Williams et al v. Rent-A-Center, Inc.

Filing 37

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Plaintiffs' Motion To Remand [ 7 ] is GRANTED and this matter is REMANDED to the Circuit Court of the City of St. Louis under 28 U.S.C. § 1447(c). IT IS FURTHER ORDERED that Defendant Rent- A-Center, Inc.'s Motion for Leave to File Short Surreply in Further Opposition to Plaintiff's Motion to Remand 31 is DENIED. IT IS FINALLY ORDERED that Defendant Rent-A-Center, Inc.'s Motion to Compel Individual Arbitration and Stay Litigation 15 is DENIED without prejudice to refiling in state court. Signed by District Judge John A. Ross on 5/15/18. (JAB)(Copy of Memorandum and Order and docket sheet mailed to St. Louis City Circuit Clerk)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

SADE BEATON, individually and on
behalf of all others similarly situated,
Plaintiffs,

v.
RENT-A-CENTER, INC.,
Defendant.

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No. 4:18-CV-00026 JAR

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiffs' Motion To Remand (Doc. No. 7) and
Defendant Rent-A-Center, Inc.'s Motion to Compel Individual Arbitration and Stay Litigation
(Doc. No. 15). The motions are fully briefed and ready for disposition. 1

Background
On December 6, 2017, Plaintiff Myra Williams ("Williams") filed a Class Action Petition
styled Myra Williams v. Rent-A-Center, Inc., Case No. 1722-CC11893, in the Circuit Court of
the City of St. Louis, against Defendant Rent-A-Center ("RAC"). The petition was later amended
to add Sade Beaton ("Beaton") as a named Plaintiff in the case.2 (First Amended Class Action
Petition ("AC"), Doc. No. 4) RAC is in the business of leasing household goods such as furniture
and appliances; Plaintiff and the putative class members are current or former customers of
RAC. According to Plaintiffs, RAC regularly uses court process to collect on lease agreements it

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RAC has requested leave to file a surreply in further opposition to Plaintiff's motion to remand (Doc.
No. 31), which Plaintiff opposes (Doc. No. 32). Upon consideration of the parties' arguments, the Court
will deny RAC's request because the Court finds a surreply is not necessary for resolution of the pending
motion.
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Williams voluntarily dismissed her claims against RAC on February 9, 2018. (Doc. Nos. 28, 30)

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asserts are in default. (AC

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7) In Count I of the amended petition, Plaintiffs allege that RAC

violated the Missouri Merchandising Practices Act ("MMP A") by taking default judgments
against them in state court without having obtained personal jurisdiction. Specifically, Plaintiffs
allege the default judgments were based on returns of service signed by special process servers
who were not appointed by the Court to serve process in accordance with Missouri law.

(AC~~

8-15, 21-23) In Count II of the amended petition, Plaintiffs allege that RAC was unjustly
enriched at the expense of Plaintiffs and the putative class members by the default judgments and
monies collected after those judgments were entered. (AC ~~ 56-60) Plaintiffs seek damages and
an order declaring RAC's prior judgments against them void as a matter of law and directing
RAC to set the judgments aside.
RAC removed the case

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this Court on January 5, 2018 based on diversity jurisdiction

pursuant to 28 U.S.C., §§ 1332, 1441, 1446 and 1453, and the Class Action Fairness Act
("CAFA"), 28 U.S.C. § 1332(d). (Doc. No. 1) Plaintiffs seek remand on the grounds that the
Court lacks jurisdiction over their claims pursuant to the Rooker-Feldman doctrine. RAC
opposes remand and moves to compel individual arbitration and stay litigation or, in the
alternative, to dismiss the case without prejudice, pending the individual arbitrations.
Discussion

Rooker-Feldman is a jurisdictional doctrine that applies ohly to cases brought by "statecourt losers complaining of injuries caused by state-court judgments rendered before the district
court proceedings commenced and inviting district court review and rejection of those
judgments." Heroux v. Callidus Portfolio Mgmt. Inc. & Messerli & Kramer, P.A., No. CV 175132(DSD/HB), 2018 WL 2018069, at *2 (D. Minn. May 1, 2018) (quoting Exxon Mobile Com.
v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005)); see also Skit Int'l, Ltd. v. DAC Techs.

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Of Ark., Inc., 487 F.3d 1154, 1157 (8th Cir. 2007). Under the doctrine, federal district courts are
without jurisdiction to review state-court judgments or to address federal claims with allegations
that are inextricably intertwined with a state-court decision. Id. (citing Prince v. Ark. Bd. of
Exam'rs in Psychology, 380 F.3d 337, 340 (8th Cir. 2004)). A claim is inextricably intertwined if
"the relief requested ... would effectively reverse the state court decision or void its ruling."
Fielder v. Credit Acceptance Coro., 188 F.3d 1031, 1035 (8th Cir. 1999) (citation omitted). The
fact that a judgment was entered on a party's default does not alter the doctrine's applicability.

Id
Although Rooker-Feldman originally limited federal-question jurisdiction, the Supreme
Court has recognized the applicability of the doctrine to cases brought under diversity
jurisdiction. See Exxon, 544 U.S. at 291-92. Diversity proceedings removed to federal court
under CAFA are also within the doctrine's purview. Pounds v. Portfolio Recovery Assocs., LLC,
No. 1:16CV1395, 2018 WL 1583670, at *2-3 (M.D.N.C. Mar. 28, 2018) (citing Dell Webb
Cmtys., Inc. v. Carlson, 817 F.3d 867, 872 (4th Cir.), cert. denied, -U.S.-, 137 S. Ct. 567, 196 L.
Ed. 2d 444 (2016); Bergguist v. Mann Bracken, LLP, 592 F.3d 816, 818 (7th Cir. 2010); Murray
v. Midland Funding, LLC, Civil No. JKB-15-0532, 2015 WL 3874635, at *l, *3--4 (D. Md. June
23, 2015)).
The presence or absence of subject matter jurisdiction under Rooker-Feldman is a
threshold issue the Court must determine before considering the merits of the case. See
Friedman's, Inc. v. Dunlap, 290 F.3d 191, 196 (4th Cir. 2002) ("Because the Rooker-Feldman
doctrine is jurisdictional, we are obliged to address it before proceeding further in our
analysis."); see also Stanton v. District of Columbia Court of Appeals, 127 F.3d 72, 75 (D.C.
1997) ("Because it is jurisdictional, we first consider the Rooker-Feldman do,ctrine . . ."

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(emphasis added)); Neal v. Wilson. 112 F.3d 351, 356 (8th Cir. 1997) (explaining that ''to the
extent that any portion of [the] complaint survived the jurisdictional bar of the Rooker-Feldman
doctrine, the district court correctly ruled that Younger abstention was warranted").
RAC urges the Court to bypass Rooker-Feldman jurisdictional issues and grant its
pending motion to stay and compel arbitration because arbitration is a procedural rather than a
merits-based issue, citing Sinochem Intern. Co. Ltd. v. Malaysia Intern. Shipping Coro., 549
U.S. 422 (2007) and its progeny. (Doc. No. 24 at 7-9) In Sinochem, the Supreme Court held that
a district court acted within its discretion to first decide a forum non conveniens motion before
determining whether it had personal jurisdiction over the defendant, because "[r]esolving a
forum non conveniens motion does not entail any assumption by the court of substantive 'lawdeclaring power."' Id. at 433. Sinochem did not, however, specifically address the applicability
of Rooker-Feldman and is thus distinguishable from the instant case.
Further, when the question of jurisdiction "will involve no arduous inquiry," the Court
should address jurisdiction first. Id. (quoting Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574,
587-88 (1999)). Because Plaintiff's amended petition is "a classic illustration of the cases
covered by the Rooker-Feldman doctrine," Skit, 487 F.3d at 1157, jurisdiction will not involve
an "arduous inquiry." The Court will, therefore, determine the threshold question of jurisdiction
by addressing Plaintiff's motion to remand.
Motion to remand

Federal courts are courts of limited jurisdiction. Ark. Blue Cross & Blue Shield v. Little
Rock Cardiology Clinic, P.A., 551 F.3d 812, 816 (8th Cir. 2009). A federal district court may
exercise removal jurisdiction only where the court would have had original subject-matter
jurisdiction had the action initially been filed there. Krispin v. May Dep't Stores Co., 218 F.3d

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919, 922 (8th Cir. 2000) (citing 28 U.S.C. § 1441(b)). A party seeking removal and opposing
remand carries the burden of establishing federal subject-matter jurisdiction by a preponderance
of the evidence. In re Prempro Prods. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010). Generally,
a court must resolve all doubts about federal jurisdiction in favor of remanding the case to state
court. In re Prempro, 591 F.3d at 620.
In support of their motion to remand this case to state court, Plaintiffs argue the Court
lacks subject matter jurisdiction under the Rooker-Feldman 3 doctrine because they are
challenging the validity of default judgments entered against them by a Missouri state court.
(Doc. No. 8 at 3-5) RAC responds that Rooker-Feldman does not apply to cases that raise
independent claims of misconduct, separate and apart from any state court judgment, citing
Riehm v. Engelking, 538 F.3d 952, 965 (8th Cir. 2008) and MSK EyEs Ltd. v. Wells Fargo
Bank, Nat'l. Ass'n, 546 F.3d 533, 539 (8th Cir. 2008). (Doc. No. 24 at 10-12) RAC argues that
Plaintiffs' claims are premised on RAC's alleged misconduct in requesting and receiving
approval for one special process server while using another, which is separate and apart from a
challenge to the eventual alleged error in any state court judgment. (Id. at 11)
The Eighth Circuit and courts in this district have distinguished between claims attacking
a state court decision and claims attacking an adverse party's actions in obtaining and enforcing
that decision, holding that Rooker-Feldman bars only the former. For example, in Skit, 487 F.3d
1154, plaintiff sought to have a state court judgment against it set aside for lack of service and
lack of personal jurisdiction. Because "the alleged injury for which Skit seeks redress ... stems
directly from the state court judgment itself rather than from some separate injury caused by the
defendant, the court found Skit's complaint to be "a classic illustration of the cases covered by

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See Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923); District of Columbia Court of Appeals v.
Feldman, 460 U.S. 462 (1983).

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the Rooker-Feldman doctrine," and affirmed the district court's dismissal of the action for lack
of jurisdiction under Rooker-Feldman. Id. at 1157. By way of comparison, in MSK. 546 F.3d at
539, the court concluded that Rooker-Feldman did not bar plaintiffs claims against Wells Fargo
arising from an alleged breach of a mutual release agreement settling state litigation. To the
extent the claims were premised on Wells Fargo's activities in filing the state action and
enforcing the resulting judgment, plaintiff did not seek ''review and rejection" of the judgment.
Likewise, in Mueller v. Barton, No. 4:13-CV-2523 CAS, 2014 WL 4546061 (E.D. Mo. Sept. 12,
2014), the court denied Barton's motion to dismiss for lack of subject matter jurisdiction, holding
that Rooker-Feldman did not bar plaintiffs claims premised on Barton's alleged improper
activities in filing the state court suit and in collecting under the consent judgment. Although she
complained of injuries caused by the state court suit and judgment, she did not seek "review and
rejection" of that judgment. Id. at *3. See also Fed. Nat'l Mortgage Ass'n v. Underwood, No.
4:17-CV-2370, 2017 WL 5197141, at *2 (E.D. Mo. Nov. 8, 2017) (doctrine applied where
plaintiff requested court set aside unlawful detainer judgment and restore his possession of his
property); Campbell v. Sansone Law, LLC, No. 4:16-CV-00175, 2016 WL 4089349, at *2-3
(E.D. Mo. Aug. 2, 2016) (doctrine applied where court would have to invalidate a portion of the
state court judgment for plaintiff to prevail); Torrey v. JP Morgan Chase Bank, N.A., No. 4:14CV-1676, 2015 WL 1955023, at *3-4 (E.D. Mo. Apr. 29, 2015) (doctrine applied where
plaintiffs complaint asked the court to review state court's decision); Garner v. Barton, No.
4:14-CV-200, 2015 WL 1120085, at *4 (E.D. Mo. Mar. 12, 2015) (doctrine applied where
plaintiff challenged the amounts awarded in a state court judgment); Ventimiglia v. St. Louis
C.O.G., Inc., 2009 WL 35186, at *4 (E.D. Mo. Jan. 5, 2009) (doctrine applied where defendant's
actions in state court case formed the basis for plaintiffs case).

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Here, Plaintiff was the losing party in state court proceedings that resulted in final
judgment in favor of RAC. This judgment was entered before the current federal proceeding was
commenced by way of removal. Plaintiff challenges the validity of the state court judgments
based on defective service and requests this Court declare the judgments void and direct that they
be set aside. Granting Plaintiff the relief she seeks would require this Court to effectively reverse
the state court decision or void its ruling, exactly what the Rooker-Feldman doctrine prohibits.
The Court therefore determines that the Rooker-Feldman doctrine divests this Court of subject
matter jurisdiction over this action, and that this provides a basis for remand, as well.
Conclusion
Plaintiff asks that the Court review and reject a state court judgment. Such a request is
clearly outside the jurisdiction of this Court and must be remanded. Because the Court lacks
subject matter jurisdiction over this action, RAC's pending motion to stay and compel arbitration
will be denied without prejudice as moot.
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs' Motion To Remand [7] is GRANTED and
this matter is REMANDED to the Circuit Court of the City of St. Louis under 28 U.S.C. §
1447(c).
IT IS FURTHER ORDERED that Defendant Rent-A-Center, Inc.'s Motion for Leave
to File Short Surreply in Further Opposition to Plaintiff's Motion to Remand [31] is DENIED.
IT IS FINALLY ORDERED that Defendant Rent-A-Center, Inc.'s Motion to Compel
Individual Arbitration and Stay Litigation [15] is DENIED without prejudice to refiling in state
court.

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