Brian Lundstrom v. Carla Young ( 2021 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS APR 21 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIAN LUNDSTROM, No. 20-55002
Plaintiff-Appellant, D.C. No.
3:18-cv-02856-GPC-MSB
v.
CARLA YOUNG; et al., MEMORANDUM*
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of California
Gonzalo P. Curiel, District Judge, Presiding
Argued and Submitted April 15, 2021
Pasadena, California
Before: M. SMITH and IKUTA, Circuit Judges, and STEELE,** District Judge.
Plaintiff-Appellant Brian Lundstrom (Lundstrom) appeals the district court’s
dismissal of his First Amended Complaint against his ex-wife, Carla Young
(Young), and his employer, Ligand Pharmaceuticals Incorporated (Ligand), for lack
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable John E. Steele, United States District Judge for the
Middle District of Florida, sitting by designation.
of subject matter jurisdiction under the Rooker-Feldman doctrine1, failure to state a
claim, and lack of Article III standing. Lundstrom argues that his claims do not
amount to improper de facto appeals from orders from a Texas state court, that his
claims fall within the extrinsic fraud exception to Rooker-Feldman, and that he has
Article III standing. 2 Because the parties are familiar with the facts, we do not
recount them here, except as necessary to provide context to our ruling.
We have jurisdiction under 28 U.S.C. § 1291. “We review an application of
the Rooker-Feldman doctrine de novo.” Carmona v. Carmona, 603 F.3d 1041, 1050
(9th Cir. 2010). Whether subject matter jurisdiction exists is a question of law that
we also review de novo. Bidart Bros. v. Cal. Apple Comm’n, 73 F.3d 925, 928 (9th
Cir. 1996) (citation omitted). We also review de novo a dismissal under Federal Rule
of Civil Procedure 12(b)(6). Rhoades v. Avon Prods., 504 F.3d 1151, 1156 (9th Cir.
2007).
Under the Rooker-Feldman doctrine, federal district courts lack jurisdiction
over “cases brought by state-court losers complaining of injuries caused by state-
1
See Rooker v. Fid. Tr. Co., 263 U.S. 413 (1923); D.C. Ct. of Appeals v. Feldman,
460 U.S. 462 (1983).
2
Young seeks sanctions under Federal Rule of Appellate Procedure 38 and
28 U.S.C. § 1927. We deny that request because this appeal does not present highly
exceptional circumstances warranting sanctions, but instead involves complex issues
relating to the Rooker-Feldman doctrine, the majority of which are meritorious. See
In re Westwood Plaza N., 889 F.3d 975, 977 (9th Cir. 2018) (quoting Malhiot v. S.
Cal. Retail Clerks Union, 735 F.2d 1133, 1137 (9th Cir. 1984)).
2
court judgments rendered before the district court proceedings commenced and
inviting district court review and rejection of those judgments.” Exxon Mobil Corp.
v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). Rooker-Feldman prevents “a
party losing in state court . . . from seeking what in substance would be appellate
review of the state judgment in a United States district court, based on the losing
party’s claim that the state judgment itself violates the loser’s federal rights.”
Johnson v. De Grandy, 512 U.S. 997, 1005–06 (1994).
We developed a two-part test to determine whether the Rooker-Feldman
doctrine bars jurisdiction over a complaint filed in federal court. First, the federal
complaint must assert that the plaintiff was injured by “legal error or errors by the
state court.” Kougasian v. TMSL, Inc., 359 F.3d 1136, 1140 (9th Cir. 2004). Second,
the federal complaint must seek “relief from the state court judgment” as the
remedy. Id.
1. In Claims 4 and 5, Lundstrom challenges Texas state court judgments directly,
petitioning the district court to declare that a 401(k) Qualified Domestic Relations
Order and a Stock Domestic Relations Order issued by a Texas state court are
invalid. Counsel for Lundstrom conceded this during oral argument. Because Claims
4 and 5 meet the two-part test from Kougasian, the district court lacked jurisdiction
to consider those claims under Rooker-Feldman and properly dismissed them. See
id.
3
2. Lundstrom’s remaining claims are not barred by Rooker-Feldman. The
Supreme Court emphasized that Rooker-Feldman is a narrow doctrine, and courts
should not construe it “to extend far beyond the contours of the Rooker and Feldman
cases,” because that would override “Congress’ conferral of federal-court
jurisdiction concurrent with jurisdiction exercised by state courts” and supersede
“the ordinary application of preclusion law pursuant to 28 U.S.C. § 1738.” Saudi
Basic Indus. Corp., 544 U.S. at 283. Accordingly, Rooker-Feldman “is confined to
cases of the kind from which the doctrine acquired its name . . . [and] does not
otherwise override or supplant preclusion doctrine or augment the circumscribed
doctrines that allow federal courts to stay or dismiss proceedings in deference to
state-court actions.” Id. at 284. “If a federal plaintiff presents some independent
claim, albeit one that denies a legal conclusion that a state court has reached in a
case to which he was a party, then there is jurisdiction and state law determines
whether the defendant prevails under principles of preclusion.” Id. at 293 (cleaned
up).
Lundstrom’s remaining claims allege that Ligand and Young breached
various fiduciary duties under ERISA and state law. Lundstrom seeks damages,
equitable relief, and injunctive relief. These claims do not expressly seek “relief from
the [Texas] state court judgment” or assert that Lundstrom was injured by an “error
or errors by the [Texas] state court.” See Kougasian, 359 F.3d at 1140. These claims
4
are independent, even though they “den[y] a legal conclusion that a state court has
reached in a case to which [Lundstrom] was a party.” See Saudi Basic Indus. Corp.,
544 U.S. at 293.
Therefore, the district court erred by dismissing Claims 1, 2, and 6 for lack of
subject matter jurisdiction under Rooker-Feldman. The district court also erred by
dismissing Claims 1, 2, 3, and 6 for failure to allege a “concrete or actual harm that
is not barred by Rooker-Feldman.” To the extent the district court alternatively
dismissed Claim 3 on the merits, it erred by failing to address Lundstrom’s claim
that Ligand failed to comply with the procedural requirements in 29 U.S.C. §
1056(d)(3)(G)(i). The appellees waived any claim to the contrary by failing to
respond to this argument in their briefing. Moran v. Screening Pros, LLC, 943 F.3d
1175, 1180 (9th Cir. 2019).
* * *
We affirm the district court’s dismissal of Claims 4 and 5 because those claims
are barred under Rooker-Feldman.3 We reverse the district court’s dismissal of
Claims 1, 2, 3, 6, 7, 8, and 9, and remand those claims to the district court to consider
any other defenses, including claim and issue preclusion, in the first instance.
3
Claim 4 should have been dismissed without prejudice because the district court
lacked subject matter jurisdiction to consider it. See Kelly v. Fleetwood Enters. Inc.,
377 F.3d 1034, 1036 (9th Cir. 2004). The district court shall enter an order reflecting
a dismissal without prejudice on Claims 4 and 5.
5
The district court shall allow Lundstrom leave to amend his complaint. If the
district court ultimately dismisses all of Lundstrom’s federal claims, it need not
exercise supplemental jurisdiction over any remaining state law claims. See 28
U.S.C. § 1367(c)(3).
AFFIRMED IN PART, REVERSED AND REMANDED IN PART.
6