Tenth Circuit Summaries

• Publication year: 2004
• Pages: 187

33 Colo.Law. 11 Colorado Lawyer 2004.

2004, August, Pg. 187. Tenth Circuit Summaries

Vol. 33, No. 8, Pg. 11

The Colorado Lawyer
August 2004
Vol. 33, No. 8 [Page 187]

From the Courts
U.S. Court of Appeals for the Tenth Circuit
Tenth Circuit Summaries

Summaries of selected opinions appear on a space-available basis. The summaries are prepared for the Colorado Bar Association by Jenine Jensen and Catherine Campbell, licensed Colorado attorneys. The summaries of the U.S. Court of Appeals for the Tenth Circuit are provided as a service by the Colorado Bar Association and are not the official language of the Court. The Colorado Bar Association cannot guarantee the accuracy or completeness of the summaries

Full copies of the Tenth Circuit decisions are available on the CBA website at http: //www.cobar.org/hotlinks.cfm (United States Courts link to the Tenth Circuit). Call The Colorado Lawyer Editorial Offices with questions: (303) 860-1118

Rooker-Feldman Doctrine - Federal Jurisdiction - Dismissal Without Prejudice - Merits Actually Decided - Inextricably Intertwined

Merrill Lynch Business Financial Services, Inc. v. Nudell No. 03-1163, 4/12/04, D.Colo., Chief Judge Tacha.

Plaintiff sued defendant in a Colorado state court to collect on a loan he guaranteed for his company. Unbeknownst to plaintiff, defendant's company had filed for bankruptcy the day before the collection action was filed. The Colorado state court dismissed the collection suit without prejudice. After the bankruptcy case was closed, plaintiff sued defendant again, this time in federal district court. The defendant moved to dismiss the federal case, invoking the "Rooker-Feldman doctrine," and the district court granted the motion. [See Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 283 (1983).]

The Rooker-Feldman doctrine establishes, as a matter of subject-matter jurisdiction, that only the U.S. Supreme Court has appellate authority to review a state-court decision. [See 28 U.S.C. § 1257(a).] The defendant argued that the state court's dismissal of the first collection action without prejudice barred the federal court from taking subject-matter jurisdiction. The Tenth Circuit Court disagrees, holding that the doctrine did not apply here because the state court's order did not actually decide the merits of plaintiff's federal claims, and the federal claims were not inextricably intertwined with the state court's judgment. Rejecting defendant's suggestion that the state court could have ruled on the merits, the Tenth Circuit Court applies Colorado law, holding that a dismissal without prejudice means not on the merits. Accordingly, the Rooker-Feldman doctrine did not divest the federal court of jurisdiction. The district court's judgment is reversed and remanded.

Meaning of Dismissal "With Prejudice" - Re-file Claims in Another Court

Styskal v. Weld County Board of County Comm'rs, No. 03-1179, 4/13/04, D.Colo., Judge Hartz.

Plaintiff sued both governmental entities and private individuals over difficulties surrounding property she purchased in Weld County, Colorado. Her federal claims against the governmental defendants were dismissed; she does not appeal that ruling. In dismissing her federal claims, however, the district court also dismissed her state-law claims against the individual defendants, finding that it lacked supplemental jurisdiction over those claims. The district court dismissed all claims with prejudice.

Plaintiff appealed, contending that she should be permitted to re-file her state-law claims against the individual defendants in a state court. The Tenth Circuit Court explains that the meaning of a dismissal "with prejudice" has changed over the years. Relying on a recent Supreme Court opinion, the Tenth Circuit Court holds that the primary meaning of "dismissal with prejudice" is that plaintiff is barred from again bringing the same claims in the same court. Whether those claims can be re-filed in a different court depends on whether the claims were dismissed on the merits or on procedural grounds. Because the district court's judgment did not necessarily preclude plaintiff from refiling her state-law claims in a state court, the district court's judgment is affirmed.

Civil or Criminal Contempt - Costs and Fees for Appeal

Lucre Management Group, LLC, v. Schempp Real Estate, LLC (In re Lucre Mgmt. Group, LLC), No. 03-1086, 4/20/04, D.Colo., Judge McKay.

Lucre Management Group, LLC ("Lucre") violated the bankruptcy court's order limiting how certain funds could be used. Consequently, the bankruptcy court found that Lucre was in contempt, and ordered it to reimburse the funds to the bankruptcy trustee or pay $1,000 as a sanction. Lucre appealed to the district court, who characterized the contempt as "criminal" for the first time, and affirmed the order. Lucre then appealed that judgment, seeking reversal of the contempt and challenging the characterization of it as "criminal."

The Tenth Circuit Court upholds the contempt order, because it was clear that Lucre had notice of what the bankruptcy order required, and that it violated the order. The contempt order was not, however, "criminal" in nature; rather it was "civil." A civil contempt is remedial and for the benefit of the complainant. In contrast, a criminal contempt is punitive, to vindicate the authority of the court. Here, the contempt order required Lucre to reimburse the funds and, if it did, it could avoid the $1,000 sanction. Therefore, it was a civil contempt.

The Tenth Circuit Court addresses appellee Schempp Real Estate's request for fees and costs incurred in the appeal to the district court, as well as to the appellate court. The request was granted as to the initial appeal, because the appeal was utterly without merit, but denied as to the instant appeal, because Lucre raised a substantial question about the proper characterization of the contempt. The district court's judgment is affirmed in part and reversed in part.

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