The United States District Court for the District of New Jersey recently held that a post-foreclosure action alleging claims under the Real Estate Settlement Procedures Act (“RESPA”) and the Fair Debt Collection Practices Act (“FDCPA”) were not barred by the Rooker-Feldman or entire controversy doctrines, but that these claims nonetheless should be dismissed for failure to state a claim. See Mensah v. Manning, 2020 WL 91089 (D.N.J. Jan. 8, 2020). In 2009, a lender commenced a foreclosure action against plaintiff-borrower after plaintiff defaulted on her loan. In 2017, the state court entered a final judgment of foreclosure, and denied plaintiff’s motion to vacate and motion to stay the sheriff’s sale. In 2018, plaintiff brought this action, but the Court dismissed for lack of subject-matter jurisdiction and failure to state a claim. In 2019, plaintiff filed an amended complaint against the lender and any one else remotely involved in the mortgage or foreclosure, alleging claims of RESPA and the FDCPA, among other claims. The defendants again moved to dismiss the federal law claims.
The Court granted the motions to dismiss. First, the Court found that the Rooker-Feldman doctrine did not apply. Under the Rooker-Feldman doctrine, a federal court lacks subject-matter jurisdiction over “cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.” Here, the Court found that Rooker-Feldman did not apply because “[t]his injury is not one caused by the state-court judgment, but rather by alleged noncompliance with federal regulations under RESPA” and “alleged wrongful conduct in connection with the collection of debt.” Second, the Court found that New Jersey’s entire controversy doctrine did not apply to bar these claims because most of the defendants in this action were not parties in the foreclosure action, and the only overlapping party—the lender—failed to raise the doctrine in its motion to dismiss. Nonetheless, the Court dismissed the amended complaint for failure to comply with Rule 8(a). The Court found that “each count of the Amended Complaint refers to actions taken by ‘Defendant,’ ‘the Defendant’ or ‘Defendant(s)’ interchangeably, without specifying which named defendant or defendants undertook which action” and that “the Amended Complaint provides no other factual allegations of any acts specifically undertaken by any Defendant that would connect them to Plaintiff’s alleged injuries, much less that would give rise to a plausible claim for relief.” Accordingly, because the Court had previously given plaintiff the opportunity to amend, the Court dismissed the federal claims with prejudice, and dismissed the remaining state law claims without prejudice on jurisdictional grounds.