
Ante at 17 n.5. That notion finds some support in the Supreme Court’s
decision in Steel Co. to reaffirm Norton v. Mathews, 427 U.S. 524 (1976),
and Secretary of Navy v. Avrech, 418 U.S. 676 (1974) (per curiam). Steel
Co., 523 U.S. at 98-99. Although the Supreme Court acknowledged
that these two cases “diluted the absolute purity of the rule that
Article III jurisdiction is always an antecedent question,” it also held
that the cases created only a narrow exception to that rule for
7 As the court notes, other circuits have retained the doctrine of hypothetical
statutory jurisdiction even after Steel Co. Ante at 16-17. But the circuits have
not done so uniformly, see, e.g., Friends of the Everglades v. EPA, 699 F.3d
1280, 1288 (11th Cir. 2012) (“Even if the resolution of the merits were
foreordained—an issue we do not decide—the Supreme Court has
explicitly rejected the theory of ‘hypothetical jurisdiction.’ … [A]n inferior
court must have both statutory and constitutional jurisdiction before it may
decide a case on the merits.”), or without doubts, see, e.g., Seale, 323 F.3d at
156 (“As courts created by statute, we can have no jurisdiction but such as
the statute confers. A federal court acts ‘ultra vires’ regardless of whether
its jurisdiction is lacking because of the absence of a requirement
specifically mentioned in Article III, such as standing or ripeness, or
because Congress has repealed its jurisdiction to hear a particular matter.”)
(internal quotation marks and citation omitted); Kaplan, 896 F.3d at 517-19
(Edwards, J., concurring) (“I doubt that we can now say that a lack of
statutory jurisdiction need not be a barrier to deciding issues on the merits.
… [T]here is no priority given to ‘Article III jurisdiction’ over ‘statutory
jurisdiction.’”).
13
circumstances in which “the merits question [has been] decided in a
companion case” such that “the outcome of [the instant case] … [is]
foreordained.” Id. (emphasis omitted).
In Vera v. Banco Bilbao Vizcaya Argentaria, S.A., 946 F.3d 120, 137
n.22 (2d Cir. 2019), we explained that the outcome of a previous case
“was indisputably ‘foreordained’” where a collateral proceeding,
“argued in tandem,” had “definitively resolved the merits question at
issue.” Like Norton and Avrech, Vera is limited to a “peculiar” and
“extraordinary procedural posture[]” in which “the merits question
was decided in a companion case.” Steel Co., 523 U.S. at 98. But unlike
Norton, Avrech, and Vera, the merits issue here—whether Butcher
plausibly stated a claim upon which relief can be granted—has not
been “dispositively resolved in a companion case.” Id. No case, let
alone a companion case, has foreordained the outcome of Butcher’s
appeal. The court decides that issue here, for the first time, after
hypothesizing subject-matter jurisdiction.
C
Even if the court may hypothesize jurisdiction despite the Steel
Co. rule, there remains the separate question of “whether, and when,
it should.” Levin v. Com. Energy, Inc., 560 U.S. 413, 434 (2010) (Thomas,
J., concurring in the judgment). Although our obligation to exercise
jurisdiction where it exists is “virtually unflagging,” Colorado River
Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976), we
are never obligated to hypothesize jurisdiction. Doing so is, at most,
a matter of discretion. See ante at 12 (arguing that we “may” assume
hypothetical jurisdiction).
When this court has recognized such discretion, it has been
careful to create limits. The assumption of jurisdiction “is prohibited
in all but the narrowest of circumstances,” Ortiz-Franco v. Holder, 782
14
F.3d 81, 86 (2d Cir. 2015), abrogated on other grounds by Nasrallah v. Barr,
140 S. Ct. 1683 (2020), and is allowed only “‘where the jurisdictional
issues are complex’” rather than “relatively straightforward,” Hanks,
961 F.3d at 137-38 (quoting Ivanishvili, 433 F.3d at 338 n.2); see also
Levin, 560 U.S. at 434 (Thomas, J., concurring in the judgment)
(“[C]ourts should not dismiss cases on nonjurisdictional grounds
where jurisdiction … involves no arduous inquiry and deciding it
would not substantially undermine judicial economy.”) (internal
quotation marks and alteration omitted). Because the jurisdictional
question here is straightforward, see infra Part II, our precedent
suggests that we should not hypothesize jurisdiction.
When deciding whether to hypothesize jurisdiction, “[m]uch
more than legal niceties are at stake”—even apart from the fact that
the court could be acting ultra vires. Steel Co., 523 U.S. at 101-02. A
dismissal on the merits may have consequences that a jurisdictional
dismissal lacks. For example, a dismissal on the merits is generally
with prejudice, see Fed. R. Civ. P. 41(b), but a jurisdictional dismissal
must be without prejudice, see Hernandez v. Conriv Realty Assocs., 182
F.3d 121, 123 (2d Cir. 1999). A dismissal on the merits has preclusive
effects for future litigation, but a jurisdictional dismissal does not. See
St. Pierre v. Dyer, 208 F.3d 394, 399-400 (2d Cir. 2000). And a dismissal
on the merits could support a claim for malicious prosecution,
whereas a jurisdictional dismissal might not. See Liberty Synergistics,
Inc. v. Microflo Ltd., 50 F. Supp. 3d 267, 283-85 (E.D.N.Y. 2014)
(discussing the requirement of a “favorable termination” under New
York law).
Although “[h]ypothetical jurisdiction produces nothing more
than a hypothetical judgment,” Steel Co., 523 U.S. at 101, such a
judgment can have real consequences. For that reason, the constraints
15
this court has placed on the doctrine of hypothetical jurisdiction are
important.
In my view, it is generally improper for a court to exercise the
judicial power in the absence of statutory authority to do so, and
therefore we should “assure ourselves that the case is properly within
our subject matter jurisdiction” before issuing a decision on the
merits. Wynn, 273 F.3d at 157. The failure to do so, as in this case, is
especially unjustified when the jurisdictional question before the
court is simple. Hanks, 961 F.3d at 138.
II
Butcher’s state-court appeal was still pending when he filed
suit in federal court. The jurisdictional question before us, therefore,
could not be simpler: Was the state-court judgment “rendered before
the district court proceedings commenced”? Butcher v. Wendt, No. 17-
CV-7988, 2018 WL 6725308, at *4 (S.D.N.Y. Dec. 21, 2018). 8
The Rooker-Feldman doctrine “is confined to cases” in which
“the losing party in state court filed suit in federal court after the state
proceedings ended.” Saudi Basic Indus., 544 U.S. at 284, 291. In this
case, the state proceedings had not yet ended when Butcher filed suit
because his state-court appeal was still pending. Federacion de Maestros
de P.R. v. Junta de Relaciones del Trabajo de P.R., 410 F.3d 17, 24-27 &
8 Even as the court describes it, the question is simple: does the Rooker-
Feldman doctrine apply “even where there is a pending state appeal of the
challenged judgment”? Ante at 17 n.5. The court has already gone to the
trouble of considering that question, examining relevant circuit precedent,
surveying the precedents of other circuits and of district courts within our
circuit, and concluding that the relevant case law “strongly suggests” an
answer. Id. Yet the court still declines to take the final step and provide one.
16
n.13 (1st Cir. 2005). Accordingly, the Rooker-Feldman doctrine does not
bar jurisdiction over Butcher’s claims.
“Since Saudi Basic Industries, all federal circuits that have
addressed the issue have concluded that Rooker-Feldman does not
apply if, as here, a state-court appeal is pending when the federal suit
is filed.” Parker, 757 F.3d at 705; see Malhan v. Sec’y U.S. Dep’t of State,
938 F.3d 453, 459-61 (3d Cir. 2019); Parker, 757 F.3d at 705-06; Nicholson
v. Shafe, 558 F.3d 1266, 1279 (11th Cir. 2009); Guttman v. Khalsa, 446
F.3d 1027, 1032 & n.2 (10th Cir. 2006); Dornheim v. Sholes, 430 F.3d 919,
923-24 (8th Cir. 2005); Mothershed v. Justices of the Sup. Ct., 410 F.3d 602,
604 n.1 (9th Cir. 2005); Federacion, 410 F.3d at 24-27 & n.13.
This court has even suggested that this is the correct approach.
See Green v. Mattingly, 585 F.3d 97, 103 (2d Cir. 2009) (noting that “the
Rooker-Feldman doctrine would likely apply” if a plaintiff brought suit
in federal court “at the completion of her appeals” in state court). We
have approvingly cited caselaw from other circuits that endorses this
approach to deciding “whether ‘the state proceedings have “ended”
within the meaning of Rooker-Feldman.’” Hoblock v. Albany Cty. Bd. of
Elections, 422 F.3d 77, 89 (2d Cir. 2005) (quoting Federacion, 410 F.3d at
25). We have also followed this approach in summary orders. See
Borrani v. Nationstar Mortg. LLC, No. 19-2204, 2020 WL 3721480, at *2
(2d Cir. July 7, 2020) (holding that the Rooker-Feldman doctrine applied
because the federal suit was filed after the “thirty-day deadline for
appeal” of the state-court judgment). Other circuits, in fact, believe
that our court has already taken a position on this issue. See Malhan,
938 F.3d at 459 (including the Second Circuit among those that have
“cited Federacion with approval”); Guttman, 446 F.3d at 1032
(including the Second Circuit among those that have held “Rooker-
17
Feldman applies only to suits filed after state proceedings are final”). 9
There is no reason for the court to avoid answering this simple
question here.
The court says that our circuit has “strongly suggested” it
would decide this question differently from every other circuit. See
ante at 17 n.5 (citing Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d
423, 426 & n.1 (2d Cir. 2014)). But Vossbrinck does not indicate that we
would do so. Although the plaintiff in Vossbrinck had a pending state-
court appeal when he filed suit in federal court, we explicitly noted
that “Vossbrinck [did] not argue that the relevant state judgment was
not ‘rendered before the district court proceedings commenced’ for
Rooker-Feldman purposes” and therefore reserved judgment on the
question. 773 F.3d at 426 n.1. The court infers a “suggested” answer
to the jurisdictional question from the fact pattern of the case. Yet it is
well-established that “drive-by jurisdictional rulings of this sort …
have no precedential effect.” Steel Co., 523 U.S. at 91.
At the time Butcher filed suit in federal court, the state
proceedings had not yet ended. Compare App’x 66, with id. at 833.
Therefore, the Rooker-Feldman doctrine does not bar our consideration
of his claims and we have jurisdiction to consider Butcher’s RICO and
42 U.S.C. § 1983 claims.
***
The Rooker-Feldman doctrine “is not an abstention doctrine.”
VanderKodde v. Mary Jane M. Elliott, P.C., 951 F.3d 397, 402 n.2 (6th Cir.
2020). Nor is it a preclusion doctrine, Lance v. Dennis, 546 U.S. 459, 466
(2006), or a doctrine of comity, see Thana v. Bd. of License Comm’rs, 827
9See also Phillips ex rel. Green v. City of New York, 453 F. Supp. 2d 690, 713-14
(S.D.N.Y. 2006).
18
F.3d 314, 320 (4th Cir. 2016). Rather, the Rooker-Feldman doctrine
proceeds from the statutory grant of appellate jurisdiction to the
Supreme Court over state court judgments in 28 U.S.C. § 1257, see
VanderKodde, 951 F.3d at 405 (Sutton, J., concurring) (“[O]nly the
United States Supreme Court, not federal district courts, may
entertain appeals from final judgments of the state courts.”). That
statutory grant “precludes a United States district court from
exercising subject-matter jurisdiction in an action” to which the
doctrine applies. Saudi Basic Indus., 544 U.S. at 291.
Unlike “the doctrines of preclusion, comity, and abstention,”
each of which may apply when there is concurrent federal and state
litigation, Thana, 827 F.3d at 320, the Rooker-Feldman doctrine does not
preclude “concurrent jurisdiction” in both federal and state courts
while state-court appeals are pending, as was the case here. Saudi
Basic Indus., 544 U.S. at 292.
Having concluded that the Rooker-Feldman doctrine does not
bar our consideration of Butcher’s claims, I concur in the part of the
court’s opinion that holds that “Butcher’s complaint failed to state any
claim on which relief could be granted.” See ante at 7-11. And because
the complaint failed to state a claim, the district court properly
dismissed it. I therefore concur in the judgment.
19