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September 17, 2008

6th Circuit Rules That Rooker-Feldman Does Not Prevent Bankruptcy Court from Declaring that Post-Discharge Judgment is Void Ab Initio

In re Hamilton,  --- F.3d ---, 2008 WL 3905437 (6th Cir,  August, 2008)

Issue:   Is a post-discharge judgment against the debtor void ab initio or must the bankruptcy court leave the judgment alone based on the Rooker-Feldman doctrine?                   

Holding:    The judgment is void per Section 524(a).   

The debtor filed chapter 7 and received his discharge.  His ex-wife filed a non-dischargeability action against him but lost.  She then sued him in state court for indemnification on a certain debt and the debtor filed an answer in pro per without mentioning the discharge.  The debtor lost in state court and appealed.  He raised the discharge for the first time on appeal.  The state court of appeals said the discharge is an affirmative defense and was waived.  The debtor filed suit in bankruptcy court and the ex defended saying that Rooker-Feldman prevented the Bankruptcy Court from interfering with the state court judgment.  The Bankruptcy Court ruled against the debtor.  The District Court reversed saying Section 524(a) applies and Rooker-Feldman does not.

The Court of Appeals affirmed the reversal.  “The Rooker-Feldman doctrine, we hold today, is confined to . . . cases brought by state-court 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.  Rooker-Feldman does not otherwise override or supplant preclusion doctrine or augment the circumscribed doctrines that allow federal courts to stay or dismiss proceedings in deference to state-court actions.”  “If a federal plaintiff ‘present[s] some independent claim, albeit one that denies a legal conclusion that a state court has reached in a case to which he was a party ..., then there is jurisdiction and state law determines whether the defendant prevails under principles of preclusion.’ ”

As to Section 524(a), it states the discharge “voids any judgment at any time obtained.”  Asserting the discharge as an affirmative defense is “unnecessary.” 

September 17, 2008 in Other Circuit Briefs | Permalink

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