Rachel Benson v. Energy Solutions Inc.

FILED
NOT FOR PUBLICATION
OCT 25 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RACHEL BENSON, No. 14-16909
Plaintiff - Appellant, D.C. No.2:13-cv-2201-PHX-LOA
v. MEMORANDUM*
ENERGY SOLUTIONS, INC.; LAW
OFFICE OF JAMES R. VAUGHN, P.C.;
TRS FINANCIAL CORPORATION;
VICTOR AND JANE DOE GILGAN;
ROBERT CONTI AND NIKAL CONTI,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Arizona
Lawrence O. Anderson, Magistrate Judge, Presiding
Submitted October 17, 2016**
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes that this case is suitable for decision
without oral argument. See FED. R. APP. P. 34(a)(2).
Before: GRABER and MURGUIA, Circuit Judges, and BENNETT,*** Senior
District Judge.
The district court dismissed plaintiff Rachel Benson’s suit on the ground
that the Rooker-Feldman doctrine deprived it of subject matter jurisdiction. We
hold that the Rooker-Feldman doctrine bars Benson from proceeding and affirm
that part of the district court’s judgment, but remand for the limited purpose of
dismissing Benson’s case without prejudice.
In 2001, defendant Energy Solutions, Inc., filed the debt collection action
against Benson that is the genesis of the present dispute, in an Arizona state court.
The complaint alleged that Benson had failed to pay a debt on a contract she had
with an assignor for Energy Solutions. Although Benson was personally served
with the summons and complaint, she did not respond. Energy Solutions obtained
a default judgment. Five years later, Energy Solutions sought, and was
subsequently granted, a renewal of its judgment against Benson. Energy Solutions
obtained a second renewal of its judgment against Benson in 2011. By this time,
the amount owed stood at $4,729.15. In 2012, Energy Solutions sought a writ of
***
The Honorable Mark W. Bennett, Senior United States District Judge for
the Northern District of Iowa, sitting by designation.
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garnishment for Benson’s Bank of America account, which the state court granted.
Nearly a year later, and almost twelve years after default judgment was
entered against her, Benson filed her original complaint in this case against Energy
Solutions and the Law Office of James R. Vaughan, P.C. She sought, inter alia, to
vacate the Arizona state court’s default judgment against her. Benson amended her
complaint to add defendants. In her amended complaint, Benson, again sought,
inter alia, to have the Arizona state court default judgment against her vacated.
Defendants sought dismissal of the amended complaint on several grounds,
including that Benson’s action was barred by the Rooker-Feldman doctrine. The
district court agreed and dismissed Benson’s case.
1. We have jurisdiction under 28 U.S.C. § 1291. We review de novo the
district court’s dismissal under the Rooker-Feldman doctrine. Carmona v.
Carmona, 603 F.3d 1041, 1050 (9th Cir. 2010). The Rooker-Feldman doctrine
prevents federal district courts from exercising jurisdiction over cases brought by
“state-court losers” challenging “state-court judgments rendered before the district
court proceedings commenced.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp.,
544 U.S. 280, 284 (2005); see also Henrichs v. Valley View Dev., 474 F.3d 609,
616 (9th Cir. 2007) (holding that the Rooker-Feldman doctrine barred the
plaintiff’s claim because alleged legal injuries arose from the “state court’s
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purportedly erroneous judgment” and the relief he sought “would require the
district court to determine that the state court’s decision was wrong and thus
void.”); Kougasian v. TMSL, Inc. 359 F.3d 1136, 1139 (9th Cir. 2004) (“If a
plaintiff brings a de facto appeal from a state court judgment, Rooker–Feldman
requires that the district court dismiss the suit for lack of subject matter
jurisdiction.”). Here, Benson seeks to vacate the Arizona state court’s default
judgment against her. Thus, the district court properly concluded that the
Rooker-Feldman doctrine barred Benson’s action because it is a forbidden de facto
appeal of the Arizona state court’s grant of default judgment against her. Indeed,
that is the relief she expressly seeks in her federal action. See Exxon Mobil Corp.,
544 U.S. at 284. Benson’s remaining claims are inextricably intertwined with the
forbidden appeal. See D.C. Court of Appeals v. Feldman, 460 U.S. 462, 482 n.16
(1983).
2. The district court did not err in failing sua sponte to grant Benson leave
to amend her complaint for a second time. Where all of her claims were
inextricably intertwined with the Arizona court’s default judgment, they could not
be repleaded to avoid the Rooker-Feldman doctrine.
3. Dismissals under the Rooker-Feldman doctrine are dismissals for lack of
subject matter jurisdiction. Kougasian, 359 F.3d at 1139. Consequently, they
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should be without prejudice, Freeman v. Oakland Unified Sch. Dist., 179 F.3d 846,
847 (9th Cir. 1999) (order). Accordingly, we affirm in part and vacate in part the
judgment, and remand for the limited purpose of dismissing Benson’s case without
prejudice.
AFFIRMED in part; VACATED in part; REMANDED. Costs on appeal
awarded to Defendants.
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