United States v. Shepherd

UNITED STATES COURT OF APPEALS
For the Fifth Circuit

No. 93-1892

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

VERSUS

JOHN SHEPHERD, Individually
and as Substitute Trustee, ET AL.,

Defendants-Appellants.

Appeal from the United States District Court
for the Northern District of Texas
( June 14, 1994 )

Before JOHNSON, BARKSDALE and DeMOSS, Circuit Judges.

DeMOSS, Circuit Judge:

This case raises the issue of whether a federal district court

had jurisdiction to set aside and void a state court judgment.

Concluding that the federal district court did not have

jurisdiction, we reverse.

Background

The government filed suit on behalf of the Farmers Home

Administration ("FmHA") in the United States District Court for the

Northern District of Texas, Lubbock Division, seeking, inter alia,

to set aside and void a previous judgment by the 121st Judicial
District Court of Yoakum County, Texas. The state court judgment

confirmed the validity of a series of foreclosure sales, one of

which extinguished a junior lien held by the FmHA on two pieces of

property in Yoakum County. The essence of the government's

complaint in federal court was that John Shepherd and others had

engaged in a scheme to extinguish the FmHA's junior lien by

purchasing superior liens and conducting fraudulent foreclosure

sales.

The federal district court exercised jurisdiction over the

government's action and ultimately entered a judgment voiding the

state judgment as to the FmHA's lien. Shepherd and the other

interested parties have appealed, contending, inter alia, that the

federal district court lacked jurisdiction. We agree.

Discussion

The Rooker/Feldman doctrine holds that federal district courts

lack jurisdiction to entertain collateral attacks on state

judgments.1 A federal complainant cannot circumvent this

jurisdictional limitation by asserting claims not raised in the

state court proceedings or claims framed as original claims for

relief. If the district court is confronted with issues that are

"inextricably intertwined" with a state judgment, the court is "in

1
Liedtke v. State Bar of Texas, No. 92-2623, 1994 WL 93192,
at 2 (5th Cir. Apr. 8, 1994); See Rooker v. Fidelity Trust Co.,
263 U.S. 413, 415, 44 S. Ct. 149, 150 (1923) (the jurisdiction of
the District Court "is strictly original"); District of Columbia
Court of Appeals v. Feldman, 460 U.S. 462, 476 and 482, 103 S.
Ct. 1303, 1311 and 1315 (1983) ("a United States District Court
has no authority to review final judgments of a state court in
judicial proceedings").

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essence being called upon to review the state-court decision,"2 and

the originality of the district court's jurisdiction precludes such

a review.

In this instance, the federal district court exercised

jurisdiction over claims relating to the ownership of the Yoakum

County property. Ultimately the court set aside and voided the

state judgment insofar as it related to the FmHA's asserted

interest in the property. In accordance with the plain dictates of

the Rooker/Feldman doctrine, we hold that the district court had no

jurisdiction to review or disturb the Yoakum County judgment.

Therefore, the state court's conclusion that the FmHA's lien had

been validly extinguished remains intact.

The government argues that the state judgment is void and

therefore subject to collateral attack.3 However, in Texas, when

a collateral attack is made on a judgment, the error which is

alleged to render the judgment void must appear on the face of the

court record.4 Having reviewed the state court record, we conclude

2
Feldman, 103 S. Ct. at 1315 n. 16; see Liedtke, at *2
(citing cases).
3
See Browning v. Placke, 698 S.W.2d 362, 363 (Tex. 1985)
(recognizing that only void judgments are subject to collateral
attack in Texas).
4
Martin v. Stein, 649 S.W.2d 342, 345 (Tex. App.--Fort Worth
1987, writ ref'd n.r.e.); E.D. Systems Corp. v. Southwestern Bell
Tel., 674 F.2d 453, 457 (5th Cir. 1982).

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that it contains no error of the sort that would render the state

judgment void.5

Although the government presented evidence to the federal

court indicating that Shepherd and others may have engaged in

fraud, none of this evidence was made a part of the state court

record. And although the government contends that it was not aware

of the state court proceedings at the time, and thus had no

opportunity to present this evidence to the state court, we find

this contention hollow.

At the time the government filed its rather long and detailed

complaint in federal court, the state judgment was only 21 days

old. The government appended as exhibits to its complaint all of

the relevant documents from the state court proceedings, including

the state judgment itself. We find it more than a fortuity that

the government's filing of the instant suit came so closely on the

heels of the signing of the state judgment.

Even if we give the benefit of the doubt to the government and

assume that it had no knowledge of the filing of the state court

action and that it found out about the state court judgment only

after it was entered, we nevertheless conclude that the government,

by bringing this action in federal court, made the conscious

5
In Texas, a judgment is void only if it is shown that the
rendering court (1) lacked jurisdiction over the party or his
property; (2) lacked jurisdiction over the subject matter of the
suit; (3) lacked jurisdiction to enter the particular judgment
rendered; or (4) lacked the capacity to act as a court. Placke,
698 S.W.2d at 363. Errors that do not relate to these
jurisdictional deficiencies render a judgment merely voidable,
and correction of such errors must occur, if at all, on direct
attack. Id.

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decision to forego several potentially effective state court

remedies. The first would have been for the government to raise

its fraud claims in a motion for new trial. At the time the

government filed suit, the state court had at least nine more days

of plenary power in which it could have vacated the judgment and

ordered a new trial if persuaded of the validity of the

government's claim.6 Moreover, Texas allows a defendant who did

not appear in person or by an attorney of his choice to file a

motion for new trial as late as two years after the judgment was

signed, if the judgment was rendered on service of process by

publication, as it was in this case.7 Texas also allows for a bill

of review proceeding in which one can attack a final judgment as

late as four years after the date the judgment was signed.8

Finally, Texas allows a party who did not participate in the trial

of a case to attack a final judgment up to six months later by

filing a writ of error in an intermediate appellate court.9

It may be that the government has now forfeited some of these

remedies by failing to exercise its rights in the state court.

However, such a forfeiture cannot be blamed on anyone but the

6
TEX. R. CIV. P. 320.
7
TEX. R. CIV. P. 329.
8
Williams v. Adams, 696 S.W.2d 156 (Tex. App.--Houston [14th
Dist.] 1985, writ. ref'd n.r.e.).
9
TEX. R. APP. P. 45(d).

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government. The government made the conscious decision to ignore

the state court's jurisdiction, and now it must live with the

consequences of that decision.

The district court's judgment is REVERSED and the cause

REMANDED with instructions to DISMISS for lack of jurisdiction.

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