Collins Einhorn Farrell attorneys Theresa M. Asoklis, Michael J. Cook and Eric M. Kociba obtained dismissal of a class-action complaint claiming that a law firm violated federal and state law. The federal district court agreed that the plaintiffs’ claims, which were based on the interest rate in state-court judgments, were “functionally appeals of state court decisions.” Since federal courts cannot act as an appellate court for state-court judgments, the court lacked jurisdiction and dismissed the plaintiffs’ claims.
In VanderKadde v Mary Jane M. Elliott, P.C., W.D. Mich. No. 1:17-cv-203, the plaintiffs claimed that a law firm made false or misleading representations when it obtained state-court judgments that ordered interest at a rate of 13 percent. They alleged that the law firm violated the Fair Debt Collection Practices Act and two Michigan statutes because the interest rate was excessive and contrary to law. The complaint was filed on behalf of five plaintiffs and all similarly situated persons, which could have included nearly 100,000 other plaintiffs.
The law firm, represented by Collins Einhorn, moved to dismiss the complaint. The motion explained that federal courts cannot act as a court of appeals for state-court decisions. And if the plaintiffs believed that the interest rate was wrong, their remedy was to file an appeal in state court (i.e., to the Michigan Court of Appeals). As a result, the court didn’t have jurisdiction over the plaintiffs’ claims.
The district court agreed with the law firm’s argument. It explained that the “[p]laintiffs’ injuries from the incorrect interest rate were produced by the state-court judgment.” And a long-standing federal-law doctrine (Rooker-Feldman) “bars federal district courts from reviewing claims of legal error in state court judgments.” So it granted the motion to dismiss.