Malhan v. Sec'y U.S. Dep't of State

938 F.3d 453

Surender MALHAN, for himself and as parent of E.M. and V.M., Appellant

v.SECRETARY UNITED STATES DEPARTMENT OF STATE; Attorney General New Jersey; State of New Jersey; Elizabeth Connolly, in her official capacity as acting Commissioner of Office of Child Support Services ; Natasha Johnson, in her official capacity as Director Division of Family Development; John Does 1-10; Office of Child Support Services

No. 18-3373

United States Court of Appeals, Third Circuit.

Argued on April 3, 2019

Filed September 18, 2019

Paul A. Clark [Argued], Suite 1N, 10 Huron Avenue, Jersey City, NJ 07306, Attorney for Appellant

Melissa H. Raksa, Ragner E. Jaeger [Argued], Office of Attorney General of New Jersey, Department of Health & Human Services, 25 Market Street, Richard J. Hughes Justice Complex, Trenton, NJ 08625, Attorneys for Appellees

Before: CHAGARES and HARDIMAN, Circuit Judges, and GOLDBERG,^* District Judge.

OPINION OF THE COURT

HARDIMAN, Circuit Judge.

This case arises out of a family law dispute that began in 2011 and remains pending in Hudson County, New Jersey. Over the past eight years, the family court has required Appellant Surender Malhan to pay some $300,000 in child and spousal support to his putative ex-wife, Alina Myronova. The crux of Malhan’s complaint is that New Jersey officials violated his federal rights when they failed to reduce his support obligations after he was awarded custody of their two children and Myronova obtained a job that pays more than his own. The District Court dismissed Malhan’s second amended complaint, holding that it lacked jurisdiction under the Rooker -Feldman doctrine. And to the extent it had jurisdiction, the District Court declined to exercise it under Younger v. Harris , 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). In our view, Malhan is entitled to federal court review of some of his claims. So we will affirm in part, reverse in part, and remand for further proceedings.

I

In February 2011, Myronova sued Malhan for divorce in Hudson County, New Jersey.¹ The family court awarded Myronova full custody of the couple’s two minor children and ordered Malhan to pay $6,000 per month for child and spousal support. Malhan also had to give Myronova rental income from their jointly owned properties, which the court earmarked for mortgage payments.

After suffering these setbacks, Malhan received some favorable rulings from the family court. In 2012, he was awarded joint custody of the children, which increased their proportion of overnight stays with Malhan from zero to more than half. The year after, the court found Myronova owed Malhan about $44,000, half of which was rental income Myronova had embezzled for personal use rather than pay the mortgage. The other half was spousal support the court ordered her to return because she had been living with her boyfriend.

Soon after he obtained these favorable rulings, Malhan sought a reduction in his child support obligations. But the court decided to postpone any reduction until a final judgment of divorce, which still has not issued. And in the years since, the gap between what Malhan must pay and what he should pay has only widened. See N.J. Rule of Court 5:6A, Appendix IX-A, Considerations in the Use of Child Support Guidelines 2 (2018); App. 28–30. By 2016, Myronova’s annual income had increased from zero to more than $100,000—well over Malhan’s income of about $60,000.

Despite this reversal in their economic fortunes, Malhan still must pay Myronova $3,000 per month in child support—an amount the court refuses to recalculate even after acknowledging it is unusual "for a parent who is not the parent of primary residence" to receive child support. App. 56 ¶ 179. Relying on that comment, Malhan briefly stopped paying child support. Because the comment was not an order lifting his obligations, however, Malhan fell into arrears, and the court ordered his wages garnished.

Unable to find relief in family court, Malhan filed a six-count complaint in federal court. The three counts most relevant to this appeal seek declaratory or injunctive relief against New Jersey officials for violating federal law:

• Count 2 challenges the disclosure of Malhan’s bank records and the administrative levy of his bank account. It alleges violations of 42 U.S.C. § 669a, a provision of the Child Support Enforcement Amendments of 1984 (CSEA) to Title IV-D of the Social Security Act. See Pub. L. No. 98-378, 98 Stat. 1305 ; App. 42–49.

• Count 5 claims Defendants are violating Malhan’s right to due process of law by refusing to permit counterclaims and offsets to his child and spousal support debt. See App. 54–55.

• Count 6 alleges that the garnishment of Malhan’s wages violates the CSEA and § 303 of the Consumer Credit Protection Act, 15 U.S.C. § 1673. See App. 55–64. The family court’s garnishment order was in place until March 2018. The court then vacated its order in response to the U.S. Department of Labor, which said the garnishment violated § 1673(c). See App. 75–76.²

The District Court dismissed Counts 2, 5, and 6 on two independent grounds. First, the Court held it lacked subject matter jurisdiction under the Rooker -Feldman doctrine, which bars district court review of state court judgments. See Malhan v. Tillerson , 2018 WL 2427121, at *6–8 (D.N.J. May 30, 2018). It reasoned "(1) the Family Court has made a determination as to Plaintiff’s parenting situation, as well as Plaintiff’s child support obligations; (2) Plaintiff is complaining of these findings; (3) the Family Court made its findings before Plaintiff filed this matter; and (4) Plaintiff is asking this Court to overturn the Family Court’s findings." Id. at *6 (applying Great W. Mining & Mineral Co. v. Fox Rothschild LLP , 615 F.3d 159, 166 (3d Cir. 2010) ). Second, the Court invoked Younger abstention to decline jurisdiction. See id. at *6–8. It did so because Malhan’s suit implicated "important state interests" and the New Jersey family court offered an "adequate opportunity to raise federal claims." Id. at *7. Malhan filed this timely appeal.³

II

A

We first address the District Court’s holding that it lacked jurisdiction under Rooker-Feldman . That doctrine conflicts with the familiar maxim that federal courts have a "virtually unflagging" duty to exercise jurisdiction conferred by Congress. Colorado River Water Conservation Dist. v. United States , 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). At the same time, federal district courts are not amenable to appeals from disappointed state court litigants. A litigant seeking to appeal a state court judgment must seek review in the United States Supreme Court under 28 U.S.C. § 1257. Id. As the Court has explained:

Rooker and Feldman exhibit the limited circumstances in which [the] Court’s appellate jurisdiction over state-court judgments, 28 U.S.C. § 1257, precludes a United States district court from exercising subject-matter jurisdiction in an action it would otherwise be empowered to adjudicate under a congressional grant of authority, e.g. , § 1330 (suits against foreign states), § 1331 (federal question), and § 1332 (diversity).

Exxon Mobil Corp. v. Saudi Basic Indus. Corp. , 544 U.S. 280, 291, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005) (emphasis added).

Although those "limited circumstances" arose only twice in the Supreme Court—in Rooker and Feldman themselves—lower courts applied the doctrine liberally for some time. See, e.g. , id. at 283, 125 S.Ct. 1517 ; Thomas D. Rowe Jr. & Edward L. Baskauskas, " Inextricably Intertwined" Explicable at Last? Rooker-Feldman Analysis after the Supreme Court’s Exxon Mobil Decision , 1 Fed. Cts. L. Rev. 367, 370–71 (2006). That changed in 2005 when the Court decided Exxon . There, the Court reversed our expansive interpretation of Rooker -Feldman and "confined" the doctrine "to cases of the kind from which [it] acquired its name: [1] cases brought by state-court losers [2] complaining of injuries caused by state-court judgments [3] rendered before the district court proceedings commenced and [4] inviting district court review and rejection of those judgments." 544 U.S. at 284, 125 S.Ct. 1517 ; accord, e.g. , Geness v. Cox , 902 F.3d 344, 360 (3d Cir. 2018).

Given these elements, the problem with the District Court’s application of Rooker-Feldman is readily apparent: Malhan does not "complain[ ] of injuries caused by [a] state-court judgment ." Exxon , 544 U.S. at 284, 125 S.Ct. 1517 (emphasis added). In fact, as the District Court implied in its order denying reconsideration, there is no judgment at all because Malhan is complaining of "findings" and "determinations" of the family court. App. 4. But does Rooker -Feldman apply to the family court’s interlocutory orders?

The answer is less than clear. Before Exxon , we thought Rooker -Feldman barred review of interlocutory state court orders that "resolved, at least for the moment, the dispute between the parties which forms the basis of the federal complaint." Port Auth. Police Benev. Ass’n, Inc. v. Port Auth. of N.Y. & N.J. Police Dep’t , 973 F.2d 169, 178 (3d Cir. 1992). Since Exxon , we have not addressed whether Port Authority remains good law. See, e.g. , Argen v. Kessler , 2018 WL 4676046, at *6–7 & n.10 (D.N.J. Sept. 28, 2018). And the decisions of our panels and district courts have been inconsistent. Compare, e.g. , Shawe v. Pincus , 265 F. Supp. 3d 480, 489 (D. Del. 2017) (citing Port Authority and collecting four non-precedential opinions applying Rooker -Feldman to interlocutory orders after Exxon ), and Mayeres v. BAC Home Loans , 2011 WL 2945833, at *4 (Bankr. D.N.J. July 21, 2011) (citing Port Authority and stating "the suggestion that Rooker -Feldman does not apply to interlocutory orders is at odds with Third Circuit precedent"), and Raphael Graybill, Comment, The Rook That Would Be King , 32 Yale J. on Reg. 591, 596–600 (2015), with Argen , 2018 WL 4676046, at *7 (declining to apply the doctrine to interlocutory orders), a...