Opinion
Case Number 01-10298-BC.
December 20, 2002
ORDER ADOPTING MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION AND GRANTING DEFENDANT'S MOTION TO DISMISS
On August 22, 2001, the plaintiff filed his pro se "Federal Question Complaint" in this Court against the defendant, who is the treasurer for the State of Michigan. The plaintiff, who has been a prisoner confined by the Michigan Department of Corrections since 1995 when he was approximately 60 years old, states that the State has wrongfully ordered payments diverted from his pension plan to reimburse the State for the cost of his incarceration. The Court referred the matter to the magistrate judge for general case management on September 25, 2001, and on October 11, 2001, the defendant filed a motion to dismiss for lack of subject matter jurisdiction. On October 23, 2002, the magistrate judge filed a report recommending that the motion be granted. The plaintiff filed timely objections to the recommendation, and the Court has conducted a de novo review of the matter in light of the magistrate's report and the objections filed. Although the Court agrees with the plaintiff that an involuntary transfer of pension benefits to pay for the cost of incarceration would violate federal law, because the assignment of pension benefits was made pursuant to a consent order entered in a state court lawsuit, the Court has no jurisdiction to overturn that order, and therefore will adopt the Magistrate Judge's recommendation and dismiss the case with prejudice.
I.
The plaintiff is currently incarcerated at the Mid-Michigan Correctional Facility in St. Louis, Michigan. In 1996, the Michigan treasurer commenced an action in the Oscoda County Circuit Court against the plaintiff and his former wife under the Michigan State Correctional Facility Reimbursement Act (SCFRA), Mich. Comp. Laws § 800.401, et seq, to recover the costs of the plaintiff's incarceration. The matter apparently was amicably resolved without trial, since on September 6, 1996 the state court entered a "Stipulation and Final Order" which required the plaintiff to make monthly payments to the State of $1,400 until September 3, 1997, and $650 each month thereafter. The order capped the plaintiff's SCFRA reimbursement obligation at that amount. The order further awarded the plaintiff his General Motors pension funds except to the extent that those funds were assigned to make the monthly reimbursement payment. The stipulation was signed by a representative of the State, the plaintiff's former wife, and attorney David M. Hartsook on behalf of the plaintiff.
In the present lawsuit, the plaintiff contends that the consent order assigning his pension benefits to the State violates the Employee Retirement Income Securities Act (ERISA), 29 U.S.C. § 1001 et seq., which preempts state law. He seeks a declaratory judgment from this Court that the state court order is void and compensatory damages for money "wrongfully" paid to the State of Michigan. Specifically, the plaintiff claims that the state court order violates ERISA's provision that benefits under a pension plan may not be assigned, regardless of whether the assignment is voluntary or involuntary.
In his motion to dismiss, the defendant argues that this Court has no jurisdiction over this matter because it amounts to no more than an attempt to appeal the state court order. Further, the defendant contends that the collection of prison reimbursement costs under the SCFRA constitutes the collection of a "tax" and the plaintiff's suit is barred under the Tax Injunction Act, which provides that federal "district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State." 28 U.S.C. § 1341. The magistrate judge did not address the argument based on the Tax Injunction Act, but rather held that the Court lacks jurisdiction under the Rooker-Feldman doctrine.
The plaintiff's objections to the magistrate judge's recommendation that the case be dismissed are based on his view that ERISA preemption is absolute. He explains that he could not raise this argument earlier, presumably referring to the state court proceeding, because there was no supportive case law. He says that he "has been deceived by the great bureaucratic conspiracy," and is "perplexed" that the plain language of ERISA will not shield his pension payments.
II.
Motions to dismiss are governed by Rule 12(b) of the Federal Rules of Civil Procedure; Rule 12(b)(1) concerns motions to dismiss for "lack of jurisdiction over the subject matter." Lack of subject matter jurisdiction may be asserted at any time, either in a pleading or a motion. Fed.R.Civ.P. 12(b)(1); Television Reception Corp. v. Dunbar, 426 F.2d 174, 177 (6th Cir. 1970). To survive a motion to dismiss, a complaint must contain "either direct or indirect allegations respecting all material elements to sustain a recovery under some viable legal theory." In re DeLorean Motor Co., 991 F.2d 1236, 1240 (6th Cir. 1993). When subject matter jurisdiction is challenged, the plaintiff has the burden of proving jurisdiction in order to survive the motion. Michigan Southern R.R. Co. v. Branch St. Joseph Counties Rail Users Ass'n., Inc., 287 F.3d 568, 573 (6th Cir. 2002); see also Moir v. Greater Cleveland Reg'l Transit Auth., 895 F.2d 266, 269 (6th Cir. 1990).
A pro se litigant's complaint is to be construed liberally, Jourdan v. Jabe, 951 F.2d 108, 110 (6th Cir. 1991); that is, it is held to a "less stringent standard" than those drafted by attorneys. Haines v. Kerner, 404 U.S. 519 (1972). Such complaints, however, must plead facts sufficient to show a cognizable legal wrong has been committed from which plaintiff may be granted relief. Fed.R.Civ.P. 12(b); In re DeLorean, 991 F.2d at 1240; Dekoven v. Bell, 140 F. Supp.2d 748, 752 (E.D.Mich. 2001).
In this case, the Court agrees with the plaintiff's underlying premise: SCFRA may not be used as authority to compel an ERISA pension plan to redirect the payment of pension benefits. Both this Court and the Michigan Court of Appeals have held that where the state utilizes SCFRA to effectively compel an assignment of pension plan benefits, as the state apparently sought in the Oscoda County action, SCFRA is preempted by ERISA. See Roberts v. Baugh, 986 F. Supp. 1074 (E.D.Mich. 1997); State Treasurer v. Abbott, 249 Mich. App. 107, 640 N.W.2d 888 (2001). In Abbott, the court held that "requiring General Motors to make defendant's pension payment to defendant's prison account against defendant's will conflicts with, and is therefore preempted by, ERISA's anti-alienation provision." Id. at 114, 640 N.W.2d at 892. See 29 U.S.C. § 1056(d)(1).
Before the Court reaches that point, however, it is necessary to consider the procedural posture of the matter, since granting the plaintiff the relief he seeks here will effectively set aside the consent order entered in the state court action. There are two obstacles presented by these circumstances. First, the state court final judgment was not contested; it was entered by consent. Under Michigan law, a consent judgment arises from an agreement between the parties. Sylvania Silica Co v. Berlin Twp., 186 Mich. App. 73, 75, 463 N.W.2d 129 (1990). It is in the nature of a contract and is to be construed and applied as such. Gramer v. Gramer, 207 Mich. App. 123, 125, 523 N.W.2d 861 (1994). Generally, such judgments are final and binding upon the court and the parties and cannot be modified absent fraud, mistake or unconscionable advantage. Staple v. Staple, 241 Mich. App. 562, 564, 616 N.W.2d 219 (2000); Walker v. Walker, 155 Mich. App. 405, 406-407, 399 N.W.2d 541 (1986). The plaintiff here has not suggested any reason why the Court ought to depart from that general rule and relieve him of the obligations to which he agreed.
More importantly, however, this Court does not have the authority to set aside a state court judgment in these circumstances. Basic to the Court's ability to grant relief is jurisdiction to do so; "jurisdiction" is "a court's constitutional or statutory power to adjudicate a case." United States v. Rayborn, No. 01-5632, 2002 WL 31728861, at *1 (6th Cir. Dec. 6, 2002). Jurisdiction is always a consideration throughout a federal lawsuit "[b]ecause lack of jurisdiction would make any decree in the case void and the continuation of the litigation in federal court futile." Brown v. Francis, 75 F.3d 860, 864-65 (3d Cir. 1996). See also Her Majesty the Queen in Right of the Province of Ontario v. City of Detroit, 874 F.2d 332, 339 (6th Cir. 1989).
In order to grant the plaintiff the relief he seeks, this Court would also have to alter or amend the Oscoda County Circuit Court order. However, as explained by the Supreme Court in District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983), federal district courts do not have jurisdiction to take such action. The Sixth Circuit recently reviewed the foundation of this rule which has come to be known as the Rooker-Feldman doctrine:
In District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983), the Supreme Court held that federal court review of state court proceedings is jurisdictionally limited to the Supreme Court of the United States by 28 U.S.C. § 1257. See also Patmon v. Michigan Sup.Ct., 224 F.3d 504, 506 (6th Cir. 2000). We refer to this doctrine as the Rooker-Feldman doctrine. See also Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923). The Feldman Court stated that "United States District Courts . . . do not have jurisdiction . . . over challenges to state court decisions in particular cases arising out of judicial proceedings even if those challenges allege that the state court's action was unconstitutional. Review of those decisions may only be had in this Court." Feldman, 460 U.S. at 486, 103 S.Ct. 1303. Tropf v. Fidelity Nat'l Title Ins. Co., 289 F.3d 929, 936 (6th Cir. 2002).
Thus, the Rooker-Feldman doctrine stands for the "simple . . . proposition that lower federal courts do not have jurisdiction to review a case litigated and decided in state court; only the United States Supreme Court has jurisdiction to correct state court judgments." Anderson v. Charter Township of Ypsilanti, 266 F.3d 487, 492 (6th Cir. 2001). The doctrine applies in two situations: (1) a direct attack of the substance of a state court decision and (2) a challenge to the procedures used by the state court to arrive at its decision. Id. at 493. The Rooker-Feldman doctrine includes cases brought under 42 U.S.C. § 1983 because of the "full faith and credit" given to state judicial proceedings. Gottfried v. Med. Planning Servs., Inc., 142 F.3d 326, 330 (6th Cir. 1998).
As the magistrate judge observed, the plaintiff's complaint consists of a direct attack on the Oscoda County Circuit Court consent order. Although the plaintiff's substantive argument has merit, this Court does not have the authority to grant him the relief he seeks. This Court could not grant that relief without declaring that the state court order was wrongly decided in light of federal law. See Catz v. Chalker, 142 F.3d 279, 293 (6th Cir. 1998) ("Where federal relief can only be predicated upon a conviction that the state court was wrong, it is difficult to conceive the federal proceeding as, in substance, anything other than a prohibited appeal of the state-court judgment"). Although the issue of ERISA preemption was not raised by the plaintiff in the underlying state action, the plaintiff's claim in this Court for relief is inextricably intertwined with the state court's order requiring the plaintiff to reimburse the State of Michigan for incarceration expenses. Therefore, the Court lacks jurisdiction and the case must be dismissed.
III.
Although the state order requiring the plaintiff to reimburse the State of Michigan for his incarceration expenses from his pension fund likely violates ERISA, this Court lacks jurisdiction under the Rooker-Feldman doctrine to hear this complaint.
Accordingly, it is ORDERED that the Magistrate Judge's Report and Recommendation [dkt # 10] is ADOPTED.
It is further ORDERED that the defendants' motion to dismiss (dkt # 4] is GRANTED.
It is further ORDERED that the plaintiff's motion for summary judgment [dkt # 7] is DENIED as moot.