Graves v. Goodnow Flow Ass'n ( 2018 )

17-3457
Graves v. Goodnow Flow Ass’n
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 23rd day of August, two thousand eighteen.
PRESENT:
JON O. NEWMAN,
ROSEMARY S. POOLER,
Circuit Judges,
DENISE COTE,*
Circuit Judge.
_____________________________________
John A. Graves,
Plaintiff-Appellant,
v. 17-3457
Goodnow Flow Association, Inc., et al.,
Defendants-Appellees.
_____________________________________
FOR PLAINTIFF-APPELLANT: John A. Graves, pro se, Merritt, NC.
FOR GOODNOW FLOW
ASSOCIATION APPELLEES: Jesse P. Schwartz, Walsh & Walsh LLP,
Saratoga Springs, NY.
FOR LUDEMANN, McMORRIS
& SILVESTRI APPELLEE: Jonathan M. Bernstein, Goldberg Segalla LLP,
Albany, NY.
* Denise Cote, of the United States District Court for the Southern District of New York, sitting
by designation.
Appeal from a judgment of the United States District Court for the Northern District of
New York (Suddaby, C.J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
Appellant John A. Graves, proceeding pro se, appeals the district court’s dismissal of his
complaint for lack of jurisdiction and for failure to state a claim. Graves sued the Goodnow
Flow Association (“GFA”), nine of its directors, and a law firm that had previously represented
him, Ludemann, McMorris & Silvestri, P.C. (“Ludemann”) under 42 U.S.C. § 1983, asserting
claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) for racketeering
and fraud, the Due Process Clause of the Fourteenth Amendment, and state law. Graves alleged
that GFA and its directors had extorted and defrauded him by collecting membership dues, and
had violated his due process rights by making misrepresentations in a state court action for
unpaid dues. He further alleged that Ludemann had “aided and abetted” GFA and was liable for
legal malpractice under state law. We assume the parties’ familiarity with the underlying facts,
procedural history, and issues on appeal.
We review de novo the dismissal of a complaint pursuant to Federal Rules of Civil
Procedure 12(b)(1) and 12(b)(6), including the district court’s application of the Rooker-Feldman
doctrine, accepting all factual allegations as true and drawing all reasonable inferences in the
plaintiff’s favor. Biro v. Condé Nast, 807 F.3d 541, 544 (2d Cir. 2015) (reciting standard
applicale to Rule 12(b)(6)); Liranzo v. United States, 690 F.3d 78, 84 (2d Cir. 2012) (Rule
12(b)(1)); Hoblock v. Albany Cty. Bd. of Elections, 422 F.3d 77, 83 (2d Cir. 2005) (Rooker-
Feldman). The complaint must plead “enough facts to state a claim to relief that is plausible on
its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). Although a court must accept as true all the factual allegations in the
complaint, that requirement is “inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678.
Graves’s due process claim is barred by the Rooker-Feldman doctrine. Under the
Rooker-Feldman doctrine, federal courts lack subject matter jurisdiction over claims that
effectively challenge state court judgments. See District of Columbia Court of Appeals v.
Feldman, 460 U.S. 462, 486–87 (1983); Rooker v. Fidelity Tr. Co., 263 U.S. 413, 415–16
(1923). A claim is barred under the doctrine when (1) the federal court plaintiff lost in state
court, (2) the plaintiff complains of injuries caused by a state court judgment, (3) the plaintiff
invites the federal court to review and reject that judgment, and (4) the state court judgment was
rendered prior to the commencement of proceedings in the district court. Exxon Mobil Corp. v.
Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). Here, the New York State Supreme Court
granted summary judgment to GFA on the dues issue; Graves’s federal complaint argues that the
state court decision violated his due process rights; he invited the district court to review and
reject the state court ruling by arguing that it violated his rights and was based on GFA’s
misrepresentations; and the state court judgment was entered in 2014, two years before Graves
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filed his complaint in federal court. Accordingly, Graves’s due process claim was barred by the
Rooker-Feldman doctrine and the district court lacked jurisdiction to consider it.
The Rooker-Feldman doctrine may not bar Graves’s remaining RICO and state law
claims against GFA. “[F]ederal plaintiffs are not subject to the Rooker–Feldman bar unless they
complain of an injury caused by a state judgment.” Hoblock, 422 F.3d at 87 (emphasis omitted).
Graves’s remaining claims against GFA pertain primarily to the collection of dues; as a result, it
is not clear that those claims were caused by the state court judgment, so much as they seek a
result opposed to the state court judgment.
However, as the district court found, the remaining claims are barred by res judicata,
because Graves could have asserted those claims in the state action as counterclaims or in
opposition to summary judgment. See Giannone v. York Tape & Label, Inc., 548 F.3d 191, 192-
93 (2d Cir. 2008) (applying New York res judicata law to New York state court judgments);
Hoblock, 422 F.3d at 88 n.6, 92-93 (holding preclusion may apply to cases not barred by Rooker-
Feldman); Ferris v. Cuevas, 118 F.3d 122, 126 (2d Cir. 1997) (applying New York law and
holding that a claim is subject to res judicata where it arises from the same facts as the prior
case); Simpson Elec. Corp. v. Leucadia, Inc., 72 N.Y.2d 450, 461 (1988) (finding New York
state courts have concurrent jurisdiction over RICO claims); Henry Modell & Co. v. Minister,
Elders & Deacons of Ref. Prot. Dutch Church of City of N.Y., 68 N.Y.2d 456, 461 (1986)
(holding that “a party is not free to remain silent in an action in which he is the defendant and
then bring a second action seeking relief inconsistent with the judgment in the first action by
asserting what is simply a new legal theory”). Graves’s argument that res judicata should not
apply because the state court judgment was based on misrepresentations does not undermine the
preclusive effect of the earlier judgment, but rather challenges the state court’s determination of
the merits. See Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, 500 F.3d 111, 122 (2d Cir. 2007).
Graves has abandoned any challenges to the district court’s dismissal of his claims
against Ludemann and its decision not to exercise supplemental jurisdiction over his state law
claims by failing to raise them on appeal. See LoSacco v. City of Middletown, 71 F.3d 88, 92–
93 (2d Cir. 1995). In any event, any due process claim against Ludemann is similarly barred by
the Rooker-Feldman doctrine and was properly dismissed sua sponte. See Durant, Nichols,
Houston, Hodgson & Cortese-Costa, P.C. v. Dupont, 565 F.3d 56, 62 (2d Cir. 2009) (“If subject
matter jurisdiction is lacking and no party has called the matter to the court’s attention, the court
has the duty to dismiss the action sua sponte.”). Because there was no basis for federal subject
matter jurisdiction, the district court properly declined to exercise supplemental jurisdiction over
Graves’s state law claim of legal malpractice. See, e.g., Kolari v. N.Y.-Presbyterian Hosp., 455
F.3d 118, 122 (2d Cir. 2006) (observing that “in the usual case in which all federal-law claims
are eliminated before trial, the balance of factors will point toward declining to exercise
jurisdiction over the remaining state-law claims” (quoting Carnegie-Mellon Univ. v. Cohill, 484
U.S. 343, 350 n.7 (1988)) (ellipses omitted)).
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We have considered Graves’s remaining arguments and find them to be without merit.
Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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