McCrobie v. Palisades Acquisition XVI, LLC

16-1264-cv
McCrobie v. Palisades et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION ASUMMARY ORDER@). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 10th day of November, two thousand sixteen.
PRESENT:
PETER W. HALL,
DEBRA ANN LIVINGSTON,
Circuit Judges.
NICHOLAS G. GARAUFIS,
District Judge.*
_____________________________________
Christopher McCrobie,
Plaintiff-Appellant,
v. No. 16-1264-cv
Palisades Acquisition XVI, LLC, Houslanger &
Associates, PLLC, Todd E. Houslanger,
Defendants-Appellees.
_____________________________________
FOR APPELLANT: JONATHAN R. MILLER, Brian L. Bromberg,
Bromberg Law Office, P.C., New York, NY,
Kenneth R. Hiller, Law Offices of Kenneth
Hiller, PLLC, Amherst, NY.
FOR APPELLEE PALISADES
ACQUISITION XVI, LLC: SCOTT EVAN WORTMAN, Hilary Korman,
Warshaw Burstein LLP, New York, NY.
* Judge Nicholas G. Garaufis, United States District Court for the Eastern District of New York, sitting by
designation.
FOR APPELLEES HOUSLANGER &
ASSOCIATES, PLLC and TODD E.
HOUSLANGER: ROBERT L. ARLEO, Robert L. Arleo, Esq.,
P.C., New York, NY.
Appeal from a judgment of the United States District Court for the Western District of New
York (Curtin, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED in part and REVERSED in
part.
Plaintiff-Appellant Christopher McCrobie appeals from the district court’s decision
dismissing his first amended complaint for lack of subject matter jurisdiction pursuant to the
Rooker-Feldman doctrine. We assume the parties’ familiarity with the underlying facts, the
procedural history of the case, and the issues on appeal.
I. Waiver
As an initial matter, we address the Defendants’ contention that the Plaintiff’s arguments
should be deemed waived on appeal because the Plaintiff failed to oppose the motion to dismiss in
the district court. As the Plaintiff correctly notes, all of the arguments he makes on appeal were, in
fact, presented to the district court in his motion to amend the complaint and his reply
memorandum in support of that motion. And, in any case, the Defendants cite to no relevant case
law supporting the proposition that argument opposing dismissal for lack of jurisdiction would be
waived even if raised for the first time on appeal. The Defendants’ argument on this point is
therefore without merit.
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II. Procedural Posture
Because it decided the matter on jurisdictional grounds, the district court did not reach
most of the many other arguments raised by the parties. The parties have nevertheless briefed those
arguments in this appeal, and they invite us to rule on them. “It is our settled practice to allow the
district court to address arguments in the first instance.” Fulton v. Goord, 591 F.3d 37, 45 (2d Cir.
2009) (quoting Farricielli v. Holbrook, 215 F.3d 241, 246 (2d Cir. 2000) (per curiam)). We
address only the points ruled on by the district court. In light of our determination, explained
herein, that the district court erred in applying the Rooker-Feldman doctrine, we remand this
matter to the district court so that it can consider in the first instance the parties’ remaining
arguments. The decision below and the record before us do permit us to review the district court’s
ruling on the statute of limitations, which we affirm.
III. The Rooker-Feldman Doctrine
We review de novo a district court’s dismissal of a complaint for lack of subject matter
jurisdiction pursuant to the Rooker-Feldman doctrine. Hoblock v. Albany Cty. Bd. of Elections,
422 F.3d 77, 83 (2d Cir. 2005).
The Rooker-Feldman doctrine “bars the federal courts from exercising jurisdiction over
claims ‘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.’” Sykes v. Mel S. Harris & Assocs. LLC, 780 F.3d 70, 94 (2d Cir.
2015) (quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005)). The
Rooker-Feldman doctrine applies when the following four requirements are satisfied:
First, the federal-court plaintiff must have lost in state court. Second, the plaintiff must
complain of injuries caused by a state-court judgment. Third, the plaintiff must invite
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district court review and rejection of that judgment. Fourth, the state-court judgment must
have been rendered before the district court proceedings commenced.
Id. (quoting Hoblock, 422 F.3d at 85). Here, the Plaintiff disputes that his case meets the second
and third requirements, arguing that the injuries he alleges in this suit were not caused by the
state-court judgment and that the present action does not invite review of the state-court judgment.
The third requirement alone is dispositive here. The Plaintiff is not asking the federal
courts to overturn the underlying state-court judgment. Rather, he is alleging that the Defendants’
conduct in their attempts to collect on that judgment violated a federal statute and, as a result, that
he is entitled to money damages. Ruling on the question of whether the Defendants violated the
FDCPA does not, in most cases, require review of the state-court judgment. The underlying
state-court judgment can be perfectly valid, and the Defendants can still have violated the FDCPA
by making false, deceptive, or misleading communications or using unfair or unconscionable
means in the course of attempting to collect on the judgment. Here, the Plaintiff’s allegations relate
to the representations the Defendants made to him about the state court default judgment. The
question of whether representations contained in the Defendants’ income execution form were
legally deficient at the time they were made is not the same as questioning whether the state court’s
original default judgment has continuing legal validity. Pursuing claims for violations implicit in
the former does not constitute an attack on the latter. Because the third Rooker-Feldman
requirement is not satisfied in this case, the Rooker-Feldman doctrine does not preclude subject
matter jurisdiction.
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IV. Statute of Limitations
“We review de novo a district court’s grant of a motion to dismiss, including its legal
interpretation and application of a statute of limitations[.]” Deutsche Bank Nat. Tr. Co. v. Quicken
Loans Inc., 810 F.3d 861, 865 (2d Cir. 2015).
The district court correctly concluded that the earliest possible accrual date of the FDCPA
claims at issue here was August 28, 2014, when the Houslanger firm issued the income execution.
The Plaintiff brought the present suit on January 6, 2015. The earliest possible accrual date is well
within the limitations period.
The Defendants argue that the accrual date can be no later than March 8, 2007, the date on
which the default judgment was entered against the Plaintiff in the underlying state court
collection proceeding. This argument, in addition to being contrary to logic, is foreclosed by
precedent. In Benzemann v. Citibank N.A., we held that an FDCPA violation only occurs when a
plaintiff has both a complete cause of action and notice of the FDCPA violation. 806 F.3d 98,
102-03 (2d Cir. 2015). We observed in that case that this means the statute will often begin to run
after the date on which the allegedly deceptive debt collection notice was mailed, id., but, at a
minimum, a plaintiff’s FDCPA cause of action cannot begin to run before the alleged violations
themselves were committed, as the Defendants ask us to hold here.
For the reasons set forth herein, the judgment of the district court is AFFIRMED with
respect to its ruling on the statute of limitations and REVERSED with respect to its ruling that the
Rooker-Feldman doctrine deprived it of subject matter jurisdiction. This matter is REMANDED
to the district court to address the parties’ remaining arguments in the first instance.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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