Opinion
06 Civ. 5681 (SAS).
February 6, 2007
Plaintiff (Pro Se): Joshua Bernstein, Brooklyn, NY.
For Defendant: Anthony Tomari, Assistant Attorney General of the State of New York, New York, NY.
OPINION AND ORDER
I. INTRODUCTION
Joshua Bernstein, proceeding pro se, seeks a declaratory judgment stating that he was denied procedural and substantive due process in violation of the Fourteenth Amendment of the Constitution of the United States. The alleged violations of due process arise out of proceedings in the Appellate Division, Second Department, Supreme Court of the State of New York, that resulted in Bernstein's disbarment by an order issued on August 20, 2001, pursuant to section 90 of the New York Judiciary Law. The State of New York moves to dismiss this declaratory judgment action pursuant to (1) Federal Rule of Civil Procedure 12(b)(6) because Bernstein's claim is barred by the doctrines of claim and issue preclusion; and (2) Federal Rule of Civil Procedure 12(b)(1) based on the Rooker-Feldman doctrine, which precludes this Court's exercise of subject matter jurisdiction. For the following reasons, defendant's motion to dismiss is granted.
See Amended Complaint ("Compl.") ¶ 1.
See id. ¶¶ 6, 8. See also In re Bernstein, 729 N.Y.S.2d 520 (2d Dep't 2001), appeal dismissed, 97 N.Y.2d 725 (2002).
See Notice of Motion to Dismiss ¶ 1; Memorandum of Law in Support of the Motion to Dismiss by the State of New York ("Def. Mem.") at 1.
See Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983).
The Complaint is poorly drafted, somewhat difficult to understand, and lacking in factual detail, so it is necessary to rely on the factual findings of the Second Department in In re Bernstein, 729 N.Y.S.2d at 520-21. Because plaintiff is proceeding pro se, I will construe plaintiff's Complaint liberally in deciding this motion to dismiss. See Haines v. Kerner, 404 U.S. 519, 520 (1972).
Disciplinary proceedings were instituted against Bernstein by the Grievance Committee for the Second and Eleventh Judicial Districts. The petition contained three charges of professional misconduct, including a charge that Bernstein "converted clients [sic] funds that were entrusted to him as a fiduciary, in violation of Code of Professional Responsibility DR 9-102(a) and DR 1-102(a)(3) and (7) ( 22 NYCRR 1200.46[a]; 1200.3[a][3], [7])." The Appellate Division, Second Department, ordered that the matter be referred to a Special Referee for a hearing and report. Following a hearing, the Special Referee sustained all of the charges. The Grievance Committee then moved to confirm the Special Referee's Report, a motion that Bernstein opposed. In its decision confirming the Special Referee's Report, the Second Department made the following findings:
In re Bernstein, 729 N.Y.S.2d at 520.
On or about July 1, 1999, Dr. Alexander Hollander, a dentist, was arrested pursuant to a 36-count criminal indictment charging him with grand larceny in the third degree (two counts), scheme to defraud in the first degree, offering a false instrument for filing in the first degree (27 counts), falsifying business records in the first degree (three counts), and perjury in the first degree (three counts). The respondent [Bernstein] represented Dr. Hollander at his arraignment, and bail was set at $50,000. Also on July 1, 1999, the respondent received $4,400 in cash on behalf of Dr. Hollander for bail. The respondent failed to apply those funds towards Dr. Hollander's bail and failed to return the money to Dr. Hollander or his representative upon demand. Instead, he converted the $4,400 to his own use and benefit.
Id.
The Second Department sustained the charge of conversion and ordered that "pursuant to Judiciary Law § 90, effective immediately, the respondent, Joshua Bernstein, is disbarred, and his name is stricken from the roll of attorneys."
Id. at 521.
The Court of Appeals dismissed Bernstein's appeal of his disbarment. Bernstein then made "a combined motion in the Appellate Division for reargument and, in the event of affirmance, for leave to appeal. Same were summarily denied, without Opinion." Bernstein also made "an appeal `as of right' to the Court of Appeals" which was "dismissed on the basis that no criterium [sic] for an `as of right' appeal was met."
See In re Bernstein, 97 N.Y.2d 725 (2002) (summary order).
Plaintiff's Memorandum of Law in Opposition ("Pl. Mem.") at 1.
Id. Bernstein uses the terms "as of right" and "judicial proceedings" in an attempt to distinguish himself from the plaintiffs in Feldman.
In his opposition to the motion to confirm the Referee's Report, Bernstein argued that he had a right to a retaining lien on the $4,400 that was to be used for Dr. Hollander's bail "pursuant to an express oral retainer agreement made in open Court between the Plaintiff and said client at the latter's arraignment therein, in the presence of the prosecutor thereon, upon which retainer agreement, with respect to fees to be paid to the Plaintiff, the client defaulted." Bernstein also "brought to the Appellate Division's attention the fact that a provision in the Lawyer's Code of Professional Responsibility explicitly provides that it is NOT a violation thereof for an attorney to act pursuant to a `recognized lien'." However, the Second Department concluded that "[t]he respondent presented no mitigating circumstances at the hearing," and that "the fact remains that [Bernstein] allowed his client to remain in prison while he converted to his own use money that was supposed to be used for bail."
See In re Bernstein, 729 N.Y.S. 2d at 521.
Compl. ¶ 6.
Pl. Mem. at 3. Plaintiff does not specify which Lawyer's Code of Professional Responsibility he refers to, nor the "provision" in that Code on which he relies.
In re Bernstein, 729 N.Y.S.2d at 521.
Bernstein's allegations of due process violations, and his position that the Rooker-Feldman doctrine does not bar this Court's exercise of subject matter jurisdiction, are both based on his conclusion that the New York State court proceedings did not constitute "judicial proceedings" and, as such, could neither legally deprive him of his property by disbarment, nor present an obstacle to this Court's exercise of jurisdiction.
See Pl. Mem. at 1-2. See also Compl. ¶¶ 7-10.
III. LEGAL STANDARD
A. Rule 12(b)(1)
Rule 12(b)(1) provides for the dismissal of a claim when the federal court "lacks jurisdiction over the subject matter." Plaintiff bears the burden of establishing subject matter jurisdiction by a preponderance of the evidence. In considering a motion to dismiss for lack of subject matter jurisdiction, the court must assume the truth of the material factual allegations contained in a complaint. Also, "[i]t is well established that the submissions of a pro se litigant must be construed liberally and interpreted `to raise the strongest arguments that they suggest.'" However, "jurisdiction must be shown affirmatively" and courts do not "draw inferences from the complaint favorable to plaintiffs" who assert jurisdiction but do not affirmatively show it. In fact, "where jurisdictional facts are placed in dispute, the court has the power and obligation to decide issues of fact by reference to evidence outside the pleadings, such as affidavits."
B. Rule 12(b)(6) Motion to Dismiss
See Luckett v. Bure, 290 F.3d 493, 496-97 (2d Cir. 2002).
See Triestman v. Federal Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (citing J.S. ex rel. N.S. v. Attica Cent. Schs., 386 F.3d 107, 110 (2d Cir. 2004)).
Id. (quoting Pabon v. Wright, 459 F.3d 241, 248 (2d Cir. 2006)).
Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998) (citation omitted).
Attica Cent. Schs., 386 F.3d at 110.
LeBlanc v. Cleveland, 198 F.3d 353, 356 (2d Cir. 1999). Accord Attica Cent. Schs., 386 F.3d 107.
A court may not dismiss an action pursuant to Rule 12(b)(6) unless "`it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" The task of the court is "merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Although "[g]enerally, consideration of a motion to dismiss under Rule 12(b)(6) is limited to consideration of the complaint itself," "the complaint is deemed to include any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference." When deciding a motion to dismiss, courts "accept all factual allegations as true and draw all reasonable inferences in plaintiff's favor." "While the pleading standard is a liberal one, bald assertions and conclusions of law will not suffice."
Faulkner v. Beer, 463 F.3d 130, 133 (2d Cir. 2006) (quoting Twombly v. Bell Atl. Corp., 425 F.3d 99, 106 (2d Cir. 2005)). Accord Jones v. Bock, ___ U.S. ___, 2007 WL 135890, at *10 (Jan. 22, 2007) ("A complaint is subject to dismissal for failure to state a claim if the allegations, taken as true, show the plaintiff is not entitled to relief.").
Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 176 (2d Cir. 2004) (quotation marks and citation omitted).
Faulkner, 463 F.3d at 134.
Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). Accord Faulkner, 463 F.3d at 134 (holding that it is permissible to consider the "full text of documents partially quoted in complaint" and "documents relied upon by plaintiff in drafting the complaint and integral to the complaint") (citing San Leandro Emergency Med. Group Profit Sharing Plan v. Philip Morris Cos., 75 F.3d 801, 808-09 (2d Cir. 1996), and Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir. 1991)).
Ofori-Tenkorang v. American Int'l Group, Inc., 460 F.3d 296, 298 (2d Cir. 2006).
Amron v. Morgan Stanley Inv. Advisors, Inc., 464 F.3d 338, 344 (2d Cir. 2006).
IV. APPLICABLE LAW
1. Claim Preclusion
A. Preclusion
Claim preclusion, or res judicata, is the long-accepted principle that "`a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.'" "The doctrine of res judicata bears on `the effect of a judgment in foreclosing litigation of a matter that never has been litigated, because of a determination that it should have been advanced in an earlier suit.'" Claim preclusion ordinarily applies "if the earlier decision was (1) a final judgment on the merits, (2) by a court of competent jurisdiction, (3) in a case involving the same parties or their privies, and (4) involving the same cause of action."
San Remo Hotel, L.P. v. San Francisco, 545 U.S. 323, 336 n. 16 (2005) (quoting Allen v. McCurry, 449 U.S. 90, 94 (1980)).
Nestor v. Pratt Whitney, 466 F.3d 65, 70 (2d Cir. 2006) (quoting Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 77 n. 1 (1984)).
Stephenson v. Dow Chem. Co., 273 F.3d 249, 259 (2d Cir. 2001), aff'd in part, vacated in part on other grounds, 539 U.S. 111 (2003).
"`[A] federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment is entered.'" Because federal courts must look to state law in each case, "[t]he doctrine varies in its effect from jurisdiction to jurisdiction, depending chiefly on how courts define the claims that have or could have been litigated, and on how much weight is put on the goals of preclusion (e.g., finality and efficiency)." New York applies a "pragmatic" test in order to determine "whether particular claims are part of the same transaction" for purposes of claim preclusion, analyzing "`whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage.'" This is so even if other claims "`arising out of the same transaction or series of transactions'" are "`based upon different theories or if seeking a different remedy. . . .'"
Jacobson v. Fireman's Fund Ins. Co., 111 F.3d 261, 265 (2d Cir. 1997) (quoting Migra, 465 U.S. at 81).
Nestor, 466 F.3d at 70.
Chen v. Fisher, 6 N.Y.3d 94, 100-01 (2005) (quoting Restatement (Second) of Judgments § 24(2) (1982)).
Id. at 100 (quoting O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357 (1981)).
2. Issue Preclusion
Issue preclusion, or collateral estoppel, precludes relitigation of an issue where "(1) the identical issue was raised in a previous proceeding; (2) the issue was actually litigated and decided in the previous proceeding; (3) the party had a full and fair opportunity to litigate the issue; and (4) the resolution of the issue was necessary to support a valid and final judgment on the merits." "The burden of showing that an issue raised in a subsequent proceeding is identical to one that was raised and necessarily decided in the prior action rests squarely on the party moving for preclusion." Then, "the opponent must demonstrate the absence of a full and fair opportunity to litigate." B. The Rooker-Feldman Doctrine
Uzdavines v. Weeks Marine, Inc., 418 F.3d 138, 146 (2d Cir. 2005) (quotation marks and citation omitted). Cf. Jeffreys v. Griffin, 1 N.Y.3d 34, 39 (2003) (holding that under New York law "issue preclusion gives conclusive effect to an administrative agency's quasi-judicial determination when two basic conditions are met: (1) the issue sought to be precluded is identical to a material issue necessarily decided by the administrative agency in a prior proceeding; and (2) there was a full and fair opportunity to contest this issue in the administrative tribunal").
Cobb v. Pozzi, 363 F.3d 89, 113 (2d Cir. 2004) (quotation marks omitted). Accord Jeffreys, 1 N.Y.3d at 39.
Jeffreys, 1 N.Y.3d at 39.
In Rooker, the Supreme Court held that federal district courts "lacked the requisite appellate authority, for their jurisdiction was `strictly original.' Among federal courts, the Rooker Court clarified, Congress had empowered only [the Supreme Court] to exercise appellate authority `to reverse or modify' a state-court judgment." In Feldman, the Court further clarified that state court proceedings that were "judicial in nature" were reviewable only by the Supreme Court or by the highest court of the state. A denial of bar admission to two men who had not graduated from ABA accredited law schools by the Court of Appeals for the District of Columbia was considered a proceeding that was "judicial in nature" by the Feldman Court, and therefore not reviewable by the district court.
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005) (internal citations omitted). Accord Rooker, 263 U.S. at 416.
Feldman, 460 U.S. at 476. Accord Exxon Mobil, 544 U.S. at 285.
Feldman, 460 U.S. at 479-82.
The Second Circuit has recently revised its approach to the Rooker-Feldman doctrine in light of the Supreme Court's decision in Exxon Mobil. Before Exxon Mobil, the Second Circuit held that " Rooker-Feldman was effectively coextensive with doctrines of claim and issue preclusion." However, " Exxon Mobil teaches that Rooker-Feldman and preclusion are entirely separate doctrines." Specifically, the Rooker-Feldman doctrine "is confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments."
See Hoblock v. Albany County Bd. of Elections, 422 F.3d 77, 84 (2d Cir. 2005).
Id. Accord Moccio v. New York State Office of Ct. Admin., 95 F.3d 195, 199-200 (2d Cir. 1996).
Hoblock, 422 F.3d at 85.
Exxon Mobil, 544 U.S. at 284.
Following the Court's holding in Exxon Mobil, the Second Circuit has identified four requirements that must be met in order for the Rooker-Feldman doctrine to apply. The first and fourth of these requirements "may be loosely termed procedural," and the second and third of these requirements "may be termed substantive." These factors are, "First, the federal-court plaintiff must have lost in state court. Second, the plaintiff must `complain of injuries caused by [a] state-court judgment[.]' Third, the plaintiff must `invit[e] district court review and rejection of [that] judgment .' Fourth, the state-court judgment must have been `rendered before the district court proceedings commenced' — i.e., Rooker-Feldman has no application to federal-court suits proceeding in parallel with ongoing state-court litigation." 1. The Substantive Rooker-Feldman Requirements
Hoblock, 422 F.3d at 85.
Id. (quoting Exxon Mobil, 544 U.S. at 284).
The Second Circuit noted that "[i]f a federal plaintiff `present[s] 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 Rooker-Feldman does not bar jurisdiction over that claim (although state preclusion doctrine would likely bar the claim on Full Faith and Credit grounds). Plaintiff's claim must truly be "independent" in order to escape the Rooker-Feldman bar: "Just presenting in federal court a legal theory not raised in state court, however, cannot insulate a federal plaintiff's suit from Rooker-Feldman if the federal suit nonetheless complains of injury from a state-court judgment and seeks to have that state-court judgment reversed."
Id. at 86 (citation omitted). Accord Exxon Mobil, 544 U.S. at 293.
Hoblock, 422 F.3d at 86.
The Second Circuit has also provided a "formula" intended to "guide our inquiry" into whether the first substantive requirement of Rooker-Feldman Feldman has been met — that the plaintiff in a federal suit complains of injuries caused by a state-court judgment:
[A] federal suit complains of injury from a state-court judgment, even if it appears to complain only of a third party's actions, when the third party's actions are produced by a state-court judgment and not simply ratified, acquiesced in, or left unpunished by it. Where a state-court judgment causes the challenged third-party action, any challenge to that third-party action is necessarily the kind of challenge to the state judgment that only the Supreme Court can hear.
Id. at 88 (emphasis added).
However, even if the injury that plaintiff complains of in a federal suit is the same as the injury that plaintiff complained of in her state suit, if that injury has not in some way been caused by a judgment of the state court, then "[t]he fact that the state court chose not to remedy the injury does not transform the subsequent federal suit on the same matter into an appeal, forbidden by Rooker-Feldman, of the state-court judgment." 2. The Procedural Rooker-Feldman Requirements
Id. However, "[t]he subsequent federal suit could, of course, be barred by ordinary preclusion principles." Id. at n. 6. For examples illustrating the above formula, see id. at 86-87.
The Hoblock court's first characterization of the two "procedural" Rooker-Feldman requirements is, as stated above: (1) "the federal-court plaintiff must have lost in state court" and (4) "the state-court judgment must have been `rendered before the district court proceedings commenced.'" Later in its opinion, however, the Hoblock court re-stated the procedural requirements in the following manner: "1) the federal suit must follow the state judgment; and 2) the parties in the state and federal suits must be the same."
Id. at 85 (emphasis added).
Id. at 89 (emphasis added).
While the phrase "the parties in the state and federal suits must be the same" implies that complete party-identity is required, the Hoblock court applied the concept of privity to determine if the plaintiffs in the federal suit were the "same" as the plaintiffs who "lost in state court." At the time Hoblock was decided, the Supreme Court had not yet defined the party-identity requirement. Since then, however, the Supreme Court has clarified that simply being in privity with a state-court plaintiff as defined by federal preclusion principles does not satisfy the party-identity Rooker-Feldman requirement. In Lance, the Court held that "[t]he Rooker-Feldman doctrine does not bar actions by nonparties to the earlier state-court judgment simply because, for purposes of preclusion law, they could be considered in privity with a party to the judgment." The Court added, however, that "we need not address whether there are any circumstances, however limited, in which Rooker-Feldman may be applied against a party not named in an earlier state proceeding — e.g., where an estate takes a de facto appeal in a district court of an earlier state decision involving the decedent." Therefore, while complete identity of the parties may not always be required in order for Rooker-Feldman to apply, it is important to heed the warning of the Court that "[i]ncorporation of preclusion principles into Rooker-Feldman risks turning that limited doctrine into a uniform federal rule governing the preclusive effect of state-court judgments, contrary to the Full Faith and Credit Act."
Id. at 90 ("While we recognize that claim and issue preclusion are distinct from the Rooker-Feldman doctrine, we believe that federal case law governing the application of preclusion doctrines to nonparties should guide the analogous inquiry in the Rooker-Feldman context.").
See Lance v. Dennis, 546 U.S. 459, ___, 126 S. Ct. 1198, 1200 (2006) ("We . . . address whether the Rooker-Feldman doctrine bars the plaintiffs from proceeding because they were in privity with a party in [ People ex rel.] Salazar [ v. Davidson, 79 P.3d 1221 (Colo. 2003)]. We conclude it does not.").
Id. at ___, 126 S. Ct. at 1202.
Id.
Id. at ___, 126 S. Ct. at 1202-03 (emphasis added).
V. DISCUSSION
A. Claim Preclusion
The Second Department's order disbarring Bernstein was "(1) a final judgment on the merits, (2) by a court of competent jurisdiction, (3) in a case involving the same parties or their privies." Under New York's pragmatic test for determining whether a claim is part of the same "transaction," the judgment of the New York State courts involved "the same cause of action" as Bernstein's federal court claim. Bernstein's claim that "he has been denied procedural and substantive Due Process" by the state disbarment proceedings is related in both "`origin'" and "`motivation'" to his claim to the New York Court of Appeals that he ought not to have been disbarred. Bernstein's Due Process claims "`form a convenient trial unit'" with the disbarment proceedings, as Bernstein could have raised his Due Process concerns in the New York courts at any time during the proceedings. Further, treatment of Bernstein's Due Process claims "`as a unit'" with his disbarment appeal to the New York Court of Appeals certainly "`conforms to the parties' expectations.'" Bernstein could have, and should have, raised any Due Process concerns he had regarding the Second Department's proceedings when he appealed to the Court of Appeals. And even though Bernstein now brings a federal declaratory judgment action rather than an action for reinstatement — which is a different remedy than he sought in state court — the claim still arises out of the "`same transaction or series of transactions'" for purposes of claim preclusion. Consequently, because claim preclusion applies in these circumstances, Bernstein has failed to state a claim under Rule 12(b)(6) and his case is dismissed.
Stephenson, 273 F.3d at 259.
Compl. ¶ 1.
Chen, 6 N.Y.3d at 100-01 (quoting Restatement (Second) of Judgments § 24(2) (1982)).
Id. In fact, in paragraph 3 of his Complaint, Bernstein cryptically states that "State Court remedies to avoid the Due Process violations complained of herein have been exhausted," implying that Bernstein in fact did raise his Due Process concerns in state court.
Id. (quoting Restatement (Second) of Judgments § 24(2) (1982)).
See id. at 100 (quoting O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357 (1981)).
B. Rooker-Feldman
Alternatively, even when examined in the light of the Supreme Court's narrowing of the Rooker-Feldman doctrine in Exxon Mobil and Lance, this Court may not exercise jurisdiction over Bernstein's claim, as jurisdiction is barred under Rooker-Feldman. Rooker-Feldman's two procedural requirements easily apply to Bernstein. First, Bernstein "lost in state court." Second, the state court judgment was "rendered before the district court proceedings commenced."
While the Supreme Court has not fully clarified the party-identity issue, it is at least clear that the confusion surrounds the party against whom the Rooker-Feldman doctrine is invoked, not the party who is invoking it (here the State of New York).
Hoblock, 422 F.3d at 85.
The two substantive requirements apply to Bernstein as well, although he has tried, through clever pleading, to sidestep these factors. Bernstein has attempted to present his claim as independent from his appeal of the state court disbarment order by stating that he seeks only a declaratory judgment from this Court that he was denied due process in the course of, and not as a result of, the judicial proceedings that led to the state court judgment. As such, Bernstein asks this Court to believe that he is not seeking review and reversal of the state court judgment because he is not seeking reinstatement to the bar.
See Compl. ¶ 1.
This is sheer sophistry. If this Court were to declare that Bernstein was denied due process during the state court proceedings, it would effectively be reversing a judgment of the state court. Bernstein's Complaint effectively constitutes an appeal of a state court judgment. However, Bernstein may only appeal the state court judgment to the Supreme Court of the United States. "Can a federal plaintiff avoid Rooker-Feldman simply by clever pleading — by alleging that actions taken pursuant to a court order violate his rights without ever challenging the court order itself? Surely not." In sum, the Rooker-Feldman doctrine, as recently circumscribed by the Supreme Court, still divests this Court of subject matter jurisdiction, thereby mandating dismissal of this case.
See Feldman, 460 U.S. at 476. Accord Exxon Mobil, 544 U.S. at 285.
Hoblock, 422 F.3d at 88.
VI. CONCLUSION
For the foregoing reasons, defendant's motion is granted. The Clerk of the Court is directed to close this motion (Documents #5-8) and this case.
SO ORDERED: