[00:00:00] Speaker 00: Good morning, Your Honors, and may it please the Court, William E. Trackman, for Appellant Christine Searle. [00:00:05] Speaker 00: Respectfully, I will try to reserve four minutes for rebuttal. [00:00:09] Speaker 00: A federal court ought to have something to say about the fact that Ms. [00:00:13] Speaker 00: Searle lost her home worth between $400,000 and $500,000 over a tax debt of around $1,600. [00:00:20] Speaker 00: After the Supreme Court's unanimous decision in Tyler v. Hennepin County, it's clear that tax debtors have a cause of action [00:00:29] Speaker 00: when they are denied the difference between their debt and the value of their property. [00:00:34] Speaker 00: And the Supreme Court's decision in the Nick case emphasizes that plaintiffs have a right to bring their federal takings cases in federal court. [00:00:43] Speaker 00: As the Arizona Attorney General acknowledged when it confessed error below, Ms. [00:00:47] Speaker 00: Searle was unconstitutionally deprived of her property when the difference between her debt and the value of her home was denied to her. [00:00:55] Speaker 00: That fact was so obvious that a bipartisan law has been enacted to ensure that Ms. [00:01:00] Speaker 00: Searle's facts never reoccur in Arizona. [00:01:04] Speaker 00: Unfortunately, before the law was changed, Ms. [00:01:07] Speaker 00: Searle's fate was shared by thousands of Arizonans who lost their livelihoods to real estate speculators. [00:01:14] Speaker 00: In this case, Treasurer Allen and the private defendants worked in concert to deprive Ms. [00:01:19] Speaker 01: Searle... The change in law was not retroactive, is that correct? [00:01:23] Speaker 00: That's absolutely correct, Your Honor. [00:01:25] Speaker 00: This is a change in law that occurred in April of 2024. [00:01:27] Speaker 00: Going forward. [00:01:29] Speaker 00: That's right. [00:01:30] Speaker 00: And so it didn't apply to Miss Searle because she lost her property. [00:01:33] Speaker 00: The Treasury was issued in February of 2022. [00:01:37] Speaker 00: Now, the change, if the appellees want to say that the change will apply to her prospectively because her house hasn't been sold yet, that's a different matter. [00:01:47] Speaker 00: But to date, they have not alleged [00:01:49] Speaker 00: that the change in law will apply to her or that it guarantees her. [00:01:52] Speaker 01: Let me just clarify one thing to make sure I understand your claim. [00:01:57] Speaker 01: Your claim has to do with the delta, correct, between what was necessary to pay off the tax debt and the cost and then the value that was left. [00:02:12] Speaker 01: And her loss of that added that delta value there. [00:02:18] Speaker 01: is what you're seeking to recover. [00:02:20] Speaker 01: Is that right? [00:02:21] Speaker 01: That's your takings claim. [00:02:23] Speaker 00: That's mostly correct, Your Honor. [00:02:24] Speaker 01: Why is it only mostly correct? [00:02:26] Speaker 00: Well, let's draw a line between the types of claims that Your Honor is referencing by our just compensation claim, our excessive fines claim, and our unjust enrichment claim. [00:02:36] Speaker 00: Those do seek merely the delta between the tax debt and the value of the house. [00:02:41] Speaker 00: So yes, the answer is mostly correct. [00:02:44] Speaker 00: We also have a claim below for a private use taking [00:02:47] Speaker 00: in the sense that Maricopa County gave Ms. [00:02:50] Speaker 00: Searle's house to the private appellees. [00:02:52] Speaker 00: That claim is separate and apart from the just compensation claim. [00:02:55] Speaker 00: Ms. [00:02:55] Speaker 00: Searle would prefer to have her house back, anyone would, but she is content to rely on this. [00:03:01] Speaker 05: Go ahead. [00:03:03] Speaker 05: The judgment of the state court says that she no longer has title to the house and that's been transferred by the state court judgment. [00:03:13] Speaker 05: That's right. [00:03:14] Speaker 05: So an order from this court that says she gets to keep the house would be setting aside the state court judgment, would it not? [00:03:22] Speaker 00: It would not, Your Honor. [00:03:23] Speaker 00: So the best case for us on this is the Skinner case, which is a 2011 Supreme Court case that says just because a federal court ruling would be intention with a legal conclusion reached by a state court. [00:03:35] Speaker 05: It's not intention with a legal conclusion. [00:03:37] Speaker 05: It's directly contrary to the actual relief that's been ordered, right? [00:03:41] Speaker 05: You have one judgment that says, [00:03:43] Speaker 05: The house no longer belongs to her. [00:03:45] Speaker 05: And then another judgment that would say, she keeps the house. [00:03:48] Speaker 00: Well, that might be an incidental effect of a facial challenge. [00:03:51] Speaker 00: But those were Skinner's facts. [00:03:52] Speaker 00: Skinner was a prisoner. [00:03:53] Speaker 00: He sought DNA testing in Texas state court. [00:03:57] Speaker 00: The state court there denied him the right to DNA testing. [00:04:00] Speaker 00: Then he brought out a 1983 claim in federal court, challenging the DNA testing regime. [00:04:05] Speaker 00: And the Supreme Court Justice Ginsburg said, there's no Rooker Feldman problem there. [00:04:10] Speaker 00: The fact that you have an independent claim under 1983 [00:04:13] Speaker 00: that may incidentally lead to a result that is in tension with the previous state court ruling is not a bar to the federal court. [00:04:19] Speaker 05: In what sense is it incidental? [00:04:22] Speaker 05: Insofar as this action involves, it involves title to a specific piece of property and you have one judgment that says one person has the title and now there's going to be another judgment that says no, somebody else does. [00:04:38] Speaker 05: How is that incidental? [00:04:41] Speaker 00: So let me process by saying we're drawing the line between the three claims on the one right now. [00:04:46] Speaker 00: I understand that. [00:04:47] Speaker 00: So a facial challenge is different than the cases where someone goes to federal court, walks across the street after getting a negative state court judgment and says the state court made an error. [00:04:59] Speaker 00: The state court did something wrong with the facts or the law here. [00:05:02] Speaker 00: We aren't saying anything of the sort. [00:05:03] Speaker 00: So the superior court in Maricopa County [00:05:06] Speaker 00: accurately applied Arizona law. [00:05:08] Speaker 00: They made no error of fact. [00:05:09] Speaker 00: They made no error of law. [00:05:10] Speaker 00: There is no de facto appeal. [00:05:12] Speaker 00: What Ms. [00:05:12] Speaker 00: Searle is bringing now is a facial challenge to the statute that says, as part of your foreclosure process, we give away your house to a private party. [00:05:22] Speaker 05: So if it's a facial challenge, it seems like then the judgment that you'll get from the federal court if you win the facial challenge is not about her house. [00:05:32] Speaker 05: It's just a declaration that, in general, [00:05:34] Speaker 05: The statute is unconstitutional, is that right? [00:05:37] Speaker 00: Absolutely, we would be satisfied. [00:05:38] Speaker 05: Okay, but then how do you, how is that not moot? [00:05:41] Speaker 00: Well, the statute's been changed on a going forward basis, but Ms. [00:05:44] Speaker 00: Searle hasn't lost her home yet. [00:05:46] Speaker 00: She still possesses it. [00:05:47] Speaker 00: She could be evicted tomorrow if this court affirms. [00:05:50] Speaker 00: Her house hasn't been sold yet. [00:05:51] Speaker 05: But not on the basis of the statute. [00:05:54] Speaker 05: The basis of a judgment that has already been entered, but the statute's not going to be applied to anybody going forward because it's been amended. [00:06:01] Speaker 00: Well, if the appellees want to stand up here and say that they plan to apply the new statute to Ms. [00:06:05] Speaker 00: Searle's facts, that's a difference. [00:06:07] Speaker 00: But for the time being, our understanding is that the appellees are going to go by the old statute and say, you've lost your right to your home, you've lost the right to the Delta, and we're about to take it over. [00:06:18] Speaker 00: They've given her an eviction letter saying that you are going to be gone by the... But that's not because of the statute. [00:06:24] Speaker 05: That's because they have a state court judgment that says that [00:06:28] Speaker 05: They now have the house, right? [00:06:29] Speaker 05: They don't need the statute anymore now that there's a judgment. [00:06:32] Speaker 00: Well, respectfully, Your Honor, that's not quite right. [00:06:34] Speaker 00: So the judgment doesn't give you the right to possess or take ownership of the house. [00:06:39] Speaker 00: You take the judgment, you go pay a fee, you do some paperwork, you ask the treasurer, can I have Ms. [00:06:45] Speaker 00: Searle's house? [00:06:46] Speaker 00: And then it's the statute that gives the county the ability to say, yes, we've looked at your paperwork, you've paid the right fees and filled out the right forms, and that's why we're giving you the house. [00:06:55] Speaker 00: That all happened and is about to consummate under the old statute. [00:07:00] Speaker 01: Let me just step it back just a little bit, so I make sure I understand the procedural process. [00:07:06] Speaker 01: So she didn't pay her taxes for whatever reason, right? [00:07:09] Speaker 01: There's a lien on the property. [00:07:11] Speaker 00: That's correct, Your Honor. [00:07:12] Speaker 01: And the county says, okay, we want our taxes, so we're going to foreclose on that lien. [00:07:16] Speaker 00: That's correct, your honor. [00:07:17] Speaker 01: Right. [00:07:18] Speaker 01: So they file an action to foreclose on the lien? [00:07:20] Speaker 01: Is that what happens? [00:07:21] Speaker 00: So not quite. [00:07:21] Speaker 00: The county doesn't do that. [00:07:23] Speaker 00: They auction off the right to do that to private parties. [00:07:25] Speaker 00: Oh, I see. [00:07:25] Speaker 01: They auction off the right of foreclosure. [00:07:28] Speaker 01: And that's under the tax scheme, the property tax scheme. [00:07:33] Speaker 00: Is that right? [00:07:33] Speaker 01: That's right, your honor. [00:07:35] Speaker 01: So they auctioned off the right to foreclose. [00:07:39] Speaker 01: And how much did the county get for that? [00:07:41] Speaker 00: The county got the $1,600. [00:07:43] Speaker 01: the value of the the value of it what it was that yes that's right that the tax okay so then it gets auctioned off and that was auctioned off to what's the name of the who who bought it at the Arapahoe your honor one of the private appellees okay so Arapahoe then gets the right to foreclose that's correct so then they proceed to the foreclosure proceedings right and they get a judgment of foreclosure that's correct your honor terminating whatever rights she has [00:08:12] Speaker 00: Well, the judgment does say Miss Searle loses right title and interest to the property. [00:08:17] Speaker 01: Okay. [00:08:18] Speaker 01: And then they have the right, Arapahoe, wherever it is, then has the right to take possession of the property and to sell it. [00:08:29] Speaker 00: So the record's a little bit unclear on this. [00:08:30] Speaker 00: The county says that Miss Searle has the right to redeem even after that judgment has occurred. [00:08:36] Speaker 00: It's not totally clear under Arizona law whether that's true or not. [00:08:39] Speaker 00: But the answer to your question ultimately is yes. [00:08:42] Speaker 00: Arapahoe has the right to go to the county treasurer and say, we would like a treasurer's deed. [00:08:46] Speaker 00: We've succeeded at obtaining a judgment. [00:08:49] Speaker 00: Let's move forward here. [00:08:50] Speaker 01: OK, so then they get the deed. [00:08:51] Speaker 00: Yes. [00:08:52] Speaker 01: And then that gives them the right to evict her. [00:08:54] Speaker 00: That's correct. [00:08:55] Speaker 01: And then they can sell the property for whatever market value they can get. [00:08:58] Speaker 00: That's absolutely right. [00:09:00] Speaker 00: Under the Arizona statute at play here, they can then go ahead and sell the property. [00:09:03] Speaker 01: And she's then deprived. [00:09:05] Speaker 01: of that delta value. [00:09:07] Speaker 00: Right, so our claim is pleaded as the sense that she's already being deprived because she's lost ownership of the home. [00:09:12] Speaker 00: Yes, I understand. [00:09:13] Speaker 00: But in Tyler, yes, there was an auction, there was a delta, and then the government denied the point of the delta. [00:09:20] Speaker 01: But I know, you know, I think ultimately for her to get her house back, we would have to say that there's something wrong with the foreclosure process, and that just doesn't seem correct. [00:09:31] Speaker 00: Well, I don't think so, Your Honor. [00:09:32] Speaker 00: Again, this goes to my answers to Judge Miller. [00:09:34] Speaker 00: And maybe you're not buying my argument. [00:09:37] Speaker 00: But she's still in the House. [00:09:38] Speaker 00: She could be evicted tomorrow. [00:09:40] Speaker 00: She could obtain a declaration or nominal damages or something related to the previous statute that would then be prospective relief related to the fact that the old statute is interacting with her facts and preventing her from exercising her full bundle of property rights. [00:09:54] Speaker 00: We think that is something that isn't moot. [00:09:56] Speaker 00: Again, the standard for mootness, which is raised for the first time on appeal, it's the burden of the person pleading mootness to come here and demonstrate absolute certainty on mootness, is can the court issue an order with real world effect? [00:10:10] Speaker 00: And we think that this court absolutely can. [00:10:12] Speaker 00: And the second is the voluntary cessation doctrine, which has the harm been entirely eradicated from the previous statute. [00:10:19] Speaker 00: Well, she's seeking damages, right? [00:10:22] Speaker 00: Well, she's seeking dollars from the [00:10:24] Speaker 00: the surplus equity, we frame that as equitable relief that comes from the fact that the Constitution was violated and that she hasn't gotten the dollars from the just compensation right. [00:10:34] Speaker 00: Yes, sir. [00:10:34] Speaker 00: But that part of the case is still alive and well. [00:10:37] Speaker 00: Well, we'd love to have you put that in writing, Your Honor. [00:10:40] Speaker 00: So yes, we think, again, if you divide that line down the middle, which some courts like the Second Circuit endorsed did, and say you can always seek the surplus value. [00:10:48] Speaker 00: You can go back and bring an unjust enrichment claim or a takings claim for that. [00:10:51] Speaker 00: but you can't seek the property back. [00:10:53] Speaker 00: We understand if that's where this court draws the line, but we think that Skinner doesn't force it to. [00:10:58] Speaker 03: We think that Skinner... Skinner only applies to your facial challenge to the scheme, correct? [00:11:05] Speaker 03: That's correct, Your Honor. [00:11:06] Speaker 03: And just to be clear, and I think you've said this, you're not claiming any defect in the procedure used in the foreclosure? [00:11:13] Speaker 03: Never, Your Honor, and that's... So that's where you get into the Rooker-Felman problem, is that ultimately, [00:11:19] Speaker 03: You're challenging that judgment. [00:11:23] Speaker 00: Respectfully, no, Your Honor. [00:11:24] Speaker 00: I was with you until the last point, which is we aren't alleging any defect in that state court. [00:11:29] Speaker 00: Well, I thought I understood you correctly on that. [00:11:30] Speaker 00: And so under Skinner and under this court's decision in Boise v. Bell, there's no de facto appeal. [00:11:35] Speaker 00: That's the end of the inquiry. [00:11:36] Speaker 00: If the state court got it right and were only challenging the actions of the private parties in the county, and at most the state court ratified what those parties did, there's no Rooker Feldman problem. [00:11:46] Speaker 00: With that, I'll try to reserve the rest of my time. [00:11:55] Speaker 05: Mr. Moore. [00:12:03] Speaker 02: Thank you, Your Honor, and good morning. [00:12:05] Speaker 02: My name is Sean Moore. [00:12:06] Speaker 02: I'm with the Maricopa County Attorney's Office and I represent the Maricopa County Defendants. [00:12:10] Speaker 02: As a programming note, my plan is to quickly run through our one sort of unique Rooker Feldman argument and then yield the lion's share of the time to our co-defendants to address the broader Rooker Feldman issues. [00:12:21] Speaker 02: Our argument, I think, is very straightforward. [00:12:23] Speaker 02: Plaintiffs basically didn't address it at all. [00:12:25] Speaker 02: So I hope to go through this pretty quickly. [00:12:26] Speaker 02: But first, one quick head note to clarify something. [00:12:29] Speaker 02: It's not that the treasurer sells the right to foreclose. [00:12:33] Speaker 02: Rather, the treasurer sells the lien. [00:12:35] Speaker 02: And then three years after the treasurer sells the tax lien, then the private purchaser has the right to foreclose. [00:12:40] Speaker 02: That's how the system works, Your Honor. [00:12:45] Speaker 02: OK, got it. [00:12:46] Speaker 02: But that hasn't happened in this case. [00:12:48] Speaker 02: That has happened in this case, Your Honor. [00:12:50] Speaker 02: What happened here, there are two things that the Maricopa County defendants were alleged to have done. [00:12:54] Speaker 02: One, sell the tax lien, and two, years later, once the private defendants had acquired a state court judgment ordering the Maricopa County defendants to tender that tax lien to the private defendants, they did so. [00:13:07] Speaker 02: The plaintiffs have been very clear that they [00:13:11] Speaker 02: that all their claims, the only thing they think the Maricopa County defendants did that was wrongful was giving the title of the property to the private defendants, right, to the private appellees. [00:13:24] Speaker 02: And that's where plaintiff runs into their Roker-Feldman problem is because the only reason the Maricopa County defendants actually tendered the deed of the subject property to the private defendants is because they were specifically ordered to do so in the state court foreclosure judgment. [00:13:39] Speaker 02: And therefore, to grant relief against the Maricopa County defendants as they want you to do, the federal court would necessarily have to say that the state court judgment was wrongful in ordering the Maricopa County defendants to do exactly that. [00:13:53] Speaker 02: It's a de facto appeal because they're saying what you did in ordering the Maricopa County treasurer to tender that deed was wrongful. [00:14:01] Speaker 05: Now, plaintiff doesn't- If we focus on the claims that are for unjust enrichment or damages, I don't see how that's necessarily inconsistent with execution of the judgment of the state court. [00:14:19] Speaker 02: Right. [00:14:21] Speaker 02: That's how plaintiff tries to get around this. [00:14:22] Speaker 02: She says, all right, we're not attacking the judgment which says that the private defendants get the property. [00:14:27] Speaker 02: We're saying that the [00:14:29] Speaker 02: that the damages come from the private defendants actually holding that property. [00:14:32] Speaker 02: But those allegations don't apply to the Maricopa County defendants at all, right? [00:14:37] Speaker 02: In order to have those claims, the whole basis of those claims is that the defendants improperly withheld monies or property that properly should have gone to the plaintiff. [00:14:46] Speaker 02: But the specific allegations in this case is that Maricopa County gave those things to someone else. [00:14:51] Speaker 02: The specific allegation is that pursuant to the state court judgment, they took the title and gave it to the private defendant. [00:14:58] Speaker 05: But isn't that just a feature of the what the substantive rule of constitutional law that they're invoking here that the rule of Tyler is that you can take their property and give it to someone else. [00:15:11] Speaker 05: You just have to pay them. [00:15:13] Speaker 05: The excess of what over what they owe right? [00:15:16] Speaker 05: No, that's the rule of Tyler, isn't it? [00:15:18] Speaker 02: No time what Tyler said was if the government takes the government cannot take more than what it was owed basically and in this case the only thing Maricopa County received was the $1,600 and [00:15:30] Speaker 02: from the private defendants. [00:15:31] Speaker 02: It received absolutely nothing from plaintiff whatsoever. [00:15:34] Speaker 01: You had a hand in taking the property. [00:15:36] Speaker 02: It's the county that recorded the lien at the beginning. [00:15:41] Speaker 02: The county did record the lien and then it sold the lien. [00:15:44] Speaker 01: Each defendant was involved in the alleged taking. [00:15:52] Speaker 02: Disagree your honor we did not institute or we did not institute the foreclosure proceedings the only thing we did after the foreclosure proceedings was tender they couldn't have once we were Let me ask you this, could they have initiated foreclosure proceedings? [00:16:04] Speaker 01: Could we have? [00:16:05] Speaker 01: Could they? [00:16:05] Speaker 01: Could they did? [00:16:08] Speaker 01: Without that lien. [00:16:09] Speaker 01: Oh, I should rephrase that could they have initiated the lien? [00:16:13] Speaker 02: Uh, no. [00:16:15] Speaker 02: I mean, they have to own the lien in order to foreclose on it. [00:16:18] Speaker 02: But the baseline... The county owned the lien. [00:16:21] Speaker 02: The county owned the lien. [00:16:22] Speaker 02: But no one's saying that it was wrongful for the county to sell the lien. [00:16:25] Speaker 01: No. [00:16:25] Speaker 01: That's a standard financial transaction... Her claim is, as I understand it, is clearly a Tyler claim. [00:16:33] Speaker 02: I understand that it's under Tyler. [00:16:36] Speaker 02: Our point is that under Rooker Feldman, if you want to challenge what the state court judgment said and what the state court judgment said is you county have to tender the deed [00:16:44] Speaker 02: to the private defendants. [00:16:46] Speaker 02: If you want to challenge that, you have to bring that challenge within the court where the judgment was issued. [00:16:51] Speaker 02: And that's the whole point of Rooker Feldman. [00:16:53] Speaker 02: You cannot do a de facto appeal of the state court judgment here in federal court. [00:16:57] Speaker 02: And so while we agree that she may have a Tyler claim, that claim cannot be brought in this court. [00:17:02] Speaker 02: It has to be brought within the state court. [00:17:04] Speaker 02: And that's the point of Rooker Feldman. [00:17:05] Speaker 02: I'm happy to answer any other questions you may have. [00:17:07] Speaker 02: But I said I would reserve at least 10 minutes for our code of defense. [00:17:10] Speaker 03: Could you clarify one point for me? [00:17:11] Speaker 03: I'm not sure that I understood it. [00:17:12] Speaker 03: There was an illusion in your colleague's argument that she still had a right to redeem. [00:17:20] Speaker 03: Do you agree with that? [00:17:22] Speaker 02: I do not agree, Your Honor. [00:17:23] Speaker 02: I believe that the state court judgment pretty solidly forecloses on any interest she has in the property. [00:17:27] Speaker 03: The position is that her rights have been extinguished. [00:17:29] Speaker 03: By the state court judgment, yes. [00:17:31] Speaker 03: All right. [00:17:32] Speaker 03: Thank you. [00:17:33] Speaker 03: Thank you. [00:17:33] Speaker 02: Thank you. [00:17:43] Speaker 04: Good morning, Your Honors. [00:17:45] Speaker 04: John Lohr on behalf of Arapaho LLC and American Pride. [00:17:50] Speaker 04: If it pleases the Court, we respectfully request that the Court affirm the District Court's dismissal of the appellant's claims on the Rooker-Feldman doctrine. [00:18:00] Speaker 04: One thing I would like to clarify right in the very beginning, Tyler does not ensure that a former owner [00:18:06] Speaker 04: is compensated under the taking claims. [00:18:09] Speaker 04: All that Tyler says in all the cases that deal with tax deed foreclosures says that they have to have an opportunity to make that claim. [00:18:18] Speaker 04: Well, that claim and that opportunity was in the first, actually the second, second state court case where we actually foreclosed the property. [00:18:28] Speaker 04: That was the time for her to make the claim. [00:18:31] Speaker 04: And let's look at this a little bit. [00:18:34] Speaker 04: Unfortunately, the appellant played Russian roulette, literally, with Arizona's tax lien foreclosure laws. [00:18:40] Speaker 04: Over a period of 10 years, she was sued five times, five times for three other tax lien investors and then twice by my client. [00:18:49] Speaker 04: The first three times in 2010, 2015, and 2019, she redeemed the tax liens during the litigation, got a judgment for fees and costs against her, and then basically gave the finger to the investor. [00:19:02] Speaker 04: She refused to pay the fees and costs, most likely because she had a homestead exemption, so she didn't want to pay the fees and costs. [00:19:09] Speaker 04: But then my client comes up, and we say, OK, and let me give you a little bit of the background of the procedure here. [00:19:16] Speaker 04: We first send an initial notice to tell them [00:19:19] Speaker 04: Before we even file a lawsuit, your rights are about to be foreclosed. [00:19:23] Speaker 04: So we called a 30-day notice. [00:19:25] Speaker 04: So we send this notice. [00:19:27] Speaker 04: We sent it to the property. [00:19:29] Speaker 04: She got the notice. [00:19:30] Speaker 04: She didn't do anything. [00:19:31] Speaker 04: We then filed the foreclosure lawsuit. [00:19:34] Speaker 04: Then, during the middle of the foreclosure lawsuit, her son came in. [00:19:38] Speaker 04: They paid the property taxes on the first lawsuit. [00:19:40] Speaker 04: Okay. [00:19:41] Speaker 04: We then get a judgment. [00:19:42] Speaker 04: There is an email in the record that shows that I communicated with her son and said, okay, we need you to pay the fees and costs on this judgment for the first foreclosure. [00:19:53] Speaker 04: And by the way, we have another foreclosure coming up on the 2017 lien. [00:19:57] Speaker 04: Okay. [00:19:58] Speaker 04: We need you to pay that so we don't have to go through this again. [00:20:00] Speaker 05: But much of the same thing was true in Tyler, in the sense that there the foreclosure was a state court judgment that extinguished Tyler's rights to the property. [00:20:14] Speaker 05: And then she went to federal court seeking the damage for the difference, the excess over the tax liability. [00:20:23] Speaker 05: And so I'm struggling to see, on your theory it seems like Tyler against Hennepin County, the federal case, should have been barred by Rooker Feldman. [00:20:32] Speaker 05: And do you think that's right? [00:20:35] Speaker 05: I mean, is it just that nobody at the Supreme Court noticed that? [00:20:39] Speaker 04: No, Your Honor, the Tyler case is completely different. [00:20:41] Speaker 04: First of all, they didn't do a Rooker-Feldman analysis in that case. [00:20:45] Speaker 05: I know, but shouldn't they have on your theory? [00:20:48] Speaker 04: Well, let's look at what happened in that case. [00:20:51] Speaker 04: First of all, I'd really like to say Christine Surley is no Geraldine Tyler. [00:20:56] Speaker 04: Geraldine Tyler did not have the financial ability to pay her property taxes, OK? [00:21:01] Speaker 04: And the way that the tax deeds statute in that state works is they [00:21:06] Speaker 04: they don't there's not a foreclosure process they get it they apply for a treasurer's deed and that's that's what happened we have a completely different factual scenario here again we have a defendant that played Russian roulette with the tax lien system and she was not a person that did not have the means [00:21:24] Speaker 05: I think that is maybe relevant to the merits of the Tyler claim, but I don't understand what it has to do with the Rooker-Feldman analysis. [00:21:34] Speaker 04: Right. [00:21:35] Speaker 04: Because the idea is if you're going to have a claim, the time to initiate that claim was in the foreclosure process. [00:21:45] Speaker 01: So when we initiated the second foreclosure lawsuit... You have to raise a takings claim within the foreclosure process. [00:21:51] Speaker 04: Right, right. [00:21:51] Speaker 04: You either have to do two things. [00:21:52] Speaker 01: In case you rely on that says that. [00:21:54] Speaker 04: Well, Your Honor, it's all of the cases. [00:21:58] Speaker 01: Give me one where you're saying, Judge, you need to read this case and you'll understand why they must raise this claim within the foreclosure proceeding. [00:22:10] Speaker 04: Sure. [00:22:11] Speaker 04: There's a couple. [00:22:11] Speaker 04: And in fact, one just came out just three weeks ago. [00:22:14] Speaker 04: Howard versus Macomb County, Michigan. [00:22:17] Speaker 04: It's a Westlaw site. [00:22:18] Speaker 04: Westlaw 941511. [00:22:20] Speaker 01: In that case... That was in Michigan. [00:22:23] Speaker 04: Right. [00:22:24] Speaker 04: Well, it's a Sixth Circuit case, but it arose out of Michigan. [00:22:27] Speaker 04: But in that case, that's exactly what happened. [00:22:31] Speaker 04: She had the opportunity to raise the takings claims, they didn't raise it, and the case was dismissed. [00:22:37] Speaker 04: And that's what's going on here. [00:22:39] Speaker 04: She had the opportunity to do two things in our foreclosure lawsuit. [00:22:43] Speaker 04: She could have either redeemed the taxes or defend... If she didn't have the ability to pay the taxes, she could have defended herself [00:22:49] Speaker 04: and said, oh, well, I think we have a takings claim here, and I think your statutes are unconstitutional. [00:22:56] Speaker 04: That's not what happened. [00:22:57] Speaker 04: She got notice of the lawsuit. [00:22:58] Speaker 04: She was personally served. [00:23:00] Speaker 04: She was served with an application for entry of default, which, by the way, Arizona's, we give defendants an extra opportunity, an extra due process, unlike the federal rule, where you just file a motion for default. [00:23:12] Speaker 04: We file an application for default first. [00:23:14] Speaker 04: It gives the person 10 more days to file an answer. [00:23:16] Speaker 04: She still didn't file an answer. [00:23:18] Speaker 04: We got a motion for default. [00:23:19] Speaker 04: We had a default hearing. [00:23:20] Speaker 04: She doesn't show up for the default hearing. [00:23:22] Speaker 04: And then we get the foreclosure judgment right here, get the judgment, which forecloses her interest in the property. [00:23:29] Speaker 04: It did order the treasurer to order the treasurer's deed. [00:23:32] Speaker 04: And here's the key terminology right here. [00:23:35] Speaker 04: It just further ordered a judge and decreed that defendants, defendants' heirs, agents, [00:23:40] Speaker 04: and assigns are hereby foreclosed and have no further legal, equitable right, title, or interest in the property, whether subject to the right of appeal and stay of execution as in any other civil actions." [00:23:52] Speaker 04: I mean, it's right there in black and white. [00:23:53] Speaker 04: Her property was foreclosed. [00:23:56] Speaker 04: Her equitable interest was foreclosed. [00:23:57] Speaker 04: Her title interest was foreclosed. [00:24:00] Speaker 04: Any claim to excess proceeds... And her right to bring a takings claim was foreclosed. [00:24:03] Speaker 04: Right. [00:24:03] Speaker 04: It disappeared right here. [00:24:05] Speaker 04: And three months later, after we get this judgment, once we start the eviction proceedings, [00:24:10] Speaker 04: then her, not counsel here, but her prior attorneys, they file a motion to set aside. [00:24:16] Speaker 04: And what did they argue in that case? [00:24:17] Speaker 04: Did they say, hey, we've got a counterclaim here, we've got to take these claims? [00:24:21] Speaker 04: No. [00:24:21] Speaker 04: They said, well, despite the fact that you have an email, despite the fact that you personally served us, despite the fact that you filed an application for default and gave that to us, we didn't get notice. [00:24:33] Speaker 04: What are you talking about? [00:24:34] Speaker 04: You did get notice. [00:24:36] Speaker 04: You ignored it. [00:24:36] Speaker 04: You intentionally chose to ignore it. [00:24:38] Speaker 04: And that's why I say she played Russian roulette with the tax lien system. [00:24:42] Speaker 04: She was sued four other times. [00:24:44] Speaker 04: She paid the tax liens off. [00:24:46] Speaker 04: She thumbed her nose to the investors and didn't pay the fees and cost judgment. [00:24:49] Speaker 04: And then the fifth time, it caught up with her. [00:24:52] Speaker 04: And again, this is not a Geraldine Tyler case who didn't have the [00:24:56] Speaker 04: wherewithal, and the means to pay the taxes. [00:24:59] Speaker 04: This owner had the ability. [00:25:02] Speaker 04: She just chose not to. [00:25:03] Speaker 04: She's more like the sovereign citizen who thumbs her nose at the government. [00:25:07] Speaker 04: That's what we have here, not Geraldine Tyler. [00:25:11] Speaker 03: I mean, the way you've posited this, your argument basically is that she needed to file a takings claim before there was a taking. [00:25:19] Speaker 03: No, she needed to defend herself with it. [00:25:21] Speaker 03: Well, no, she could have counterclaimed there, but I mean, there was no actual taking until the judgment, right? [00:25:29] Speaker 03: No, it was... What was taken from her before the judgment? [00:25:33] Speaker 04: Well, she had a lien on her property, and so she could have challenged... The whole thing, if she's challenging the lien, that would have been the time in this lawsuit. [00:25:41] Speaker 04: I mean, that's what the whole Rucker-Feldman doctrine prevents. [00:25:45] Speaker 04: We have to respect the committee, [00:25:48] Speaker 04: and the full faith and credit clause of the United States Constitution. [00:25:51] Speaker 04: You have to respect the state law judgment. [00:25:54] Speaker 04: Allowing her to bring this separate federal case on claims that should have been brought in this original lawsuit violate that. [00:26:04] Speaker 04: I only have a few minutes left. [00:26:06] Speaker 04: I'd like to touch on mootness real quick. [00:26:08] Speaker 04: So they did talk about mootness real quick. [00:26:10] Speaker 04: Just generally, the law has been changed. [00:26:13] Speaker 04: I actually helped participate in changing the law along with the treasurer who's sitting here in the audience. [00:26:17] Speaker 04: Now, this won't happen again. [00:26:20] Speaker 04: These types of situations won't happen again. [00:26:23] Speaker 04: But there's two aspects to the mootness that I think are very important. [00:26:27] Speaker 04: We recently filed a motion to supplement the record. [00:26:30] Speaker 04: Not only do we have mootness on the constitutional claims just in general, but the specific case is now moot. [00:26:38] Speaker 04: She filed, because of the district court's ruling where it said, well, we don't think you have a case, but if you do, it's in state court. [00:26:45] Speaker 04: She filed last year a third lawsuit, or I guess a fourth lawsuit, a fourth lawsuit, the second lawsuit against my clients. [00:26:54] Speaker 04: And she alleged the nearly identical claims from the federal case and the state court case. [00:26:59] Speaker 04: We filed a motion to dismiss. [00:27:01] Speaker 04: They filed a response. [00:27:02] Speaker 04: We filed a reply. [00:27:04] Speaker 04: And just a few weeks ago, the Superior Court entered a minute entry order that said, [00:27:11] Speaker 04: The motion to dismiss, which by the way, we asked for a motion to dismiss with prejudice, all of these claims. [00:27:18] Speaker 04: The court granted the motion to dismiss. [00:27:21] Speaker 04: That's what the elementary order says. [00:27:22] Speaker 04: It says we grant the motion to dismiss. [00:27:24] Speaker 04: The only way that that order can be read and interpreted is that it dismissed these claims with prejudice. [00:27:30] Speaker 04: So just generally, we're dealing with mootness here and specifically with the actual claims, those are moot too. [00:27:40] Speaker 04: And at this time, Your Honor, we respectfully request that, again, unless you have any other questions, the order of the district court be reaffirmed. [00:27:50] Speaker 01: Thank you. [00:27:51] Speaker 01: I just have one question of kind of side note interest. [00:27:55] Speaker 01: What's the value of the property that we're talking about? [00:27:58] Speaker 04: That is a very good question and I don't think the evidence was ever really truly presented. [00:28:03] Speaker 04: If you look at the, my client, the actual lien that was foreclosed, it was only 1600, but my client, [00:28:09] Speaker 04: had all the other liens in the property, which was about $14,000. [00:28:12] Speaker 04: And, of course, that accumulates interest. [00:28:16] Speaker 04: My client also bought an assignment of a deed of trust of an attorney who represented Surly at one time, and apparently she didn't pay. [00:28:23] Speaker 04: So that's about $24,000 plus interest. [00:28:26] Speaker 04: My client also bought a $14,000 HOA lien. [00:28:30] Speaker 04: We also paid another about $10,000 in taxes. [00:28:35] Speaker 04: The property itself is dilapidated and needs work. [00:28:39] Speaker 04: And so, you know, we don't really know what the value is. [00:28:42] Speaker 04: I mean, you can go on Zillow, you can go on Redfin, and generally figure it out, but there's a lot of debt to it. [00:28:48] Speaker 04: And that's another thing I'd like to raise about mootness. [00:28:52] Speaker 04: Since we hold the deed of trust, we could turn around and foreclose the property that way too. [00:28:56] Speaker 04: So ultimately, the claims go away no matter how you slice it. [00:29:00] Speaker 04: So thank you, Your Honors. [00:29:02] Speaker 05: Thank you. [00:29:05] Speaker 05: Rebuttal. [00:29:13] Speaker 00: Thank you, Your Honor. [00:29:14] Speaker 00: Many of my friends' arguments don't go to the Rooker Feldman doctrine. [00:29:17] Speaker 00: They go to, I suppose, some unclean hands defense that hasn't been raised below and isn't before this Court now. [00:29:24] Speaker 00: I will mention that page 221 of the attempted supplemental record does contain a quote from Maricopa County saying, the taxpayer may redeem at any time up until [00:29:35] Speaker 00: a treasurer's deed is issued. [00:29:36] Speaker 00: So there is some tension again between what Maricopa says and what the private appellees say about that interim period between the judgment and when the treasurer's deed is issued. [00:29:45] Speaker 00: But all that set aside, think about what the injury is in Tyler. [00:29:50] Speaker 00: Geraldine Tyler lost her property, just like Ms. [00:29:53] Speaker 00: Searle in the judgment lost her property. [00:29:55] Speaker 00: That is not the taking. [00:29:56] Speaker 00: The taking is the extra money that isn't going to the debt. [00:30:01] Speaker 00: So Geraldine Tyler owed $15,000, [00:30:04] Speaker 00: Her house was auctioned off for $40,000. [00:30:07] Speaker 00: The $25,000 that Hennepin County retained was the taking. [00:30:12] Speaker 00: Geraldine Tyler was entitled to that $25,000, or the just compensation for it, which is the same value, because the county retained it. [00:30:20] Speaker 00: Here, there's a shell game going on. [00:30:22] Speaker 00: The private appellees say, you can't hold us accountable because we didn't actually do the taking. [00:30:27] Speaker 00: We're not the government. [00:30:28] Speaker 00: Maricopa, as you just heard today, says, we didn't really do anything either. [00:30:32] Speaker 00: All we did was tell the private appellees that they could go ahead and take the house that I would let the district court figure out Who's liable we say in a summers v. Thai situation where two people are pointing fingers at each other let them fight that out for a Rooker-felden analysis though It's entirely irrelevant what we know is that a minimum miss Searle has a house We plead that its value is somewhere between four hundred and five hundred thousand dollars There is no way that all of these debts that my friend just mentioned get anywhere near them [00:30:59] Speaker 00: And as the court said in Tyler, that is a classic pocketbook injury that gives her standing to bring these claims. [00:31:05] Speaker 00: Now, we would love for the court to reverse on all counts. [00:31:08] Speaker 00: We think that she ought to be able to bring her private use facial challenge to the taking at issue. [00:31:13] Speaker 00: But at a minimum, the court ought to say, try to bring your challenge for just compensation, the fact that there was an excessive fine and unjust enrichment. [00:31:23] Speaker 00: Those are things that the court below held were squarely contradictory to the judgment below. [00:31:29] Speaker 00: But that's true in any eminent domain case. [00:31:32] Speaker 00: If someone takes my house because there's an airport that's going to be built, there's a judgment depriving me of my house. [00:31:38] Speaker 00: That doesn't mean that I had to bring a just compensation claim in the middle of the foreclosure process. [00:31:43] Speaker 00: It means now I have a right to bring my 1983 claim in federal court saying I'm entitled to the value of my home. [00:31:51] Speaker 00: Their theory, I think, would apply in many more cases than Tyler-type scenarios. [00:31:57] Speaker 00: You can imagine any case where eminent domain occurs or there's some inverse condemnation. [00:32:02] Speaker 00: And their theory would say you have to bring your just compensation claim before the actual judgment depriving you of your property. [00:32:09] Speaker 00: You would have to say in superior court, you know what, you shouldn't do this condemnation because it's going to be a lot of money for you and I'm going to be entitled to that. [00:32:17] Speaker 00: That's not a defense. [00:32:18] Speaker 00: As your honor points out, that's not even right to say my defense to the taking is that there will be a just compensation remedy at the end of the day. [00:32:25] Speaker 00: For those reasons, the court ought to reverse and total, at a very minimum, the court ought to reverse and remand with respect to the surplus equity claims. [00:32:33] Speaker 00: Thank you. [00:32:33] Speaker 00: Thank you. [00:32:34] Speaker 00: Thank all counsel for their helpful arguments and the case is submitted.