CBC Bricks Inc v. Schmitt, Sandra L. ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 02-1470 & 02-1471
KIM SCHMITT, GERARD SMETANA,
CBC BRICKS, INC., and DENNIS TAHENY,
Plaintiffs-Appellants,
v.
SANDRA SCHMITT,
Defendant-Appellee.
____________
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 01 C 4028—Marvin E. Aspen, Judge.
____________
ARGUED DECEMBER 3, 2002—DECIDED MARCH 25, 2003
____________
Before EASTERBROOK, MANION, and EVANS, Circuit
Judges.
EVANS, Circuit Judge. This case arises out of the nasty
divorce of Kim Schmitt and his soon-to-be ex-wife, Sandra
Schmitt. Although the details of the marriage are neither
known to us nor relevant to our case, we can’t help but
wonder if this isn’t the first venomous and frivolous ar-
gument between the two.
The case comes to us after, as Judge Aspen in the dis-
trict court accurately noted, a “tortured procedural his-
tory.” In February 2000, Mrs. Schmitt filed for divorce in
2 Nos. 02-1470 & 02-1471
Illinois state court. Unable personally to serve process up-
on her husband, Mrs. Schmitt moved under 735 Ill. Comp.
Stat. Ann. 5/2-202 for service of process by special order
of the court. After the motion was granted in July, Mrs.
Schmitt used a private detective to serve process upon
three parties approved by the court: an employee of Mr.
Schmitt’s company, CBC Bricks, Inc., and a law firm and
an attorney who had previously represented Mr. Schmitt
in an unrelated matter.
That August, Mr. Schmitt responded with a motion
contesting service of process, claiming a violation of his
due process rights. The court denied that motion and or-
dered Mr. Schmitt to pay his wife for maintenance, land-
scaping, travel, and attorneys’ fees. The court also en-
joined Mr. Schmitt and some of his business entities,
including CBC Bricks, from disposing of assets without
notice to Mrs. Schmitt and her attorneys.
Mr. Schmitt then filed an interlocutory appeal to the
Illinois Appellate Court, claiming, again, that the trial
court’s orders were void because the method of service
of process violated his due process rights. In April 2001,
the appellate court ruled against Mr. Schmitt, then de-
nied his petition for rehearing and refused his request
to stay the case in the trial court.
In May 2001, already 15 months after Mrs. Schmitt
filed for divorce, Mr. Schmitt filed a federal claim under
42 U.S.C. § 1983, arguing that the Illinois state courts
infringed upon his due process rights. The district court
granted Mrs. Schmitt’s motion to dismiss for lack of sub-
ject-matter jurisdiction, finding support for its decision
in both the substantiality doctrine and the Rooker-Feld-
man doctrine. The district court also ordered Mr. Schmitt,
CBC Bricks, and his attorneys to show cause why they
did not deserve to have Rule 11 sanctions imposed on them.
After denying their motion for reconsideration, the district
Nos. 02-1470 & 02-1471 3
court sanctioned Mr. Schmitt and his attorneys under
Rule 11. The court also ordered Mr. Schmitt and CBC to
pay Mrs. Schmitt’s attorneys’ fees and costs. Mr. Schmitt,
his attorneys, and CBC Bricks appeal, asking us to reverse
both the district court’s dismissal of their suit and the de-
cision to impose sanctions.
Although the district court offered both the substantiality
doctrine and the Rooker-Feldman doctrine to support
the dismissal, we need choose only one on which to af-
firm. And since this case goes to the heart of the Rooker-
Feldman doctrine, see Kamilewicz v. Bank of Boston
Corp., 92 F.3d 506, 509 (7th Cir. 1996) (“At its core, the
doctrine is a recognition of the principle that the inferior
federal courts generally do not have the power to exercise
appellate review over state court decisions.”), that’s the
route we’ll take. In Rooker v. Fidelity Trust Co, the Su-
preme Court held:
If the constitutional questions stated in the bill actu-
ally arose in the cause, it was the province and duty
of the state courts to decide them; and their deci-
sion, whether right or wrong, was an exercise of juris-
diction. If the decision was wrong, that did not make
the judgment void, but merely left it open to reversal
or modification in an appropriate and timely appel-
late proceeding. Unless and until so reversed or modi-
fied, it would be an effective and conclusive adjudica-
tion. Under the legislation of Congress, no court of the
United States other than this court could entertain a
proceeding to reverse or modify the judgment for er-
rors of that character. To do so would be an exercise
of appellate jurisdiction. The jurisdiction possessed
by the District Courts is strictly original.
263 U.S. 413, 415-16 (1923) (citations omitted). We have
interpreted Rooker-Feldman to ask “whether the federal
plaintiff seeks to set aside a state court judgment or
4 Nos. 02-1470 & 02-1471
whether he is, in fact, presenting an independent claim. Put
another way, if the injury which the federal plaintiff al-
leges resulted from the state court judgment itself, then
Rooker-Feldman controls, and the lower federal courts
lack jurisdiction over the claim. It does not matter that
the state court judgment might be erroneous or even
unconstitutional.” Kamilewicz, 92 F.3d at 510 (citations
omitted). Our cases reflect Rooker’s basic principle that
once a case is litigated in state court, a federal district
court does not have jurisdiction to review it. See Garry v.
Geils, 82 F.3d 1362, 1366 (7th Cir. 1996) (“Thus Rooker
and Feldman both proclaimed that if a federal plaintiff
claims injury at the hands of a state court, due to its
decision in a civil case, federal district courts have no
jurisdiction to hear the case; and the only appeal is to
the Supreme Court after a final judgment by the highest
state court.”); Ritter v. Ross, 992 F.2d 750, 754 (7th Cir.
1993) (Appellant “may not seek a reversal of a state court
judgment simply by casting his complaint in the form of
a civil rights action.” (quoting Hagerty v. Succession of
Clement, 749 F.2d 217, 220 (5th Cir. 1984), cert. denied, 474
U.S. 968 (1985))).
Mr. Schmitt argues that we have jurisdiction under
several exceptions to Rooker-Feldman. First, he claims
the doctrine does not apply when only state court inter-
locutory decisions are at stake. While some courts have
recognized limited interlocutory order exceptions, see, e.g.,
In re Meyerland Co., 960 F.2d 512, 516 (5th Cir. 1992),
we have twice decided to pass on the question. See Hoover
v. Wagner, 47 F.3d 845, 849 (7th Cir. 1995) (“The appli-
cation of the doctrine to interlocutory decisions of state
courts . . . is an open question.”), and Owens-Corning
Fiberglass Corp. v. Moran, 959 F.2d 634, 635 (7th Cir.
1992) (“Whether the Rooker-Feldman doctrine applies to
interlocutory decisions is an interesting question.”).
Nos. 02-1470 & 02-1471 5
But a closer look at those cases shows why an exception
might have been appropriate. Several mitigating factors
existed in Owens-Corning:
Owens-Corning attempts to skirt the Rooker-Feldman
doctrine not only by observing that Judge Moran’s
decision [Judge Moran was the state court judge whose
decision was being attacked in the federal court pro-
ceeding] is interlocutory but also by trumpeting that
it began this case before he could impose any sanction—
thereby making it clear, Owens-Corning insists, that
its objection is to Rule 237(b) in the abstract, and not
its application to a particular case. Four Justices con-
cluded in Pennzoil that such a maneuver avoids the
Rooker-Feldman doctrine.
Owens-Corning, 959 F.2d at 635. Similarly, in Hoover, the
plaintiffs were not parties in the accompanying state
court action, “so it is a little hard to describe what they
are doing as circumventing the prescribed mode of appel-
late review.” Hoover, 47 F.3d at 849.
Here, on the other hand, circumventing the prescribed
mode of appellate review is virtually the only way to
describe what Mr. Schmitt is doing. He had an opportu-
nity to present his case in the state court (Mr. Schmitt
and CBC claim they were not parties to the original suit,
but Mr. Schmitt was named in the original divorce ac-
tion, and CBC was served with process and given an op-
portunity to participate in the divorce proceedings), and a
state court is perfectly capable of answering questions
of jurisdiction and service of process. See Garry, 82 F.3d
at 1369 n.13 (“Under the principles of comity and federal-
ism, we cannot and will not assume that the plaintiffs’
constitutional claims would be treated any differently
by the courts of Illinois than by a federal court.”). Having
been rebuffed by trial and appellate courts in Illinois, the
prescribed mode of appellate review was clear: Mr. Schmitt
6 Nos. 02-1470 & 02-1471
should have appealed to the state’s supreme court, after
which, if he lost, he would have been free to appeal to the
United States Supreme Court. See Young v. Murphy, 90
F.3d 1225, 1230 (7th Cir. 1996) (“[L]itigants who feel a
state proceeding has violated their constitutional rights
must appeal that decision through their state courts and
thence to the Supreme Court.”). Instead, filing suit with
the district court was the type of end run around an ad-
verse state court ruling that we have explicitly rejected.
See Maple Lanes, Inc. v. Messer, 186 F.3d 823, 825 (7th
Cir. 1999).
Mr. Schmitt also argues that a rarely invoked “void
ab initio” exception to the Rooker-Feldman doctrine ap-
plies here. According to Mr. Schmitt, the faulty service of
process meant that the state courts never had jurisdic-
tion over him. Federal courts exercising bankruptcy juris-
diction have occasionally reviewed state court judgments
where the state court lacked personal or subject matter
jurisdiction. See, e.g., In re James, 940 F.2d 46, 52 (3d Cir.
1991). But see In re Ferren, 203 F.3d 559, 560 (8th Cir.
2000) (declining to create exception). We have acknowl-
edged the Third Circuit’s exception, but we have not en-
dorsed it. 4901 Corp. v. Town of Cicero, 220 F.3d 522, 528
n.6 (7th Cir. 2000).
While a void ab initio Rooker-Feldman exception might
be appropriate in some bankruptcy cases (apparently
the only situation in which it has been applied) in order
to protect the dominant federal role in that specialized
area of the law, it has no place here. As we have said, the
Illinois state courts were competent to determine their
own jurisdictional boundaries, so there is no need for the
federal courts to intervene. If a state court had violated
constitutional jurisdictional limits, Mr. Schmitt could
have brought that up with the Supreme Court after ex-
hausting his state court remedies.
Nos. 02-1470 & 02-1471 7
In sum, Mr. Schmitt has brought the precise sort of claim
Rooker-Feldman eliminates. And that is so clear that, in
addition to AFFIRMING the district court’s judgment, we
declare this appeal to be frivolous, and we direct the
plaintiffs to show cause within 14 days why they should
not be sanctioned under our Rule 38.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—3-25-03