By: WISCONSIN LAW JOURNAL STAFF//May 20, 2014//
U.S. Court of Appeals for the 7th Circuit
Civil
Civil Procedure — Rooker-Feldman doctrine
Where an interpleader action does not seek to upset a state court judgment, the Rooker-Feldman doctrine does not require that it be dismissed.
“Arnold’s goal in this litigation is to obtain a declaratory judgment that he is not liable to whichever claimant loses in the interpleader dispute. This potentially sweeps more broadly than a request to decide only which party is entitled to the stock. We already have explained why, if the district court on remand determines that KJD has the superior claim to the stock, it can order Arnold to transfer the stock to KJD. Such a ruling would not disturb the state court’s judgment, nor would it fail to give that judgment full faith and credit, because the question of liability implicates more than the disposition of the shares. The state court’s judgment might entitle the Corporate Defendants to some other remedy against Arnold. If the interpleader court concludes that the Corporate Defendants have the superior claim to the stock, then it could either stop there or proceed to decide the related question whether Arnold remains liable to KJD in some way. It would be premature for us to rule on those questions at this stage, since anything we might say would be based on speculation about the outcome of the interpleader dispute. In addition, as we now point out, the interpleader court might wish to abstain on some or all of these issues.”
Vacated and Remanded.
12-1715 & 12-1894 Arnold v. KJD Real Estate, LLC
Appeals from the United States District Court for the Southern District of Illinois, Murphy, J., Wood, J.