Cogan v. Trabucco
- Summarized by David Treacy , U.S. Bankruptcy Court, Eastern District of Kentucky
- 4 months 2 weeks ago
- Case Type:
- Business
- Case Status:
- Reversed and Remanded
- Citation:
- No. 22-16948 (9th Circuit, Aug 21,2024) Published
- Tag(s):
-
- Ruling:
- The U.S. Court of Appeals for the Ninth Circuit held a district court erred in dismissing a declaratory judgment action under the Rooker-Feldman doctrine. The appellant--counsel for bankruptcy creditors--could collaterally attack in federal court a state court's subject matter jurisdiction over a bankruptcy debtor's malicious prosecution action. Federal law completely preempted the malicious prosecution claim and it only could be asserted in federal court as part of the debtor's bankruptcy case.
- Procedural context:
- Due to procedural machinations in the Arizona state court malpractice action, Debtor argued the appeal was moot. A significant portion of the Ninth Circuit's opinion addresses and rejects the mootness argument before turning to the Rooker-Feldman issue. A concurrence (stating the author joins the primary opinion in full) criticizes certain prior Ninth Circuit Rooker-Feldman precedents and "highlight(s) an unresolved circuit split on the question of whether attorneys who allegedly abuse the federal bankruptcy process, like [Appellant], may be held accountable in state court."
- Facts:
- Appellant Jeffrey A. Cogan, an attorney, represented creditors in Debtor/Appellee Dr. Arnaldo Trabucco's chapter 7 bankruptcy case filed in the U.S. Bankruptcy Court for the District of Nevada. Appellant represented the creditors in an Arizona state court medical malpractice action. He also filed an adversary proceeding on the creditors' behalf in Debtor's bankruptcy case, seeking to except any malpractice-related debt from Debtor's discharge under 11 U.S.C. § 523(a)(2)(A) and (a)(6). The parties later stipulated to dismiss the adversary proceeding with prejudice, but agreed creditors could continue to litigate the Arizona state court malpractice action on negligence grounds alone. After the adversary complaint was dismissed, Debtor filed an Arizona state court complaint against Appellant and the creditors, alleging the filing of the adversary complaint against him constituted, inter alia, malicious prosecution. An Arizona jury awarded Debtor an $8 million verdict against Appellant. He appealed the verdict to the Arizona Court of Appeals, which reversed in part and vacated the damage award. Debtor petitioned the Arizona Supreme Court for review. That court denied and also declined to comment on Appellant's (new) argument that the Arizona state court lacked subject matter jurisdiction as the malicious prosecution case involved conduct that occurred during a federal bankruptcy proceeding. After the matter returned to the trial court for a new trial, Appellant filed a declaratory judgment action in the U.S. District Court for the District of Nevada, "seeking a declaration that any judgment in the Arizona malicious prosecution action 'is not valid and not enforceable against [Appellant]' and 'void ab initio' due to 'lack[]' of 'subject matter jurisdiction.'” The district court granted Debtor's motion to dismiss Appellant's complaint, "concluding that [Appellant]’s collateral challenge of the Arizona malicious prosecution judgment was barred by the Rooker-Feldman doctrine." Appellant timely appealed to the Ninth Circuit.
- Judge(s):
- Smith, Bennett, Collins
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!
