Opposition Brief — Tardiff v. California Department of Health Services

; Supreme Court, U.S,

( FILED

ey

No. 01-1655 JUL 11 2002

OFTICE OF THE CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

DAYID C. TARDIFF, Petitioner,

v.

CALIFORNIA DEPARTMENT OF

HEALTH SERVICES, Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS, NINTH CIRCUIT

OPPOSITION TO PETITION FOR A WRIT OF CERTIORARI

BILL LOCKYER

Attorney General of the State of California

JAMES M. HUMES

Senior Assistant Attorney General

JOHN H. SANDERS

Lead Supervising Deputy Attorney General

SUSAN A. NELSON

Deputy Attorney General

Counsel of Record

P.O. Box 85266

San Diego, CA 92186-5266

Telephone: (619) 645-2096

Counsel for the California Department

of Health Services

r

i

TABLE OF CONTENTS

Page

INTRODUCTION 1

STATEMENT OF THE CASE 1

A. State Court Proceedings l

1. Municipal Court Proceedings 2

2. Appellate Department Proceedings 3

: 3. First California Supreme Court

: Proceedings 3

: 4. Court of Appeal Proceedings 4

5. Second California Supreme Court

Proceedings 4

B. Federal Court Proceedings 5

1. District Court Proceedings 5

2. Ninth Circuit Court of Appeals

Proceedings 6

QUESTIONS PRESENTED FOR REVIEW 7

li

TABLE OF CONTENTS (continued)

ARGUMENT

REVIEW SHOULD BE _ DENIED

BECAUSE TARDIFF'S SECTION 1983

ACTION SOUGHT DISTRICT COURT

REVIEW OF A STATE COURT

JUDGMENT, AND A_ DISTRICT

COURT MAY NOT EXERCISE

APPELLATE JURISDICTION OVER A

STATE COURT DECISION

A. Issue Preclusion Bars Tardiff's

Federal Complaint

B. Claim Preclusion Bars Tardiff's

Section 1983 Claim

C. The Rooker-Feldman Doctrine

Bars Federal Jurisdiction

D. Review is Precluded by Res Judicata

and the Rooker-Feldman Doctrine

CONCLUSION}

Page

11

12

13

14

ili

TABLE OF AUTHORITIES

Page

California Cases

Kelly v. Vons Companies, Inc.

67 Cal.App.4th 1329 (1998) 8

McCutchen v. City of Montclair

73 Cal.App.4th 1138 (1999) 8

Federal Cases

Clark v. Yosemite Community College District

785 F.2d 781 (1986) 11

Craig v. State Bar of California

141 F.3d 1353 (1998) 12

District of Columbia Court of Appeals v. Feldman

460 U.S. 462 (1983) 12

Dusenbery v. United States

534 U.S. 161 (2002) 13

Jones v. City of Alton

757 F.2d 878 (1985) 11, 12

Marrese v. American Academy of Orthopaedic Surgeons

470 U.S. 373 (1985) 8

Migra v. Warren City School Dist. Bd. of Ed.

465 U.S. 75 (1984) 8

1V

TABLE OF AUTHORITIES (continued)

Mullane v. Central Hanover Bank & Trust Co.

339 U.S. 306 (1950)

Rooker v. Fidelity Trust Co.

263 U.S. 413 (1923)

Worldwide Church of God v. McNair

805 F.2d 888 (1986)

Federal Statutes

12 United States Code

§ 1738

28 United States Code

§ 1331

42 United States Code

§ 1983

Federal Court Rules

Federal Rules of Civil Procedure

12(b)(1)

Federal Rules of Civil Procedure

12(b)(6)

Page

13

12

12

5-8, 11-14

5-6

5-6

Vv

TABLE OF AUTHORITIES (continued)

Page

Constitutional Provisions

Eleventh Amendment

SUPREME COURT OF THE UNITED STATES

No. 01-1655

DAVID C. TARDIFF, Petitioner,

v.

CALIFORNIA DEPARTMENT OF

HEALTH SERVICES, Respondent.

INTRODUCTION

Respondent California Department of Health Services

respectfully requests that this Court deny the petition for writ

of certiorari (petition) filed by David C. Tardiff (Tardiff).

Denial of the petition is appropriate because the complaint filed

in district court by Tardiff inappropriately sought district court

review of a state court judgment. The district court correctly

dismissed with prejudice because it may not exercise appellate

jurisdiction over a state court decision, and the Ninth Circuit

properly affirmed.

STATEMENT OF THE CASE

A. State Court Proceedings

The district court case was filed by Tardiff to collaterally

attack an unpublished state court decision. He failed to file a

direct petition for review in this Court from the decision of a

state court of last resort. The district court’s order summarizes

2

the state court proceedings in a section entitled, "Background."

Appendix E to Petition (Appendix E), App. 21-27. Since the

state court proceedings are germane to the district court's order,

they are set forth here.

1. Municipal Court Proceedings

Kimberly Belshe, as Director (Director or Defendant

Belshe) of the California Department of Health Services

(Health Services), filed a complaint in Beverly Hills Municipal

Court (Case No. 96C02721) on December 23, 1996, against

attorney Tardiff and his former client, Janet Vallejo (Vallejo),

after the Director discovered that Tardiff had obtained and

disbursed two personal injury settlements on behalf of his

Medi-Cal beneficiary clients, Vallejo and Ryan Thomas

(Thomas), without giving the Director the statutorily mandated

notices set forth in California Welfare and Institutions Code

sections 14124.73, 14124.76, and 14124.79 which would have

permitted the Director to recoup Medi-Cal's health care

expenditures on behalf of Vallejo and Thomas. Appendix E,

App. 21-22.

The parties filed cross-motions for summary judgment.

Appendix E, App. 23. Following briefing and prior to the

hearing, the parties stipulated that there were no material facts

in dispute.” Id. On December 10, 1998, the trial court granted

the Director's motion for summary judgment and denied Tardiff

and Vallejo's cross-motion for summary judgment. Jd.

1. Tardiff mistakenly asserts that the original case was

filed by the State of California. Petition, p. 3.

2. Without citation, Tardiff sets forth a misleading

paragraph of immaterial facts at page 12 of the petition.

3

The trial court ordered the Director's counsel to serve a

notice of ruling. Appendix A to Petition, App. 1. The notice

of ruling set forth the trial court's findings, including that

(5) the required notices were not given by the

attorney retained to assert the beneficiaries’ claims,

and the Director was, therefore, unable to perfect and

satisfy her liens.

Appendix E, App. 242

The trial court entered final judgment for the Director on

January 29, 1999. Appendix E, App. 24.

2. Appellate Department Proceedings

Tardiff appealed to the Los Angeles County Superior

Court Appellate Department (Case No. BV22295), claiming

that the trial court erred in granting the Director's motion for

summary judgment because

(1) no notice ofa Medi-Cal lien was given to [Tardiff

or Vallejo] in the Vallejo matter; (2) ahospital lien is

not effective without written notice; (3) to enforce a

lien against a person without notice violates his right

to due process; and (4) in the [Thomas] compromise

case neither [Tardiff] nor the carrier had authority to

dispense funds.

Appendix E, App. 24-25.

3. Tardiff contends that the trial court's judgment

"mentioned not a single word" concerning his lack of notice

issue; however, the trial court's notice of ruling, which he failed

to append, specifically addresses it. Petition, pp. 3, 6, 9.

4

On March 15, 2000, the Appellate Department affirmed

the trial court in a 12-page unpublished memorandum opinion,

rejecting all of Tardiffs claims. Appendix E, App. 25;

Appendix B to Petition, App. 3-13. On April 12, 2000, the

Appellate Department denied Tardiff's petition for rehearing

after judgment or, in the alternative, certification to the

California Court of Appeal. Appendix E, App. 25.

3. First California Supreme Court Proceedings

On May 2, 2000, Tardiff filed a petition for review in the

California Supreme Court (Case No. S088003) which, on May

19, 2000, ordered the case transferred to the California Court

of Appeal, Second Appellate District (Court of Appeal).

Appendix E, App. 25.

4. Court of Appeal Proceedings

The Court of Appeal (Case No. B141 591) considered and

denied Tardiffs petition for writ of mandate-prohibition

without opinion on May 31, 2000. Appendix E, App. 25.%

5. Second California Supreme Court Proceedings

From the Court of Appeal's decision, Tardiff filed a

second petition for review to the California Supreme Court

4. Tardiff's petition here wrongly contends that "[t]he

California Court of Appeal and the California Supreme Court

denied review." Petition, p. 4. As shown by the district court's

order, this is inaccurate. The California Supreme Court took

jurisdiction and transferred the case to the Court of Appeal,

which ultimately denied his petition for writ of mandate-

prohibition. Appendix E, App. 25.

5

(Case No. S089103), which denied review en banc on July 19,

2000. Appendix E, App. 25; Appendix D to Petition, App. 19.”

B. Federal Court Proceedings

1. District Court Proceedings

On July 7, 2000,% twelve days before the California

Supreme Court denied Tardiffs second and final petition for

review, Tardiff filed the instant 42 U.S.C. § 1983 complaint in

federal district court against Health Services and its Director,

as an individual. Appendix E, App. 25.7 The complaint

alleged that "Health Services’ attempt to enforce its Medi-Cal

lien against [him] without providing him notice of the existence

of the lien before he disbursed settlement proceeds to his

clients is violative of due process." Jd., App. 25-26.

On October 27, 2000, Health Services moved for dismissal

of Tardiffs complaint on three grounds: (1) pursuant to

Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) the

5. Although Tardiff appended a copy of the California

Supreme Court's order denying review, this case does not

involve a direct petition for review of a state court judgment.

6. Tardiffs typesetting of the district court's order

erroneously changes the filing date in that court's findings from

July 7, 2000, to July 1, 2000. Appendix E, App. 25.

7. Defendant Belshe was never served as an individual.

Appendix E, App. 39. Tardiffs complaint made no specific

claim against her. Jd., App. 40. The district court dismissed

Defendant Belshe sua sponte, stating, "[A]ny amendment would

be futile . . . any claim predicated on [Defendant Belshe's]

enforcement of Medi-Cal liens against Plaintiff Tardiff would

be res judicata." Jd.

action is barred by the doctrine of res judicata and 12 U.S.C.

§ 1738's "full faith and credit" provisions, (2) pursuant to

Federal Rules of Civil Procedure 12(b)(1) Health Services is

cloaked with Eleventh Amendment sovereign immunity, and

(3) pursuant to Federal Rule of Civil Procedure 12(b)(1) Health

Services is not a "person" within the meaning of 42 U.S.C. §

1983. Appendix E, App. 26-27.

In a 19-page unpublished order dated February 6, 2001,

the district court dismissed Tardiff's claims with prejudice. The

district court ruled that Tardiff's action was barred by res

judicata and the Rooker-Feldman doctrine. Appendix E, App.

20-40.¥

2. Ninth Circuit Court of Appeals Proceedings

On February 22, 2001, Tardiff filed a notice of appeal with

the Ninth Circuit. Appendix F to Petition, App. 41. Following

briefing by the parties, the Ninth Circuit reviewed de novo and

filed its unpublished memorandum decision affirming the

district court on October 24, 2001. Appendix G to Petition

(Appendix G), App. 43.2

8. The district court also ruled that Tardiffs claims are

jurisdictionally barred by the Eleventh Amendment and _ that

Health Services is not a "person" under section 1983. Id., App.

37-39.

9. Tardiffs typeset copy of the Ninth Circuit's

memorandum decision erroneously lists the filing date as

January 9, 2002; however, January 9, 2002, is the date it was

filed by the district court after Tardiff's petition for rehearing en

banc was denied by the Ninth Circuit on December 26, 2001.

Appendix H to Petition (Appendix H), App. 45.

The Ninth Circuit ruled,

Tardiff appeals pro se the judgment dismissing

his 42 U.S.C. § 1983 action, which alleged that a

state court judgment enforcing third-party Medi-Cal

liens against him violated due process... . We

review de novo a dismissal based on lack of subject

matter jurisdiction . . . and we affirm.

Tardiff's section 1983 action effectively seeks

review of a state court judgment. The district court

properly dismissed Tardiff's action because a district

court may not exercise appellate jurisdiction over a

state court decision.

Appendix G, App. 44.

Tardiff filed a petition for rehearing en banc, which was

denied on December 26, 2001. Appendix H, App. 45.

QUESTIONS PRESENTED FOR REVIEW

Tardiff states that the "issue presented here is whether or

not the due process question was actually litigated in the state

courts according to the rules set out by the Ninth Circuit's own

cases and furthermore what the term actually litigated means."

Petition, p. i.

Health Services objects to Tardiffs framing of the

question. The question presented is whether the Ninth Circuit

properly affirmed, concluding that "The district court properly

dismissed Tardiffs [section 1983] action because a district

court may not exercise appellate jurisdiction over a state court

decision." Appendix G, App. 44.

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8

ARGUMENT

REVIEW SHOULD BE DENIED BECAUSE TARDIFF'S

SECTION 1983 ACTION SOUGHT DISTRICT COURT

REVIEW OF A STATE COURT JUDGMENT, AND A

DISTRICT COURT MAY NOT EXERCISE APPELLATE

JURISDICTION OVER A STATE COURT DECISION

Tardiff claims the basis for Original jurisdiction of his

federal section 1983 complaint was 28 U.S.C. § 1331, for

violation of his due process rights. He is wrong. He misstates

the facts in contending that the issue of due process was never

actually litigated and decided in California's courts. Petition,

Pp. 5-10. To the contrary, the section 1983 claim Tardiff filed

in district court springs from the failed contention that his due

process rights were violated which he raised and litigated to

final judgment at all levels of California's courts. Appendix E,

App. 32. To the extent Tardiff "is asserting that he could not

have brought a section 1983 claim in state court, [he] is

mistaken." Appendix E, App. 32. Further, section 1983 does

not override state preclusion law. Migra v. Warren City School

Dist. Bd. of Ed., 465 U.S. 75, 85 (1984).

A. Issue Preclusion Bars Tardiff's Federal Complaint

The district court correctly stated, "To determine the

preclusive effect of a state court judgment, federal courts must

‘refer to the preclusive law of the State in which judgment was

rendered." Appendix E, App.28 (citing Marrese y. American

Academy of Orthopaedic Surgeons, 470 U.S. 373, 380 (1985)

and Migra, 465 U.S., at 77, n.1, 81, 85). Referring to

McCutchen y. City of Montclair, 73 Cal.App.4th 1138, 1144

(1999), which quoted Kelly v. Vons Companies, Inc., 67

Cal.App.4th 1329 ( 1998), the district court correctly set forth

California's law regarding issue preclusion and applied the facts

9

to the law. Appendix E, App. 29-30. All five prongs of

California's test for collateral estoppel effect are satisfied. Jd.

Tardiff misleadingly contends here, as he did in the district

court, that the trial court's judgment "mentioned not a single

word concerning lack of notice of the Medi-Cal lien." Petition,

pp. 3, 6, 9; Appendix E, App. 30. However, the district court

rejected Tardiff's contention, quoting the trial court's express

finding that

[T]he required notices were not given by the attorney

retained to assert the beneficiaries’ claims, and the

Director was, therefore, unable to perfect and satisfy

her liens.

Appendix E, App. 23-24.

The district court further reasoned:

The state court's judgment need not make an express

rejection of [Tardiff's] arguments in order to have

considered and rejected them. In the case of

[Tardiffs] lack of notice argument, Tardiff admitted

in his brief to the California Court of Appeal that the

trial court had considered the issue when he stated,

‘lack of notice was the principal if not the only issue

in the trial proceedings .. .' [Citation omitted.]

Because Plaintiff concedes that the tral court

considered his lack of notice argument, it logically

follows that when the court made its finding that

a

10

notice was required to be given by Tardiff to the

Director — not vice versa - the trial court necessarily

rejected Tardiff's lack of notice argument.

Appendix E, App. 30.1%

Tardiffalso erroneously claimed in the district court, as he

does here, that the Appellate Division's memorandum opinion

does not decide the due process issue, it merely restates the

problem in a slightly different form." Petition, p. 7; Appendix

E, App. 30. However, his reasoning is flawed.

Rejecting Tardiff's contention, the district court reasoned:

In the case of [Tardiff's] due process argument, the

trial court made no mention of due process in its

judgment because [Tardiff] did not raise the due

process issue until the case was before the Appellate

Division. Once before the Appellate Division, the

due process argument was raised, considered, and

rejected by the Appellate Division, as its opinion

indicates. That the Appellate Division's discussion

of due process was not thorough enough to Satisfy

Tardiff does not render issue preclusion inapplicable

in this case.

Appendix E, App. 30.

In sum, Tardiff's contention that his notice and due

process rights were violated was litigated to final judgment in

California's courts, and issue preclusion bars his federal

complaint.

10. Tardiffs typeset copy of the district court's order

omits the underscores which were inserted for emphasis.

il

B. Claim Preclusion Bars Tardiff's Section 1983 Claim

Regarding claim preclusion, the district court accurately

stated that Tardiff's section 1983 cause of action alleging

violation of his due process right to notice "is the same due

process right Tardiff litigated before the state courts as an

affirmative defense to the Director's lien enforcement action."

Appendix E, App. 32. The district court concluded that Tardiff

was mistaken in asserting that he could not have brought a

section 1983 claim in state court. Jd. Citing Clark v. Yosemite

Community College District, 785 F.2d 781 (1986), the district

court quoted from the Ninth Circuit's application of California

law, as follows, "'Although [Plaintiff] did not raise a section

1983 claim in the state proceeding, the doctrine of res judicata

applies not only to those claims actually litigated in the first

action but also to those which might have been litigated as part

of that cause of action." Appendix E, App. 32-33.

Tardiff asserts here that he did not raise section 1983 in

state court because he "felt that it was an inappropriate forum

to present such an issue." Petition, p. 6. Tardiff's excuse is

without merit. Section 1983 claims are heard in California's

courts, and he could have raised it. Clark, 785 F.2d, at 786;

Appendix E, App. 32-33. Plaintiff was not precluded in any

manner from fully and fairly litigating his due process and civil

rights claims in California's courts. Thus, claim preclusion bars

Tardiff's section 1983 claim.

As to issue and claim preclusion, Tardiff cites Jones v.

City of Alton, 757 F.2d 878 (1985) for the proposition that

"[wJhile the purpose of the doctrine is to prevent a party from

litigating the same issue twice, it should not be used to preclude

a party from litigating the matter at all." Petition, p. 7. Jones

held that federal claims and defenses are not precluded where

a plaintiff tried to raise them in state proceedings but they were

12

improperly excluded. However, as the district court's order

shows, Tardiff litigated notice and due process in the state

courts. He was not precluded from doing so, and he could have

litigated his section 1983 due process claim in state court.

Thus, Jones is inapposite.

Tardiff's section 1983 claim is the same due process right

he litigated and lost in state court, and it is barred by claim

preclusion.

C. The Rooker-Feldman Doctrine Bars Federal

Jurisdiction

The district court applied the Rooker-F eldman doctrine,

which provides that inferior courts lack subject matter

jurisdiction over cases that effectively seek review of state

court judgments. Appendix E, App. 34-35; Craig v. State Bar

of California, 141 F.3d 1353, 1354, n. 1 (1998). On this basis,

the district court found Tardiff’s claims barred because, in

essence, Tardiff was attempting to obtain appellate review to

effectively reverse the state court action or void its ruling.

Appendix E, App. 36-37.

Here, Tardiff cites Worldwide Church of God v. McNair,

805 F.2d 888 (1986) for the premise that res judicata and the

Rooker-Feldman doctrine are "inextricably intertwined," and

“the crux of the question is whether there has already been

actual consideration of a decision on the issue presented."

Petition, p. 11. This case does not assist Tardiff, as the district

court's order, which the Ninth Circuit reviewed de novo and

affirmed, shows that Tardiff ac.vially litigated notice and due

process in the state courts. See District of Columbia Court of

Appeals v. Feldman, 460 U.S. 462, 482-86 (1983); Rooker v.

Fidelity Trust Co., 263 U.S. 413, 415-16 (1923). The district

court ruled that "Tardiffs claims and prayers for relief are

13

inextricably intertwined with the state court's judgment" and

"are in essence an attempt by Tardiff to obtain appellate review

in this federal court of the state court's adjudication of the

underlying action." Appendix E, App. 36-37.

Tardiff cites Mullane v. Central Hanover Bank & Trust

Co., 339 U.S. 306 (1950) and Dusenbery v. United States, 534

U.S. 161 (2002) for the proposition that notice is a fundamental

requirement of due process. Petition, p. 12. These cases also

do not avoid the bar of res judicata and the Rooker-Feldman

doctrine since Tardiff was statutorily required to give notice to

the Director, not vice versa, and he failed to do so. In addition,

the district court's order affirmatively shows that Tardiff

received actual notice and an opportunity to litigate the

Director's action, and he fully availed himself of the

opportunity by raising notice and due process in defense.

California's courts considered and decided these issues, and

final judgment was entered against him. For these reasons, the

complaint is barred.

D. Review is Precluded by Res Judicata and the Rooker-

Feldman Doctrine

For all of these reasons, Tardiff's assertion that "[t]he issue

of due process was never actually litigated in the state courts as

that term is defined by Ninth Circuit Court of Appeals

decisions and by decisions of this [CJourt" is plainly wrong.

Petition, p. 5. The district court's well-reasoned order

demonstrates that Tardiff raised and actually litigated notice

and due process in California's courts, and he could have raised

and litigated his section 1983 due process claim. The Ninth

Circuit reviewed de novo, concluded that the matter had

actually been litigated, and rightly affirmed because district

courts may not exercise appellate jurisdiction over state courts.

Tardiff simply disagrees with the result. Nevertheless, Tardiff's

14

suit is barred by res judicata and the Rooker-Feldman doctrine.

Thus, the petition is properly denied.

CONCLUSION

Review must be denied because Tardiff's section 1983

action sought district court review of a res judicata state court

judgment, and a district court may not exercise appellate

jurisdiction over a state court decision.

Dated: July 10, 2002

Respectfully submitted,

BILL LOCKYER

Attorney General of the

State of California

JAMES M. HUMES

Senior Assistant Attorney General

JOHN H. SANDERS

Counsel for the California Department

of Health Services