John Bari Gilani vs Wynn Las Vegas, L.L.C.
- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- 23-40477 (5th Circuit, Jan 30,2024) Not Published
- Tag(s):
-
- Ruling:
- The Rooker-Feldman doctrine prevents a federal bankruptcy court from reviewing a state court's decision that a debt owed to a casino was not discharged in an individual debtor's chapter 7 case. The former debtor chose to litigate the discharge issue in state court and lost; he does not get a do-over in bankruptcy court.
- Procedural context:
- The Fifth Circuit affirmed the district court, which affirmed the bankruptcy court, which found that it did not have jurisdiction to consider a former debtor's request to enforce the discharge injunction from his newly reopened chapter 7 case to bar a casino from collecting a debt. The debtor had already sought that relief, and lost, in a state district court. The bankruptcy court correctly found that the debtor's request was essentially a request for review of an adverse state court judgment, and that the court did not have jurisdiction to grant the relief requested.
- Facts:
- In 2009, the State of Nevada began a criminal action against the Debtor and charged him with multiple felonies for passing bad checks. In 2011, the Debtor filed a voluntary petition for relief under Chapter 7 and received a discharge of general unsecured claims against him. In 2013, the Debtor pled guilty to passing 30 checks totaling $735,000 during August -- October 2008, with the intent to defraud several hotels and casinos in Las Vegas. The plea agreement allowed him to withdraw a felony plea and substitute a plea to a gross misdemeanor if he made payments of at least $100,000 in restitution within five years. After an extension to make that payment, on September 4, 2020, the Nevada state court rendered judgment convicting the Debtor of a gross misdemeanor and ordered substantial restitution to various hotels and casinos, including restitution in the amount of $218,123.83 payable to Wynn Las Vegas.
In 2022, Wynn filed a petition in state court to enforce the restitution order. The Debtor opposed the petition and argued that Wynn was seeking to collect a debt for casino markers that was discharged in his 2011 bankruptcy case. The state court disagreed with the Debtor and determined that the debt owed to Wynn was preserved from discharge by 11 USC 523(a)(7), which preserves any "condition a state criminal court imposes as part of a criminal sentence." The state court also found that the restitution obligation in the 2013 plea agreement was created two years after the 2011 discharge, and was not encompassed by the automatic stay or permanent discharge injunction.
- Judge(s):
- Davis, Ho, Ramirez
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