Chao v. 979 Second Ave LLC

Background

Yue Wah Chao, proceeding without a lawyer, sued 979 Second Ave LLC and Elias Tsinias. The dispute arose from state-court litigation in which the defendants had repeatedly sought to enforce a guaranty connected to a leased property. The opinion states that Chao was unsuccessful in several, if not all, of the related state-court proceedings and that the state courts entered judgment for the defendants. Chao principally challenged a state-court “receiver order.”

Chao filed the federal complaint on January 27, 2025, and then sought a temporary restraining order and preliminary injunction. Chao asked the federal court to prohibit the defendants from accessing property and to reverse the state-court judgment. The court issued an order requiring Chao to explain why the case should not be dismissed for lack of subject-matter jurisdiction. Reading Chao’s filings liberally, the court understood Chao to assert constitutional violations arising from the state-court proceedings and judgments, including alleged lack of notice, fraudulent documents, denial of an adjournment and interpreter, and denial of a trial.

Rooker-Feldman doctrine

The court held that Chao’s constitutional claims were barred by the Rooker-Feldman doctrine. That doctrine prevents federal district courts from functioning as appellate courts for state-court judgments; within the federal system, the United States Supreme Court is the court that may review state-court decisions.

The court found that the doctrine’s requirements were met: Chao lost in state court; the state-court judgment came before this federal case; Chao complained of injuries connected to that judgment; and Chao asked the federal court to reverse the judgment. The court held that this remained true even though some allegations concerned the procedures used by the state court or actions taken by the defendants before the judgment. Because a ruling for Chao would require reversing or rejecting the state-court judgment, the federal court concluded that it could not exercise subject-matter jurisdiction over those claims.

Federal claim against the defendants

The court separately stated that, even if the claims were not barred by Rooker-Feldman, Chao would fail to state a federal claim. The court construed the alleged due-process violations as claims under Section 1983, a federal law allowing suits for violations of federal rights by people acting under state authority. The court ruled that 979 Second Ave LLC and Tsinias were not state actors, so the complaint did not state a claim under that law.

State-law claims and amendment

The court expressly took no position on whether Chao adequately pleaded the remaining state-law claims. After dismissing the federal claims, it declined to exercise supplemental jurisdiction, meaning jurisdiction over related state-law claims, and declined to decide those claims.

The court also declined to give Chao an opportunity to amend the complaint. It found amendment would be futile because the claims were barred by Rooker-Feldman and, alternatively, the defendants could not be liable for the alleged constitutional violations on the facts presented.

Disposition

The court dismissed the action under the Rooker-Feldman doctrine, directed the clerk to terminate the pending motions and close the case, and ordered that a copy of the order be mailed to Chao. The opinion does not state that the dismissal was “with prejudice” or “without prejudice.”