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Graff v. Aberdeen Enterprizes, II, Inc.

No. 21-5031. 4/10/2023. N.D.Okla. Judge Murphy. Subject Matter Jurisdiction—Rooker-Feldman Doctrine—Heck Doctrine—Younger Abstention—42 USC § 1983—Racketeer Influenced and Corrupt Organizations Act (RICO), 18 USC §§ 1961 to 1968—Oklahoma State Court Proceedings.

April 10, 2023

Plaintiffs are impoverished individuals who were convicted of criminal or traffic offenses and assessed fines and fees as part of their sentences. At sentencing, or after release from incarceration after a prison sentence, plaintiffs were instructed to make payments or set up payment plans with Aberdeen Enterprizes, II, Inc., a debt collection company. Plaintiffs brought suit under 42 USC § 1983, Oklahoma state law, and RICO, alleging that Aberdeen and its principal officers (collectively, Aberdeen) participated in an illegal debt collection scheme with two other groups of defendants: (1) individual Oklahoma sheriffs, the Oklahoma Sheriff’s Association, and officials of Tulsa and Rodgers counties, and (2) state court judges. Plaintiffs’ complaint asserts that through the debt collection scheme, indigent Oklahomans were coerced into paying court debts through actual or threatened incarceration without notice or hearing or any inquiry into their ability to pay. The district court dismissed the case for lack of subject matter jurisdiction, holding that three independent doctrines prevented plaintiffs from proceeding.

On appeal, plaintiffs argued that the district court erred in applying Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) (the Rooker-Feldman doctrine) to dismiss their complaint. Rooker-Feldman prevents federal courts (except the US Supreme Court) from exercising jurisdiction over cases brought by state-court losers seeking district court review and rejection of prior state-court judgments. Rooker-Feldman’s jurisdictional limitation is narrow, applying where a litigant specifically seeks to modify or set aside a state court judgment and an element of the claim is that the state court wrongfully entered its judgment. Here, plaintiffs’ complaint does not challenge their underlying state-court judgments or the amount of court debt imposed at sentencing. Instead, plaintiffs allege that defendants—including Aberdeen, a group of private actors whose unconstitutional conduct is independent of the underlying state-court judgments—have engaged in unconstitutional practices in the collection of court debts, often long after judgments against plaintiffs were entered. Nevertheless, without referencing the specific causes of action set out in the complaint, the district court concluded that the entire complaint fell within the Rooker-Feldman doctrine. Further, the district court erred in relying on other avenues of recourse available to plaintiffs under state law, including Oklahoma Court of Criminal Appeals Rule 8, as a basis to apply Rooker-Feldman because the doctrine imposes no duty to exhaust judicial and administrative remedies before pursuing a federal civil rights suit. Because plaintiffs’ claims do not seek relief for harms caused by the entry of judgments of conviction or assert that the judgments of conviction were wrongly entered, the district court erred in concluding Rooker-Feldman deprived it of jurisdiction to hear the claims.

Plaintiffs also argued that the district court erred in applying Heck v. Humphrey, 512 U.S. 477 (1994), to dismiss their complaint. Heck’s purpose is to prevent litigants from using a § 1983 action to challenge their conviction or sentence without complying with the more stringent exhaustion requirements for habeas actions. The Heck doctrine only applies when, in a § 1983 case, the district court determines that a judgment in favor of the plaintiff would necessarily imply the invalidity of their conviction or sentence, in which case such claim must be dismissed unless the plaintiff can show that the conviction or sentence has already been invalidated. Here, the causes of action in plaintiffs’ complaint and the prayer for relief do not threaten to imply the invalidity of plaintiffs’ underlying convictions or the sentences imposed. Accordingly, the district court erred in concluding that any one of plaintiffs’ claims are subject to the Heck bar.

Lastly, plaintiffs contended that the district court erred in applying Younger v. Harris, 401 U.S. 37 (1971), to dismiss their complaint. Under Younger, a federal court must abstain from deciding a case that is otherwise within the scope of its jurisdiction where it would unduly interfere with state court proceedings. Invoking Younger is only appropriate when the court’s failure to abstain from exercising jurisdiction would disturb an ongoing state proceeding. Younger abstention is required when three conditions are satisfied, one of which is that the relevant state court proceeding must be “ongoing.” The Tenth Circuit concluded that Younger does not apply because the overall process of collecting court debts, from entry of the criminal judgment to payment of the last dollar owed, does not amount to a single ongoing state proceeding for purposes of Younger. Accordingly, the district court erroneously concluded that criminal proceedings remained ongoing in Oklahoma state court until plaintiffs paid their court debts in full and that Younger therefore applied.

The order was reversed and the matter was remanded for further proceedings.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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