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Nichols v. GFS II LLC

United States District Court, W.D. Wisconsin

May 12, 2016

LORI NICHOLS, Plaintiff,


WILLIAM M. CONLEY District Judge

In this civil action, plaintiff Lori Nichols asserts a number of claims against defendants GFS II LLC d/b/a Gateway Financial Solution and Schisler Law, PLC, based on “extra-territorial” garnishment of her wages. Defendants seek summary judgment on plaintiff’s remaining federal claim for alleged violations of her due process rights brought under 42 U.S.C. § 1983. (Dkt. #24.) While defendants’ argument that they did not act under “color of state law” as that phrase has been interpreted for purposes of § 1983 would appear to have merit, the court cannot reach that issue for a threshold reason that neither side bothered to even reach -- all of plaintiff’s claims are barred from proceeding in federal courts by the Rooker-Feldman doctrine. See Kobilka v. Cottonwood Fin. Wis., LLC, No. 14-CV-268-WMC, 2015 WL 1137471, at *2 (W.D. Wis. Mar. 12, 2015).[1]Accordingly, absent either party filing an explanation as to why this court can exercise jurisdiction within 14 days, this case will be dismissed outright for lack of subject matter jurisdiction. Even if jurisdiction ultimately lies, the remaining deadlines will be struck in this case, since defendants’ motion for summary judgment on plaintiff’s only federal claim appears likely to be granted and the remaining state law claims to be subject to dismissal without prejudice.


Typically in ruling on a motion for summary judgment, the court first would set forth the undisputed facts. Here, as evidenced by defendants’ motion for summary judgment, the undisputed facts are simply the allegations in the complaint. Indeed, defendants could have filed a motion to dismiss pursuant to Rule 12(b)(6).

Regardless, there is no dispute that plaintiff’s claim under 42 U.S.C. § 1983 is premised on her allegation that defendants used the Michigan legal process to garnish her wages despite her being a citizen of the state of Wisconsin, thus allegedly violating her due process rights under the Fourteenth Amendment of the United States Constitution. (Compl. (dkt. #1) ¶ 77-79.) In particular, plaintiff alleges that “on August 11, 2009, a Default Judgement was entered against her for $9, 164.48.” (Id. at ¶ 40.) “On September 30, 2009, Atty. Scott Schisler, on behalf of Defendant Schisler Law[, ] issued a Request and Writ for Garnishment in Michigan for the wages that Ms. Nichols was earning in Wisconsin.” (Id. at ¶ 41.)

Plaintiff further alleges that: (1) “Defendants Schisler Law and Gateway acted under color of state law when they prepared, filed, and subsequently served the various Michigan garnishment documents on Ms. Nichols’ Wisconsin employer”; and (2) “[b]y serving Michigan legal process -- in the form of Michigan garnishment documents --extraterritorially, the Defendants were and are engaging in state action.” (Id. at ¶¶ 43- 44.) It is also undisputed that: (1) the § 1983 claim is the only federal claim remaining in this lawsuit, the parties having settled the FDCPA claim; and (2) the only asserted basis for this court’s original jurisdiction is under 28 U.S.C § 1331.


I. Rooker-Feldman Doctrine

For reasons unclear to the court, neither side addressed in their summary judgment briefs the apparent jurisdiction problem with plaintiff’s federal challenge to actions approved by a Michigan court, including its issuance of the underlying Writ of Garnishment that is allegedly the cause of plaintiff’s injury. In Kobilka, this court confronted the precise question presented here: whether a plaintiff’s claims based on injuries due to defendant’s extra-territorial garnishment of wages were barred by the Rooker-Feldman doctrine, and concluded that such claims were barred in federal court because they would “require the court to review the state court’s actions with respect to its garnishment of wages.” Kobilka, 2015 WL 1137471, at *2; see also Harold v. Steel, 773 F.3d 884, 886 (7th Cir. 2014) (affirming dismissal on Rooker-Feldman grounds of an FDCPA claim on the basis that it sought to challenge an Indiana state-court garnishment order).

Moreover, “[b]ecause the Rooker-Feldman doctrine is jurisdictional in nature, ” its applicability must be determined before turning to the merits. See Long v. Shorebank Dev. Corp., 182 F.3d 548, 554-55 (7th Cir. 1999) (citing Garry v. Geils, 82 F.3d 1362, 1365 (7th Cir. 1996)). Accordingly, the parties will be given 14 days to advise why Rooker- Feldman does not require dismissal of this lawsuit. A failure to do so will result in an immediate dismissal without prejudice.[2]

II. Motion for Summary Judgment

For obvious reasons, this court must reserve on the merits of defendants’ summary judgment motion until the question of subject matter jurisdiction is resolved. The court would be remiss, however, not to note in light of its work to date that in order to be characterized as state action under 42 U.S.C. § 1983, “the [constitutional] deprivation must be caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the [S]tate or by a person for whom the State is responsible . . . [and] the party charged with the deprivation must be a person who may fairly be said to be a [S]tate actor.” Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 937 (1982). Here, there is no dispute that the alleged constitutional violation involved a scheme created by the State, namely the post-judgment garnishment scheme. Accordingly, the pending motion for summary judgment turns on whether defendants were state actors when they secured a post-judgment writ of garnishment from a Michigan court.

As plaintiff acknowledges, an attorney’s mere use of a state’s legal process does not transform the attorney (or his client) into a state actor.[3] While plaintiff persists that “incorrect garnishment actions carry with them the color of state law” (Pl.’s Opp’n (dkt. #27) 3), the cases cited by plaintiff all involve instances where a creditor uses the court system for an immediate taking of property without involvement of judicial process. See N. Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 606-07 (1975) (holding that Georgia garnishment statute was unconstitutional because it did not provide for notice, hearing or participation of a judicial officer); Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, (1982) (finding prejudgment writ of attachment procedure violated due process); Sniadach v. Family Fin. Corp. of Bay View, 395 U.S. 337, 342 (1969) (finding notice and hearing required before obtaining a court order for garnishment of wages).

Here, it appears undisputed that (1) defendants had secured a judgment; (2) defendants received a writ of garnishment from the court and served that writ on plaintiff; and (3) Michigan provides an opportunity for garnishees to file an objection to the writ of garnishment. See, e.g., Mich. Ct. Rule 3.101(K) (describing procedures for garnishment after judgment, including subsection (K) allowing for objections). As the Supreme Court explained in Lugar, “private misuse of a state statute does not describe conduct that can be attributed to the State.” 457 U.S. at 941. Nevertheless, the court will reserve on ...

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