Opinion
Case No. 01-CV-10298-BC
October 23, 2002
MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(1) (Dkt. 4)
I. RECOMMENDATION
For the reasons set forth below, IT IS RECOMMENDED that Defendant's motion to dismiss for lack of subject matter jurisdiction be GRANTED, and that the case be DISMISSED WITH PREJUDICE because the Court lacks jurisdiction under the Rooker-Feldman doctrine. II. REPORT A. INTRODUCTION and FACTS
In the event that this Report and Recommendation is adopted, the following pending motion will be moot: Plaintiff's Motion for Summary Disposition (Dkt. 7).
Plaintiff Ries initiated this pro se action by filing what he entitled a "Federal Question Complaint." (Dkt. 1.) Ries is a state prisoner currently housed at the Mid-Michigan Correctional Facility in St. Louis, Michigan. In 1995, when Ries was approximately sixty years old, he was convicted of three counts of second degree criminal sexual conduct, MICH. COMP. LAWS § 750.520c, and sentenced to three to fifteen years' imprisonment. In 1996, after determining that Ries had an asset in the form of a monthly pension from General Motors, the treasurer for the State of Michigan filed a complaint in Oscoda County (Michigan) Circuit Court against Ries seeking reimbursement for the cost of his incarceration under the Michigan State Correctional Facility Reimbursement Act ("SCFRA"). MICH. COMP. LAWS § 800.401 et seq.
The Michigan State Correctional Facility Reimbursement Act directs that, upon incarceration, each prisoner shall complete a Prisoner Assets Information Form, disclosing all of his or her assets. MICH. COMP. LAWS § 800.401b (West 2002). The form is forwarded to the state attorney general's office, and,
[i]f the attorney general upon completing the investigation . . . has good cause to believe that a prisoner has sufficient assets to recover not less than 10% of the estimated cost of care of the prisoner or 10% of the estimated cost of care of the prisoner for 2 years, whichever is less, the attorney general shall seek to secure reimbursement for the expense of the state of Michigan for the cost of care of that prisoner. . . . Not more than 90% of the value of the assets of the prisoner may be used for purposes of securing costs and reimbursement under this act.
MICH. COMP. LAWS § 800.403 (West 2002). The Act imposes the following procedure for securing reimbursement:
The circuit court shall have exclusive jurisdiction over all proceedings under this act. The attorney general may file a complaint in the circuit court for the county from which a prisoner was sentenced, stating that the person is or has been a prisoner in a state correctional facility, that there is good cause to believe that the prisoner has assets, and praying that the assets be used to reimburse the state for the expenses incurred or to be incurred, or both, by the state for the cost of care of the person as a prisoner.
MICH. COMP. LAWS § 800.404(1) (West 2002).
In September 1996, Oscoda County Circuit Court Judge J. Richard Ernst entered a Stipulation and Final Order in the case, ordering that Ries must reimburse the State of Michigan from his pension funds in the amount of $1,400 per month until September 3, 1997, and $650 each month thereafter until he is released from prison. (Oscoda Case No. 96-002408-CZ, Order attach. to Compl.) The order was stipulated to and signed on Ries's behalf by his counsel, attorney David M. Hartsook.
The order is not entirely clear regarding the involvement of Plaintiffs ex-wife, Sandra Ries. First, it provides that "[t]he funds currently held in receivership by Defendant Sandra Ries and those due in the form of a General Motors Pension shall be awarded to Defendant Gary L. Ries and will be his to dispose of as he wishes except as described above." (Order at ¶ 5.) Despite awarding the pension to Gary Ries, the order then goes on to state that "[a]ny monies paid by General Motors into Defendant Gary L. Ries' #243211 prison account after August 15, 1996, shall be paid to `Sandra Ries' at 22 S. Hacker, Brighton, Michigan 48116." (Order at ¶ 7.) Apparently, it is Sandra Ries's responsibility to send the reimbursement check each month to the State of Michigan. There is no indication in the record of whether Gary and Sandra Ries were divorced prior to 1996 and she was awarded a portion of Gary Ries's pension pursuant to a Qualified Domestic Relations Order, or whether they were still married at the time of the reimbursement action. However, because the answers to these questions would not alter the fact that Plaintiff Ries is seeking federal court review of a state court order, they are not necessary to the resolution of this case.
Five years later, in August 2001, Ries filed this federal court action against the Michigan State Treasurer, claiming that the 1996 state court order is in violation of the Employee Retirement Income Securities Act ("ERISA"), 29 U.S.C. § 1000 et seq., a federal statute that "supersede[s] any and all state laws" to the extent that those laws "relate to" any employee benefit plan that is subject to ERISA. 29 U.S.C. § 1144 (a). Specifically, Plaintiff claims that the state court order violates ERISA's provision that benefits provided under a pension plan may not be assigned, regardless of whether the assignment is voluntary or involuntaly. 29 U.S.C. § 1056 (d)(1) Roberts v. Baugh, 986 F. Supp. 1074, 1076 (E.D. Mich. 1997). Plaintiff asserts that the state court order directing him to pay a portion of his monthly pension benefit to the State of Michigan constitutes a prohibited assignment. Therefore, Plaintiff seeks a declaration by this Court that the state court order is void because it is in violation of and preempted by ERISA, and further seeks as compensatory damages the return of the more than $55,000 he has paid to the State of Michigan pursuant to the order, as well as $50,000 in punitive damages "because the Defendant knew or should have known that the award violated Federal Law." (Compl., Dkt. 1 at Prayer for Relief.)
By order of U.S. District Judge David M. Lawson, the case was referred to this Magistrate Judge for general case management. (Dkt. 3.) Pending is Defendant's motion to dismiss (Dkt. 4), to which Plaintiff filed a response. (Dkt. 6.) Upon review of the motion, I conclude that pursuant to E.D. Mich. LR 7.1(e)(2), it is ready for Report and Recommendation without oral argument.
B. DEFENDANT'S MOTION TO DISMISS
Defendant moves for dismissal under Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of jurisdiction over the subject matter. (Dkt. 4 at 1.) Defendant points to the fact that the Oscoda County Circuit Court order was entered in September of 1996, and argues that, if Plaintiff Ries believed that the order was in error, he could have filed an appeal in the state courts, but he did not do so. Defendant asserts that Plaintiff has no basis for attacking the order, which was stipulated to by Plaintiffs counsel, in a collateral federal district court action. Defendant further asserts that the collection of prison reimbursement costs under the SCFRA constitutes the collection of a "tax" as that term is defined under the Tax Injunction Act, and therefore this action is barred by 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. Defendant also contends that he is entitled to Eleventh Amendment immunity. (Dkt. 4 at 5-7.)
Plaintiff responds that this Court has subject matter jurisdiction based upon ERISA's preemption provision, which expressly states that it "supersede[s] any and all state laws" relating to ERISA-governed pensions. (Pl.'s Resp., Dkt. 6 at 3.) In support, Plaintiff points to the case of Roberts v. Baugh, 986 F. Supp. 1074 (E.D. Mich. 1997). In Roberts, the Michigan State Treasurer filed a complaint for reimbursement against prisoner Baugh and Chrysler Corporation in the Macomb County Circuit Court pursuant to the Michigan State Correctional Facility Reimbursement Act. The treasurer sought an order directing Chrysler to deposit Baugh's pension benefits into his prison account, so that the funds could be used to partially reimburse the state for the costs of incarceration. The case was removed to federal court by Chrysler on the grounds that the order sought would violate ERISA's anti-assignment provision. Following removal, the federal district court granted summary judgment to Chrysler, finding that the treasurer's "state law reimbursement claim under the SCFRA violates ERISA and is thereby preempted." Id. at 1078.
Although the facts of this case are very similar to Roberts, a crucial distinction nevertheless exists — this case sits in a much different procedural posture than Roberts. In Roberts, the state's action for reimbursement itself was removed to federal court, and the federal issue of ERISA preemption was raised prior to judgment. Here, however, the reimbursement action was carried out to completion in the form of a final order issued by the state court in 1996, no appeal from the order was taken, and the federal issue of ERISA preemption was only raised five years later in this collateral federal court action.
In light of the procedural posture of this case, I suggest that this Court lacks subject matter jurisdiction under the Rooker-Feidman doctrine, which prohibits a federal district court from reviewing a state court order for alleged federal law errors. The Sixth Circuit Court of Appeals recently reviewed the foundation of the Rooker-Feidman 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; see also Anderson v. Charter Township of Ypsilanti, 266 F.3d 487, 492 (6th Cir. 2001).Tropf v. Fidelity Nat'l Title Ins. Co., 289 F.3d 929, 936 (6th Cir. 2002).
Defendant here did not specifically cite the Rooker-Feldman doctrine in his motion to dismiss for lack of subject matter jurisdiction, but he did arguably raise its elements when stating that Plaintiff should not be allowed to collaterally attack a state court order in federal district court, even if the attack is based upon a federal law. In any event, it is immaterial whether Defendant expressly mentioned it, because the Rooker-Feldman doctrine is jurisdictional, and therefore it must be raised sua sponte by the Court if it is not raised by the parties. See Worldwide Church of God v. McNair, 805 F.2d 888, 890-91 (9th Cir. 1990).
Furthermore, the doctrine applies even though the issue of ERISA preemption was not raised and decided upon by the state court in the underlying action. See Blue Cross Blue Shield of Maryland, Inc. v. Weiner, 868 F.2d 1550, 1555 (11th Cir. 1989). All that is required is that the plaintiff had a "reasonable opportunity to raise the federal claim in the state court proceedings." Id. Moreover, lower federal courts lack jurisdiction to review any federal claims that are "inextricably intertwined" with a state court's decision. See Feldman, 460 U.S. at 486-87. A plaintiffs federal claim is inextricably intertwined if the claim can succeed only to the extent that the state court wrongly decided the issues before it. 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.'") (quoting Keene Corp. v. Cass, 908 F.2d 293, 296-97 (8th Cir. 1990)). That is precisely what Plaintiff claims here, stating, "It never should have occurred and they now owe Plaintiff." (Dkt. 6 at 5.) Because the relief Plaintiff Ries requests would necessarily entail this Court declaring that the state court order was wrongly decided in light of federal law, Plaintiffs claim is inextricably intertwined with the state court's order.
The Rooker-Feldman doctrine also applies despite the fact that Plaintiff raises a nonconstitutional challenge to the state court order. Weiner, 868 F.2d at 1554. One treatise explains that
Rooker-Feldman applies even where a state court judgment is challenged as "void" because based on a claim preempted by federal law. Lower federal courts still have no power to set aside the state court judgment. Redress must be sought through the state appellate process, and ultimately, if necessary, review may be sought in the U.S. Supreme Court.
William W. Schwarzer, et al., Federal Civil Procedure Before Trial § 2:1381.7, at 2E-94 (2001). Finally, although there is an exception to the Rooker-Feldman doctrine where a plaintiff makes a claim facially attacking the constitutionality of a state statute, see Patmon v. Michigan Supreme Court, 224 F.3d 504, 509 (6th Cir. 2000), this is not such a case. Plaintiff specifically states that "Plaintiff has never attacked the constitutionality of the state law but rather asserts that he is exempt by virtue of the federal law." (Pl.'s Resp., Dkt. 6 at 1.)
Accordingly, I suggest that this case should be dismissed with prejudice for lack of subject matter jurisdiction pursuant to the Rooker-Feldman doctrine. In light of this recommendation which rests upon jurisdictional grounds, I find that it is not necessary to reach the question of whether reimbursement under the SCFRA constitutes the collection of a state tax under the Tax Injunction Act, or whether Defendant is entitled to immunity under the Eleventh Amendment.
III. REVIEW
The parties to this action may object to and seek review of this Report and Recommendation within ten (10) days of service of a copy hereof as provided for in 28 U.S.C. § 636 (b)(1). Failure to file specific objections constitutes a waiver of any further right of appeal. Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); Howard v. Sec'y of Health Human Servs., 932 F.2d 505 (6th Cir. 1991); United States v. Walters, 638 F.2d 947 (6th Cir. 1981). The parties are advised that making some objections, but failing to raise others, will not preserve all the objections a party may have to this Report and Recommendation. Willis v. Sec'y of Health Human Servs., 931 F.2d 390, 401 (6th Cir. 1991); Smith v. Detroit Fed'n of Teachers Local 231, 829 F.2d 1370, 1373 (6th Cir. 1987). Pursuant to E.D. Mich. LR 72.1(d)(2), a copy of any objections is to be served upon this Magistrate Judge.