White v. Schmidt White v. Santos

• Court: Court of Appeals for the Second Circuit
• Decided: March 26, 2024
• Docket: 22-1267-cv 22-1911-cv
• Status: Unpublished

Opinion

22-1267-cv; 22-1911-cv White v. Schmidt; White v. Santos

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 26th day of March, two thousand twenty- four.

PRESENT: ROBERT D. SACK, WILLIAM J. NARDINI, MYRNA PÉREZ, Circuit Judges. _____________________________________

Paul White,

Plaintiff-Appellant,

v. 22-1267

Sandra Schmidt, AKA Sandra Kroger Schmidt, AKA Sandra K. Schmidt,

Defendant-Appellee, Pat Doe, (1–10),

Defendants.

_____________________________________

v. 22-1911

Teodocia Santos, Ella Abney, Personally and as Executrix of the Estate of Albert Abney, Pat Doe,

Defendants-Appellees. *

FOR PLAINTIFF-APPELLANT: Paul White, pro se, Coxsackie, NY.

FOR DEFENDANTS-APPELLEES: No appearance.

Appeals from judgments of the United States District Court for the Northern

District of New York (Mae A. D’Agostino, District Judge).

* The Clerk of Court is directed to consolidate these appeals for purposes of decision. 2 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgments of the district court are

AFFIRMED IN PART and VACATED IN PART and REMANDED.

* * *

Plaintiff-Appellant Paul White, pro se and incarcerated, appeals from the

April 26, 2022, and August 1, 2022, sua sponte dismissals of two federal lawsuits

(Mae A. D’Agostino, District Judge), each pursuant to the Rooker-Feldman doctrine.

White’s appeals have been considered in tandem and consolidated for disposition.

In 2015, White was convicted in New York state court of grand larceny and fraud,

stemming from a scheme to defraud investors in a North Carolina real estate

development. See Spota v. White, No. 29681-12, 2016 WL 6427362, at *2, 4 (N.Y.

Sup. Ct. Suffolk Cnty. Oct. 28, 2016) (explaining the background of the criminal

case in a decision on a civil forfeiture proceeding). The Supreme Court, Suffolk

County, awarded $2.975 million in restitution to his victims, who included Sandra

Schmidt, Teodocia Santos, and Ella and Albert Abney (the “Abneys”). Id. at *2.

White’s appeal of the criminal judgment is, as of the time of writing, still pending.

3 In 2014, the Suffolk County District Attorney’s Office brought a civil

forfeiture action against White and obtained a $2.4 million judgment. Id. at *4, 9.

After the judgment was entered, White retained an attorney who obtained a

decision in a North Carolina court, which he claims held that the investors had

received their bargained-for-benefit, consisting of the validly deeded ownership

of the property.

In 2017, White sued Schmidt and the Abneys in the Eastern District of New

York, claiming that they had provided false statements to the Suffolk County

District Attorney’s Office and had testified falsely at grand jury proceedings and

at his criminal trial, which resulted in their unjust enrichment by virtue of the

restitution judgment that had been entered in their favor. In two different orders,

the Eastern District dismissed the action, reasoning that the defendants were

entitled to witness immunity, and in the alternative, the court lacked subject

matter jurisdiction to entertain the unjust enrichment claim under Rooker-Feldman.

See generally White v. Abney, No. 17-cv-4286, 2020 WL 5848647 (E.D.N.Y. Sept. 30,

2020); White v. Abney, No. 17-cv-4286, 2021 WL 1176218 (E.D.N.Y. Mar. 29, 2021).

4 In 2021, White filed the actions underlying these appeals. He sued Schmidt

in the Northern District of New York, claiming that the restitution judgment had

been satisfied by the North Carolina decision and that she had been unjustly

enriched by a sum that he had separately paid to her. In a separate action, he

sued Santos and the Abneys, raising substantially identical claims.

In 2022, the district court sua sponte dismissed each action as barred under

the Rooker-Feldman doctrine and, alternatively, by collateral estoppel or res judicata,

based on the preclusive effect of the Eastern District’s earlier Rooker-Feldman

procedural holding. See generally White v. Schmidt, No. 21-cv-854, 2022 WL

1222805 (N.D.N.Y. Apr. 26, 2022); White v. Santos, No. 21-cv-417, 2022 WL 3025723

(N.D.N.Y. Aug. 1, 2022). White timely appealed. We assume the parties’

familiarity with the case.

We review de novo a sua sponte dismissal of a complaint, including a

dismissal based on collateral estoppel, res judicata, or lack of subject matter

jurisdiction under Rooker-Feldman. Meadows v. United Servs., Inc., 963 F.3d 240, 243

(2d Cir. 2020) (sua sponte dismissal); Comput. Assocs. Int’l, Inc. v. Altai, Inc., 126 F.3d

365, 368 (2d Cir. 1997) (collateral estoppel and res judicata); Edwards v. McMillen 5 Cap., LLC, 952 F.3d 32, 35 (2d Cir. 2020) (Rooker-Feldman). When reviewing a sua

sponte dismissal, we “accept all of the facts alleged in the complaint as true and

draw all inferences in the plaintiff’s favor.” Harnage v. Lightner, 916 F.3d 138, 140–

41 (2d Cir. 2019). 1

Recognizing the “special solicitude” this Court must afford pro se litigants,

see Rosa v. Doe, 86 F.4th 1001, 1007 (2d Cir. 2023), we nevertheless conclude that

White’s claims against Schmidt and the Abneys are barred by res judicata, or claim

preclusion. “[C]laim preclusion . . . operates in two ways: (1) it bars claims that

were brought and decided in a prior litigation; and (2) it bars all other claims

relating to the same transaction against the same defendant that could have been

brought at that time.” N. Assurance Co. of Am. v. Square D Co., 201 F.3d 84, 87 (2d

Cir. 2000). White v. Abney involved claims by White against Schmidt and the

Abneys, so claim preclusion bars him from now raising any claims “relating to the

same transaction . . . that could have been brought” at the time he filed suit in White

v. Abney. Id. White alleges that the following had occurred before he filed his

1 Unless otherwise indicated, case quotations omit all internal quotation marks, alteration marks, footnotes, and citations. 6 complaint in White v. Abney: (1) the Suffolk County Court entered restitution

judgments in favor of Santos, the Abneys, and Schmidt against White, (2) White

obtained a decision from the North Carolina Superior Court determining that the

defendants in these cases held valid deeds for the properties at issue, and (3) White

paid approximately $31,000 each to Schmidt and the Abneys in partial satisfaction

of the restitution judgments.

In the present cases, White seeks a declaratory judgment that the Suffolk

County Court restitution judgments against him were satisfied by the North

Carolina decision, and a return of the money he has paid to the defendants based

on a theory of unjust enrichment distinct from the theory of unjust enrichment

White relied on in White v. Abney. However, because White allegedly paid the

defendants a partial restitution before the North Carolina decision was issued, and

the North Carolina decision was issued before White initiated White v. Abney,

White could have included his current claims for declaratory relief and unjust

enrichment against Schmidt and the Abneys in White v. Abney. Accordingly,

White’s claims against Schmidt and the Abneys are barred by res judicata.

7 Santos, however, was not included as a defendant in White v. Abney, so claim

preclusion cannot apply to White’s current claims against Santos. See N.

Assurance, 201 F.3d at 87. We therefore consider whether White’s claims against

Santos are barred under the Rooker-Feldman doctrine or collateral estoppel, as the

district court found. We determine that they are not. Under the Rooker-Feldman

doctrine, “federal district courts lack jurisdiction over suits that are, in substance,

appeals from state-court judgments.” Hoblock v. Albany Cnty. Bd. of Elections, 422

F.3d 77, 84 (2d Cir. 2005). For a federal court to abstain under Rooker-Feldman,

(1) the federal-court plaintiff must have lost in state court; (2) the plaintiff must complain of injuries caused by a state-court judgment; (3) the plaintiff must invite district court review and rejection of that judgment; and (4) the state-court judgment must have been rendered before the district court proceedings commenced.

Plymouth Venture Partners, II, L.P. v. GTR Source, LLC, 988 F.3d 634, 641 (2d Cir.

2021). Here, the relevant state-court judgment is the criminal restitution

judgment, which White alleges has been satisfied, not the civil forfeiture judgment.

The civil forfeiture court did not address White’s challenge to the restitution order,

explaining instead that White’s challenge was an improper collateral attack on the

8 criminal conviction, which had to be raised instead on direct criminal appeal. See

Spota, 2016 WL 6427362, at *4. Thus, if White is complaining of an injury from a

state-court judgment, the relevant judgment is the criminal restitution judgment.

The application of Rooker-Feldman here was improper because the criminal

restitution judgment was not final at the time the federal lawsuit commenced. In

Hunter v. McMahon, 75 F.4th 62, 65, 67, 70–71 (2d Cir. 2023), this Court concluded

that the Rooker-Feldman doctrine could not apply when an appeal remains pending

in state court at the time a complaint is filed, because Rooker-Feldman applies only

after state-court proceedings have “ended.” Because White’s criminal appeal

remains pending, the relevant state court proceeding had not concluded before

White filed his complaint. Accordingly, the district court erred by dismissing the

complaint based on Rooker-Feldman.

Although the district court alternatively dismissed the complaint on the

basis of collateral estoppel, we do not affirm on this ground. In White v. Abney,

the Eastern District dismissed White’s complaint against Schmidt under the

Rooker-Feldman doctrine. Abney, 2020 WL 5848647, at *7. While collateral

estoppel can bar reconsideration even of erroneous prior rulings, our decision in 9 Hunter amounted to a significant clarification of our law on this fairly significant

issue of Rooker-Feldman’s proper scope. See Faulkner v. Nat’l Geographic Enters. Inc.,

409 F.3d 26, 37 (2d Cir. 2005) (“[E]ven where the specified elements of collateral

estoppel are present, reexamination of a legal issue is appropriate where there has

been a change in the legal landscape after the decision claimed to have preclusive

effect.”). Accordingly, we do not affirm the judgment based on the preclusive

effect that the Rooker-Feldman holding in White v. Abney might have.

In sum, the district court erred by relying on the Rooker-Feldman doctrine to

sua sponte dismiss White’s complaints. We decline to affirm on the alternative

grounds of collateral estoppel. However, the district court’s judgments with

respect to Schmidt and the Abneys can be affirmed on the alternative ground of

res judicata. We express no view on the merits (or lack thereof) of the underlying

suit against Santos, which is better addressed by the district court in the first

10 instance. 2 Therefore, the judgments of the district court are AFFIRMED IN

PART and VACATED IN PART and REMANDED for further proceedings.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court

2 We acknowledge that the district court may decide that a stay is warranted pending the outcome of the criminal restitution judgment appeal. See Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 292 (2005) (“Comity or abstention doctrines may, in various circumstances, permit or require the federal court to stay . . . the federal action in favor of the state-court litigation.”). 11