McCarthy v. Phillips Lytle, LLP et al

Filing 38

ORDER: Plaintiff Kevin McCarthy, Chapter 7 Trustee for Winchester Auto Retail, Inc., shall file a memorandum analyzing whether the Court has subject matter jurisdiction in light of all prior related state court proceedings on or before March 12, 2 014. Defendants Phillips Lytle LLP and Craig A. Leslie, Esq., shall respond to plaintiff's memorandum and shall include their legal analysis in support of their collateral-attack affirmative defense in a filing due on or before March 20, 2014. Signed by Hon. Richard J. Arcara on 2/11/2014. (Staff, Lisa)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

KEVIN R. McCARTHY, Chapter 7 Trustee
for Winchester Auto Retail, Inc.,
Plaintiff,

v.

ORDER
13-CV–1092-A

PHILLIPS LYTLE LLP, and
CRAIG A. LESLIE, Esq.,
Defendants.

During a special joint status conference to address threshold issues in this
case and two related cases on January 17, 2014, the parties agreed to address
potential application of the Rooker-Feldman1 doctrine in a filing due February 3,
2014. A minute entry confirmed the agreement. Dkt. No. 34. The parties have
not complied with their agreement to address potential Rooker-Feldman doctrine
questions, however.
A party seeking to invoke federal subject matter jurisdiction ordinarily has
the burden of establishing subject matter jurisdiction by a preponderance of the
evidence. Morrison v. National Australia Bank Ltd., 547 F.3d 167, 170 (2nd Cir.
2008). The Court raised questions concerning its subject matter jurisdiction
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The Rooker–Feldman doctrine provides that lower federal courts ordinarily lack
subject matter jurisdiction to review judgments of state courts. See D. C. Court of
Appeals v. Feldman, 460 U.S. 462, 482–83 (1983); Rooker v. Fidelity Trust Co., 263
U.S. 413, 414–16 (1923).

in light of potential Rooker-Feldman doctrine questions in each of the related
cases on its own during the January 17, 2014 joint status conference after none
of the parties raised the potential questions in required pre-conference
submissions because the Court has an obligation to “raise and decide
jurisdictional questions that the parties either overlook or elect not to press.”
Henderson ex rel. Henderson v. Shinseki, 131 S.Ct. 1197, 1202 (2011) (citing
Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006)); see Fed. R. Civ. P. 12(h)(3)
(the Court is to dismiss any action not within its subject matter jurisdiction). And
whether the Court has subject matter jurisdiction is a question ordinarily to be
resolved before the Court reaches the merits of a party’s claims. Robinson v.
The Government of Malaysia, 269 F.3d 133, 141 (2d Cir. 2001).
For these reasons, plaintiff Kevin R. McCarthy, Chapter 7 Trustee for
Winchester Auto Retail, Inc., is ordered to file a memorandum due March 12,
2014 analyzing whether this action is outside the Court’s subject matter
jurisdiction as a impermissible collateral attack on matters under prior-pending
state court appeal. See generally, Hoblock v. Albany County Bd. of Elections,
422 F.3d 77 (2nd Cir. 2005); Wolf v. Town of Southampton, 2013 WL 4679672
(E.D.N.Y. 2013). Failure to comply with this Order may result in dismissal of the
action, with prejudice. Plaintiff may refer to matters outside the pleadings. See
e.g., Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000).
Although no party addressed potential application of the Rooker-Feldman
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doctrine before the special status conference or in the agreed upon filings due
February 3, 2014, defendants Phillips Lytle LLP and Craig A. Leslie, Esq., allege
in an Answer filed January 31, 2014, Dkt. No. 35, an affirmative defense that the
“action is an impermissible collateral attack on proceedings that remain pending
in another court.” Id. at ¶ 65. In context, defendants Phillips Lytle’s and Leslie’s
collateral-attack defense seems to raise the question whether prior-pending state
appeal of issues involving claims and potential claims against defendants now
partially pending before this Court in Thomas J. Peroni, et al., v. Ford Motor
Credit Company LLC, 13-CV-1213, or related to issues under prior-pending state
appeal in Ford Motor Credit Company LLC, v. Winchester Auto Retail, Inc., now
before this Court at 13-CV-1214, are inextricably intertwined with the claims
asserted by plaintiff in this action and therefore outside federal courts’ subject
matter jurisdiction except on later appeal from the New York Court of Appeals to
the United States Supreme Court. See generally, Hoblock v. Albany County Bd.
of Elections, 422 F.3d 77 (2nd Cir. 2005); Wolf v. Town of Southampton, 2013
WL 4679672 (E.D.N.Y. 2013).
Defendants Phillips Lytle and Leslie do not cite the Rooker-Feldman
doctrine by name, or mention the Court’s subject-matter jurisdiction, in their
collateral-attack defense at paragraph 65 of their Answer, but since they raise
collateral estoppel and res judicata as separate affirmative defenses, see Dkt.
No. 35, ¶¶ 66, 67, a Rooker-Feldman bar to the action seems to be what they
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allege. Defendants are ordered to respond to plaintiff McCarthy’s RookerFeldman filing on or before March 20, 2014, and shall include analysis of their
own in support of the affirmative defense alleged at paragraph 65 of their Answer
that the action is a collateral attack outside the Court’s subject matter jurisdiction.
Further briefing and oral argument will be at the discretion of the Court.
SO ORDERED.

Richard J. Arcara
HONORABLE RICHARD J. ARCARA
UNITED STATES DISTRICT JUDGE
Dated: February 11, 2014

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