Opinion
Cause No. IP00-0739-C-T/G
July 12, 2000
ENTRY DISCUSSING PLAINTIFFS' MOTION TO CONVERT OR EXCLUDE
I.
The plaintiffs have responded to the defendants' motion for judgment on the pleadings with a motion to convert that motion to one for summary judgment or in the alternative to exclude matters relied upon outside the pleadings. The defendants, in turn, have opposed the plaintiffs' opposition.
As used in this Entry, the motion to convert the defendants' motion for judgment on the pleadings to a motion for summary judgment or in the alternative to exclude matters relied upon outside the pleadings is referred to as the "motion to convert or to exclude" and the term "state court litigation" refers to the cases of Candlelight Properties, L.L.C. v. MHC Operating Limited Partnership, No. 03D01-9905-CP-417, and MHC Lending Limited Partnership v. Candlelight Properties, L.L.C., No. 03D01-9907-CR-888, each in the Bartholomew Superior Court 1.
For the reasons explained in this Entry, the motion to convert or to exclude must be denied.
A.
It is common for the federal courts to encounter sequential litigation of various sorts. This can be manifested in all aspects of a case or merely through certain claims or counterclaims. Under most circumstances, sequential litigation — in the sense of repetitive litigation — is improper. The interests in finality, so long as the issues are carefully parsed, is compelling: "Respecting judgments is the norm in our legal culture: the full faith and credit clause and common law principles of res judicata combine to make respect for judgments the rule." Ryan v. United States, 2000 WL 715005, *5 (7th Cir. June 5, 2000).
The motion for judgment on the pleadings is based on the existence and outcome of certain prior litigation in the Indiana state courts, juxtaposed analytically with the claims and parties in the present case. The motion for judgment on the pleadings relies on three sorts of documents, viz., (1) the decision and other documents from the state court litigation, (2) a "chart" purporting to compare the allegations in the present case with the claims asserted in and the disposition of the state court litigation, and (3) two unpublished decisions from federal district courts. The latter two categories of documents are not a source of controversy, though reliance on the first of these in the procedural posture presented has sparked some dispute.
The motion for judgment on the pleadings relies on two related doctrines, those of res judicata and Rooker-Feldman. Rooker-Feldman takes its name from two Supreme Court cases, District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983), and Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923).
! Under the principle of res judicata, or claim preclusion, "[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." Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981).
! The Rooker-Feldman doctrine prohibits federal courts from exercising subject matter jurisdiction over claims seeking review of state court judgments. See Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-16(1923); District of Columbia Court of Appeals v. Feldman, 460
U.S. 462, 482-86 (1983). In assessing the applicability of the Rooker-Feldman doctrine, "the fundamental and appropriate question to ask is whether the injury alleged by the federal plaintiff resulted from the state court judgment itself or is distinct from that judgment." Garry v. Geils, 82 F.3d 1362, 1365 (7th Cir. 1996).
For the present, it is sufficient to note that each of these doctrines operates to preclude a federal court from adjudicating claims bearing a certain identity or relationship with claims that were or could have been resolved in a prior judicial proceeding. Rooker-Feldman, however, impacts on the court's subject matter jurisdiction over a claim or claims, see, e.g., Levin v. ARDC, 74 F.3d 763, 766 (7th Cir. 1996), cert. denied, 518 U.S. 1020 (1996), while the doctrine of res judicata is an affirmative defense. Lambert v. Conrad, 536 F.2d 1183, 1186 (7th Cir. 1976) ("[I]t is . . . clear that res judicata may be raised by pre-answer motion or at least that it is within the district court's discretion to allow it to be so raised.") (citations omitted).
B.
The defendants have relied on the state court litigation to support their arguments under both Rooker-Feldman and res judicata. They have presented these arguments through their motion for judgment on the pleadings.
The plaintiffs are entirely correct that the parties are entitled to notice as to whether materials outside the pleadings will be considered and how that affects the defendants' motion for judgment on the pleadings. This implicates the standard which will be employed and enables the parties to sharpen their arguments on the precise defenses which are presented. For example, [b]ecause the Rooker-Feldman doctrine is jurisdictional in nature, its applicability must be determined before considering the defendants' arguments regarding the applicability of res judicata. See Garry v. Geils, 82 F.3d 1362, 1365 (7th Cir. 1996) ("Where Rooker-Feldman applies, lower federal courts have no power to address other affirmative defenses, including res judicata.").
Long v. Shorebank Development Corp., 182 F.3d 548, 554 (7th Cir. 1999). A Rooker-Feldman defense should be presented through a motion to dismiss pursuant to Rule 12(b)(1). Because the legal standards converge, however, Pinewood Estates of Michigan v. Barnegat Tp. Leveling Bd., 898 F.2d 347, 349 n. 4 (3d Cir. 1990) (describing the standard for reviewing motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) as being the same as standard for a motion to dismiss under Rule 12(b)(6) and citing the "no set of facts" standard under Conley v. Gibson, 355 U.S. 41, 45-46 (1957)), no remaking of the motion for judgment on the pleadings need be undertaken.
The immediate question, however, is the effect of exhibits 1, 2, and 3 to the motion for judgment on the pleadings on the treatment of that motion. These exhibits relate to the state court litigation. The predicate to every challenge to subsequent litigation is the production of sufficient records of the prior litigation to permit an informed comparison of the litigation.
Insofar as the defendants argue that the plaintiffs' amended complaint is barred (in its entirety) by Rooker-Feldman, the motion for judgment on the pleadings should be a Rule 12(b)(1) motion and will be treated as such. In addressing a motion to dismiss for lack of subject matter jurisdiction, a district court has the authority to consider matters outside the pleadings to determine whether subject matter jurisdiction in fact exists. Schaefer v. Transportation Media, Inc., 859 F.2d 1251, 1253 (7th Cir. 1988); Gervasio v. U.S., 627 F. Supp. 428, 430 (N.D.Ill. 1986). Consideration of materials outside the pleadings when ruling on such a motion does not require that the court treat the motion as one for summary judgment because the Federal Rules of Civil Procedure do not direct it. In Crawford v. United States, 796 F.2d 924, 928 (7th Cir. 1986), it was pointed out that "[t]he omission . . . of a provision for converting a Rule 12(b)(1) motion into a summary judgment motion . . . was not an oversight." Instead, the district court is entitled to receive appropriate evidentiary submissions — "any rational mode of inquiry will do." Id. at 929.
Similarly, facts subject to determination by judicial notice may be considered when a court must resolve a motion pursuant to either Rule 12(b)(6) or 12(c). Mandarino v. Pollard, 718 F.2d 845, 849 (7th Cir. 1983), cert. denied, 469 U.S. 830 (1984). The fact that the state litigation occurred and involved certain claims and produced certain outcomes is documented through exhibits 1, 2, and 3 to the motion for judgment on the pleadings. These are well within the scope of materials and "facts" which can be judicially noticed. General Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1081 (7th Cir. 1997) ("A court may take judicial notice of an adjudicative fact that is both not subject to reasonable dispute and either 1) generally known within the territorial jurisdiction of the trial court or 2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.") (internal citation omitted); Opoka v. INS, 94 F.3d 392, 394 (7th Cir. 1996); Henson v. CSC Credit Servs., 29 F.3d 280, 284 (7th Cir. 1994) (confirming that court documents from state proceeding are noticeable); Philips Medical Sys. Int'l v. Bruetman, 982 F.2d 211, 215 n. 2 (7th Cir. 1992) (determinations to be judicially noticed include "`proceeding[s] in other courts, both within and outside of the federal judicial system, if the proceedings have a direct relation to matters at issue.'") (quoting United States v. Hope, 906 F.2d 254, 260 n. 1 (7th Cir. 1990), cert. denied, 499 U.S. 983 (1991)); Marcus v. AT T Corp., 938 F. Supp. 1158, 1164-65 (S.D.N Y 1996) (court may take judicial notice of public documents even if not included in or attached to the complaint).
C.
The motion to convert or exclude is inapt as to the Rule 12(b)(1) argument that the plaintiffs' claims are barred by Rooker-Feldman. As to what amounts to the motion to dismiss based on res judicata, neither conversion of that motion to a motion for summary judgment nor the exclusion of exhibits 1, 2, and 3 of the motion for judgment on the pleadings is warranted. The plaintiffs' motion to convert or exclude extends to exhibit 4 of the motion for judgment on the pleadings, but exhibit 4 is a copy of a complaint filed by the plaintiffs on May 24, 2000, in the Marion Superior Court, and that lawsuit is not described as having been terminated, which is a sine qua non to consideration under either Rooker-Feldman or res judicata.
Accordingly, the plaintiffs' motion to convert or exclude is in all respects denied.
II.
The defendants' motion for judgment on the pleadings rests on their argument that this lawsuit is successive to the state litigation in a manner which is not permitted. The Supreme Court has recognized that "a fundamental precept of common-law adjudication is that an issue once determined by a competent court is conclusive." Arizona v. California, 460 U.S. 605, 619 (1983). Relitigation of claims is a burden to litigants and courts alike.
The court has not attempted through the present Entry to analyze the defendants' Rooker-Feldman or res judicata arguments, but merely to bring clarity to the procedural stance of those arguments. Contrary to the plaintiffs' arguments, the denial of their motion to convert or exclude does not prevent them from opposing the motion for judgment on the pleadings in a meaningful fashion, nor without the benefit of any facts they can muster which bear on the defendants' arguments. The plaintiffs shall have through August 18, 2000, in which to further respond to the defendants' Rooker-Feldman and res judicata arguments, and the defendants shall have through September 12, 2000, in which to further reply. The development of the defendants' arguments regarding the sufficiency of the amended complaint from a pleading standpoint, these arguments being asserted in Parts II, III, and IV of their Brief filed on June 5, 2000, is suspended until further order. After a ruling is made on the Rooker-Feldman and/or res judicata arguments by the defendants, the court will direct any further development of the motion for judgment on the pleadings which is warranted.