Whiteford v. Reed

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
9-9-1998
Whiteford v. Reed
Precedential or Non-Precedential:
Docket 97-3652
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Recommended Citation
"Whiteford v. Reed" (1998). 1998 Decisions. Paper 220.
http://digitalcommons.law.villanova.edu/thirdcircuit_1998/220
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Filed September 9, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 97-3652
JOHN K. WHITEFORD, M.D.
Appellant
v.
JOHN REED, Director of the Professional Liability
Catastrophic Loss Fund; DANIEL KIMBALL, JR., M.D.,
Chairman of the Pennsylvania State Board of Medicine;
GERALD SMITH, ESQ., Counsel for the State Board of
Medicine, Commonwealth of Pennsylvania
On Appeal From the United States District Court
For the Western District of Pennsylvania
(D.C. Civil Action No. 97-cv-01940)
Submitted Pursuant to Third Circuit LAR 34.1(a)
July 17, 1998
BEFORE: BECKER, Chief Judge, STAPLETON and WEIS,
Circuit Judges
(Opinion Filed September 9, 1998)
John K. Whiteford
3245 Miracle Drive
Murrysville, PA 15668
Appellant, Pro Se
OPINION OF THE COURT
STAPLETON, Circuit Judge:
Whiteford appeals the district court's dismissal of his
complaint for lack of subject matter jurisdiction under the
Rooker-Feldman doctrine. Whiteford argues that Rooker-
Feldman is inapplicable because no state court addressed
the merits of his claims. We have jurisdiction under 28
U.S.C. S 1291 because the district court's dismal for lack of
subject matter jurisdiction is a "final order." Application of
the Rooker-Feldman doctrine is a question of federal subject
matter jurisdiction over which we exercise plenary review.
Gulla v. North Strabane Township, 1998 WL 294013, *1 (3d
Cir. 1998). For the reasons that follow, we conclude that
Rooker-Feldman does not apply in this case. Accordingly,
we will reverse and remand the case for further
consideration by the district court.
I.
Whiteford, a Pennsylvania physician, filed suit in the
United States District Court for the Western District of
Pennsylvania alleging that Pennsylvania's Health Care
Services Malpractice Act ("Act") violates several of his
constitutional rights. 40 Pa. Cons. Stat. Ann. S 1301.701
(West 1998). The Act, enacted in response to an apparent
medical malpractice insurance crisis in 1975, requires
health care providers covered by the Act to carry minimum
malpractice insurance ("basic coverage"). 40 Pa. Cons. Stat.
Ann. 1301.701(a)(1)(i). In addition, the Act establishes the
Medical Professional Liability Catastrophe Loss Fund (the
"Fund"), an executive agency of the Commonwealth of
Pennsylvania1. The Fund was created:
_________________________________________________________________
1. Id. S 1301.701(d). Originally, the Act also included a dispute
resolution
section which established arbitration panels with "original exclusive
jurisdiction" over medical malpractice claims and limited attorney's fees.
This system was designed to reduce the costs of litigating malpractice
claims and was as a complement to the Fund. The Pennsylvania
Supreme Court, however, declared the Act's dispute resolution
component unconstitutional in Heller v. Frankston, 475 A.2d 1291, 1294
(Pa. 1984).
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for the purpose of paying all awards, judgments and
settlements for loss or damages against a health care
provider entitled to participate in the fund as a
consequence of any claim for professional liability
against such health care provider as a defendant or
additional defendant to the extent such health care
provider's share exceeds its basic coverage in effect at
the time of the occurrence.
Id. The Fund is primarily financed through the levying of
annual surcharges upon health care providers "entitled to
participate" in the fund. Id. S 1301.701(e). Notably, the Act
also authorizes the levying of emergency surcharges in the
event that the Fund's assets are insufficient to satisfy all
claims in the preceding claims period plus the Fund's
expenses. S 1301.701(e)(9).
In 1995, the Fund was operating under a $107 million
deficit. To deal with this deficit, the Fund imposed the first
emergency surcharge in the Fund's history. Generally, the
emergency surcharges amounted to several thousand
dollars per physician. Appellant Whiteford did not pay his
1995 emergency surcharge.
The Act and applicable regulations provide two major
consequences for failure to pay surcharges. First, non-
paying health care providers are no longer "covered by the
Fund in the event of loss." 31 Pa. Code S 242.17(b). Second,
non-paying health care providers face possible revocation or
suspension of their licenses. 40 Pa. Cons. Stat. Ann.
S 1301.701(f).
Upon determining that Whiteford had failed to pay his
1995 emergency surcharge, the Fund initiated formal
administrative proceedings against Whiteford including a
hearing held on October 26, 1996.2 At the hearing,
Whiteford admitted to his failure to pay and presented an
affirmative defense that the Fund surcharges violated his
constitutional rights. Additionally, Whiteford informed the
_________________________________________________________________
2. Whiteford filed an action in district court seeking a preliminary
injunction to prevent the administrative proceedings. The district court
declined to exercise its jurisdiction on the basis of abstention, and this
court affirmed.
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hearing officer that he was no longer carrying medical
malpractice insurance as required by the Act. 40 Pa. Cons.
Stat. S 1301.701(a). The hearing examiner declined to
entertain the constitutional arguments, suspended
Whiteford's license for 12 days and imposed a $685fine.
Whiteford petitioned the State Board of Medicine ("Board")
for review of the hearing examiner's decision under 40 Pa.
Cons. Stat. Ann. S 1301.905(a). The Board similarly refused
to consider Whiteford's constitutional challenges, affirmed
the hearing examiner's decisions and increased the
suspension to 14 days and the fine to $1,000. Whiteford
petitioned the Commonwealth Court for review of the
Board's decision, but his petition was dismissed, without
consideration of his various constitutional claims, because
Whiteford's petition contained "numerous substantial errors
which impair[ed the court's] ability to conduct a meaningful
review." (Appendix A-3). The Pennsylvania Supreme Court
denied Whiteford's petition for appeal. Whiteford v.
Commonwealth, 702 A.2d 1063 (Pa. 1997).
Whiteford then filed this action in the Western District of
Pennsylvania claiming that the suspension of his license
and imposition of the fine, as well as the Act generally,
violated his constitutional rights.3 The district court
dismissed Whiteford's complaint for lack of subject matter
jurisdiction under the Rooker-Feldman doctrine without
considering his constitutional claims. In dismissing
Whiteford's action under Rooker-Feldman the district court
stated:
When a plaintiff seeks to litigate a claim in federal
court, the existence of a state court judgment in
another case bars the federal proceeding under Rooker-
Feldman when entertaining the federal court claim
would be the equivalent of an appellate review of that
order.
(App. B3). The district court was correct in its
characterization of the Rooker-Feldman doctrine, however,
_________________________________________________________________
3. Whiteford claimed violations of due process, equal protection, the
right
to work, and that the Fund and surcharge constituted an illegal taking,
bill of attainder and an arbitrary mandate.
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we conclude that the court incorrectly applied the doctrine
in this case.
II.
"Under 28 U.S.C. S 1257, state court litigants who have
appealed an adverse judgment through the state court
system may seek review in the United States Supreme
Court; the lower federal courts [however] may not sit in
direct review of the decisions of a state tribunal." Gulla v.
North Strabane Township, 1998 WL 294013, *2 (3d Cir.
1998) (citing District of Columbia Court of Appeals v.
Feldman, 460 U.S. 462, 482 (1983) and Rooker v. Fidelity
Trust Co., 263 U.S. 413 (1923). "Under the Rooker-Feldman
doctrine, lower federal courts cannot entertain
constitutional claims that have been previously adjudicated
in state court or that are inextricably intertwined with a
state adjudication." Id. (citing FOCUS v. Allegheny County
Crt. of Common Pleas, 75 F.3d 834, 840 (3d Cir. 1996).
In other words, Rooker-Feldman precludes a federal
action if the relief requested in the federal action would
effectively reverse the state decision or void its ruling.
Accordingly, to determine whether Rooker-Feldman
bars [a] federal suit requires determining exactly what
the state court held . . . If the relief requested in the
federal action requires determining that the state
court's decision is wrong or would void the state court's
ruling, then the issues are inextricably intertwined and
the district court has no subject matter jurisdiction to
hear the suit.
FOCUS, 75 F.3d at 840. The Rooker-Feldman doctrine has
been interpreted to apply to the decisions of lower state
courts. In re General Motors Corp. Pick Up Truck Fuel Tank
Prod's Liability Litigation, 134 F.3d 133, 143 (3d Cir. 1998).
The state court dismissed Whiteford's appeal of the
Board's decision because Whiteford's petition contained
"numerous substantial errors which impair[ed the court's]
ability to conduct a meaningful review." (App. A3). Thus,
the court held that he had violated Pennsylvania's rules of
appellate procedure. Pa. R.A.P 2114-117. Whiteford's
federal action requested the district court to determine
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whether the Act's surcharge provisions violated his federal
constitutional rights. His federal claims did not require the
district court "[to] determin[e] that the state court's decision
[was] wrong or [to] void the state court's ruling." FOCUS, 75
F.3d at 840. The district court was not requested to
interpret Pennsylvania's rules of appellate procedure, it was
asked to interpret the Constitution. Rooker-Feldman does
not preclude the district court from exercising its
jurisdiction in this manner.
Moreover, this court has consistently held that where a
state action does not reach the merits of a plaintiff's claims,
then Rooker-Feldman does not deprive the federal court of
jurisdiction. See Gulla, 1998 WL 294013, at *4; E.B. v.
Verniero, 119 F.3d 1077, 1091 (3d Cir. 1997) (noting that
if state court had not decided merits of plaintiff's claim,
then Rooker-Feldman would not bar federal action). For
instance, in Gulla the plaintiffs brought a constitutional
challenge in state court to a municipality's decision
regarding subdivision of property adjacent to their own.
Gulla, 1998 WL 294013, at *1. The state court dismissed
plaintiffs' action because it concluded that they lacked
standing under state law. Id. Plaintiffs then filed a federal
action alleging constitutional violations. This court
determined that Rooker-Feldman was inapplicable:
[W]e conclude that the Gullas are not precluded from
bringing their federal claims because the state court
could not and did not adjudicate the merits of their
constitutional claims. Rather, the state court noted
that the Gullas lacked standing to raise their
constitutional claims . . . Since the Gullas could not
obtain an adjudication of their claims in state court,
they are not precluded from raising their constitutional
claims in the federal forum.
Id. at *5. Similarly, Whiteford could not obtain an
adjudication of his constitutional claims in state court and
Rooker-Feldman does not preclude him from seeking review
in federal court.
III.
In sum, we conclude that the district court erred when it
dismissed Whiteford's complaint under the Rooker-Feldman
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doctrine. We will reverse and remand so that the district
court may consider his claims.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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