D.C. Healthcare Systems, Inc. v. District of Columbia

Summary

The D.C. Circuit held that the Rooker-Feldman doctrine did not bar a shareholder's federal lawsuit challenging the District of Columbia's alleged underpayment and fraudulent inducement that led to an insurance company's rehabilitation, because the federal claims were independent of the state court's approval of the rehabilitation plan. The court emphasized that the Superior Court's role in rehabilitation proceedings under D.C. Code § 31-1312 is limited to reviewing the rehabilitator's actions for abuse of discretion and ensuring the plan is fair and equitable, not adjudicating constitutional, statutory, or common-law claims. Therefore, the district court had subject-matter jurisdiction over the shareholder's claims for unconstitutional taking, due process violations, Medicaid violations, and state-law torts. The case clarifies the narrow scope of Rooker-Feldman and distinguishes it from preclusion doctrines.

Holdings

1. The Rooker-Feldman doctrine does not apply because the federal lawsuit does not invite district court review and rejection of the Superior Court's judgments; it presents independent claims.

Questions Presented

1. Whether the Rooker-Feldman doctrine deprives the district court of subject-matter jurisdiction over Healthcare Systems' federal lawsuit.

Disposition

reversed