Searle v. Allen et al

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Christine M. Searle,
Plaintiff,
v.
John M. Allen, et al.,
Defendants.
No. CV-24-00025-PHX-JJT
ORDER
Almost five years ago, a private entity, Arapaho, successfully foreclosed on
Plaintiff’s private property pursuant to Arizona’s tax lien foreclosure statutes. Plaintiff filed
this lawsuit against Arapaho and its assignee, American Pride (“Private Defendants”), and
later named Maricopa County and its treasurer, John M. Allen (County Defendants”),
alleging that they retained hundreds of thousands of dollars in excess value in violation of
the United States Constitution, the Arizona Constitution, and Arizona state law.
On July 16, 2024, the Court dismissed most of Plaintiff’s claims under the Rooker-
Feldman doctrine and the remaining state law claim for lack of supplemental jurisdiction.
(Doc. 70.) Plaintiff appealed the dismissal to the Ninth Circuit. (Doc. 72.) Meanwhile, on
August 19, 2024, Plaintiff filed a nearly identical state court action in the Maricopa County
Superior Court, cause number CV2024-022530. (Doc. 89.) In the ensuing state court
action, Defendants moved to dismiss Plaintiff’s claims and Plaintiff separately moved to
stay the matter pending the resolution of the Ninth Circuit appeal. The state court granted
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both motions and ultimately deferred entering the dismissal as a final order until the Ninth
Circuit appeal resolved. (See Doc. 89-1 at 442–44.)1
On August 28, 2025, the Ninth Circuit affirmed in part and reversed in part this
Court’s dismissal under the Rooker-Feldman doctrine. See Searle v. Allen, 148 F.4th 1121
(9th Cir. 2025). The effect of that mandate left alive the portion of all Plaintiff’s claims that
“challenge [] Defendants’ post-judgment retention of the excess equity.” Id. at 1131. This
Court held a status conference on November 3, 2025 to discuss the effect of the Ninth
Circuit mandate and state court action on the remaining claims at bar. Shortly before the
status conference took place, Private Defendants notified this Court that the state court
dismissed all Plaintiff’s claims with prejudice except for Counts One and Six2 that were
dismissed without prejudice, and Plaintiff appealed that dismissal to the state appellate
court. (Doc. 89-1 at 453–61.)
After the status conference, the parties submitted supplemental briefing regarding
the viability of claims before this Court (Docs. 88–90, 92). Meanwhile, Plaintiff moved for
partial summary judgment on Defendants’ liability as to her first and sixth claims only
(Docs. 97–98), which Defendants opposed and, as an alternative to their substantive
opposition, requested a stay of this matter pursuant to the Court’s inherent authority3 (see
Doc. 100 at 8; Doc. 101 at 2). Plaintiff opposed the requested stay and argued that partial
summary judgment on the two claims that would survive the preclusive effect of the state
court judgment—if that judgment was upheld—is appropriate. (Doc. 104 at 14–16; Doc.
105 at 2–3). The Court agreed with Plaintiff, and permitted briefing on partial summary
judgment as to Counts One and Six. (Doc. 116.)
After more reflection on the issue, the Court finds sua sponte that it is appropriate
to stay resolution of the pending motions to dismiss and for partial summary judgment
1 When referring to papers submitted by the parties, the Court cites to the page number as
generated by the Electronic Court Filing system, not the parties’ own page demarcation.
2 The state court dismissed the first and fifth claim before it, which were identical to Counts
One and Six of Plaintiff’s Second Amended Complaint at issue here. (See Doc 88 at 4.)
3 In that vein, Private Defendants later mentioned that a stay under Colorado River Water
Conservation District v. United States, 424 U.S. 800 (1976) may be warranted during the
pendency of the state court proceedings, but that discussion was cursory at best. (See Doc.
119 at 9.)
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pursuant to the Younger abstention doctrine until the state court action is resolved. San
Remo Hotel v. City & Cnty. of San Francisco, 145 F.3d 1095, 1103 n.5 (9th Cir. 1998)
(raising Younger abstention sua sponte).
The Younger abstention doctrine applies when (1) a state judicial proceeding is
ongoing; (2) the proceeding implicates important state interests; (3) there is an adequate
opportunity in the state proceedings to raise constitutional challenges, and (4) the federal
court’s relief would enjoin or have the practical effect of enjoining the state judicial
proceeding. Gilbertson v. Albright, 381 F.3d 965, 978 (9th Cir. 2004). As to the fourth
factor, “[p]reclusion rules may be relevant to determining the practical effect of a federal
court’s relief.” Id.
First, the state court action and related appeal is ongoing. See New Orleans Pub.
Serv., Inc. v. Council of City of New Orleans, 491 U.S. 350, 369 (1989) (“For Younger
purposes, the State’s trial-and-appeals process is treated as a unitary system . . .”).
“Younger abstention applies when state court proceedings are initiated before any
proceedings of substance on the merits have taken place in the federal court.” Yelp Inc. v.
Paxton, 137 F.4th 944, 951 (9th Cir. 2025) (citation modified). Here, the Court did not hold
any substantive proceedings before the state court action was filed. Rather, by the time the
state court action was filed on August 19, 2024, it had only ruled on its own subject-matter
jurisdiction under the Rooker-Feldman doctrine, which had nothing to do with the merits
of Plaintiff’s claims. And while the Court had entered partial judgment in favor of a now-
dismissed defendant before the filing of the state court action (see Doc. 34), that partial
judgment was entered upon stipulation of the parties pursuant to Federal Rule of Civil
Procedure 41(a)(2) and, again, had nothing to do with the merits of Plaintiff’s claims.4
4 The Court notes that it did enter a temporary restraining order in favor of Plaintiff during
the pendency of the Ninth Circuit appeal (Doc. 75), but that took place after the state court
action was filed. For argument’s sake, though, assuming that the appeal is the “state
proceeding” for the purpose of Younger abstention and not the underlying trial court matter,
neither this Court’s granting of a temporary restraining order nor subsequent denial of a
preliminary injunction were done on the merits of Plaintiff’s claims. In fact, the Court
expressly noted that it was unable to consider the merits of Plaintiff’s claims at that point.
(See Doc. 79 at 4 (“the Court is unable to assess the second injunction factor.”).) Even to
the extent merits were considered, the merits at issue were those of Plaintiff’s appeal—
which dealt with subject-matter jurisdiction—and not the merits of Plaintiff’s claims.
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Second, the state court action implicates an important state interest. “[S]tates have
an important interest in enforcing orders and judgments of their judicial systems. So long
as challenges to the process by which state judgments are obtained relate to pending state
proceedings, proper respect for the ability of state courts to resolve federal questions
presented in state-court litigation mandates that the federal court stay its hand.” Gilbertson,
381 F.3d at 973 (quoting Pennzoil Co. v. Texaco, Inc., 481 U.S. 1 (1987)). In the state court
action, Plaintiff’s claims challenge the state’s tax lien foreclosure process that enabled
Private Defendants to obtain a foreclosure judgment from a state court without having to
provide just compensation to Plaintiff, and she now appeals the dismissal of those claims
to the state appellate court. This is the kind of action that falls within the purview of
Younger abstention. Sprint Commc’ns, Inc. v. Jacobs, 571 U.S. 69, 78 (2013) (defining the
scope of Younger to include “civil proceedings involving certain orders . . . uniquely in
furtherance of the state courts’ ability to perform their judicial functions.”).
Additionally, Younger abstention serves another important purpose recognized by
the United States Supreme Court, and that is “to avoid unwarranted determination of
federal constitutional questions.” When, as here, the federal court is asked to “interpret
state statutes in a way that raises federal constitutional questions, a constitutional
determination is predicated on a reading of the statute that is not binding on state courts
and may be discredited at any time—thus essentially rendering the federal-court decision
advisory and the litigation underlying it meaningless.” Pennzoil Co., 481 U.S. at 11.
Third, the Court is aware of no state procedural bar that limits Plaintiff’s ability to
raise federal questions—in fact, Plaintiff had brought all her federal claims before the state
court and now seeks an appellate review of that state court’s adjudication of those claims.
See, e.g., Woodfeathers, Inc. v. Washington Cnty., Or., 180 F.3d 1017, 1021 (9th Cir. 1999)
(finding that state court proceedings provided an adequate opportunity to raise federal
questions where a party argued federal preemption in both the state trial and appellate
courts).
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Fourth, the relief currently sought by Plaintiff would have the effect of enjoining
the state court proceedings. That relief, as shaped by the Ninth Circuit mandate and as
currently represented by Plaintiff, includes declarations that (1) the retention of the surplus
equity is a taking not for a public purpose; (2) there was no just compensation provided for
the taking of her property in violation of the United States and Arizona Constitutions; (3)
the retention of the surplus equity was an excessive fine in violation of the United States
and Arizona Constitutions; (4) the state tax lien foreclosure statute violates the Gift Clause
of the Arizona Constitution. (Doc. 92; FAC ¶¶ C, E, F, H.) Under Ninth Circuit law,
“declaratory relief has the same practical impact as injunctive relief on a pending state
proceeding as a result of the preclusive effect of the federal court judgment,” so “[f]ederal
courts should also refrain from exercising jurisdiction in actions for declaratory relief.”
Gilbertson, 381 F.3d at 975. Courts in the Ninth Circuit also abstain from actions involving
damages under § 1983 because the determination of that claim turns on whether a
constitutional violation occurred, which “would have the same practical impact as the
declaration” and “would frustrate the state’s interest in administering its judicial system,
cast a negative light on the state court’s ability to enforce constitutional principles, and put
the federal court in the position of prematurely or unnecessarily deciding a question of
federal constitutional law.” Id. at 980.
Finally, federal courts recognize that Younger abstention may be inappropriate if
“the state proceeding is motivated by a desire to harass or is conducted in bad faith, or
where the challenged statute is flagrantly and patently violative of express constitutional
prohibitions in every clause, sentence and paragraph, and in whether manner and against
whomever an effort might be made to apply it.” Huffman v. Pursue, Ltd., 420 U.S. 592,
611 (1975) (citation modified). Upon review of the record of the state court action provided
by the parties (Doc. 89-1), there is no indication that it was initiated or carried out in bad
faith or to harass. As to whether the state tax lien statute is “flagrantly and patently violative
of express constitutional prohibitions in every clause, sentence and paragraph, and in
whether manner and against whomever an effort might be made to apply it,” the Court
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cannot properly find it so when that is precisely the subject of dispute between the parties—
namely, whether it is an unconstitutional taking, excessive fine, or unconstitutional “gift”
when a private party retains the surplus home equity after a foreclosure sale that was
sanctified by a state court foreclosure judgment—and the Court has yet to hold an
evidentiary hearing or consider any substantive portion of those disputes on the merits.
The factors addressed above counsel in favor of applying Younger abstention until
the state court action is resolved. The Court elects to stay this matter because a stay, rather
than a dismissal, “does not constitute abnegation of judicial duty. On the contrary, it is a
wise and productive discharge of it. There is only postponement of decision for its best
fruition.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 721 (1996) (citation omitted);
see also Gilbertson, 381 F.3d at 979 (holding that a stay, not a dismissal, is necessary under
the Younger abstention doctrine where damages, not just discretionary relief, is at issue).
The Court recognizes that Younger abstention is to be applied only in exceptional
circumstances and “federal courts ordinarily should entertain and resolve on the merits an
action within the scope of a jurisdictional grant, and should not refuse to decide a case in
deference to the States.” Jacobs, 571 U.S. at 73 (citation modified). Here, the claims and
relief sought by Plaintiff, including those which are poised for partial summary judgment,
are the kind that compel abstention under Younger and its progeny.
IT IS ORDERED staying this matter until resolution of Maricopa County Superior
Court cause number CV2024-022530 and related appeal.
IT IS FURTHER ORDERED that the parties shall submit a joint status report
regarding the status of the state court action and related appeal referenced above no later
than sixty (60) days from the date of this Order.
Dated this 31st day of July, 2026.
Honorable John J. Tuchi
United States District Judge
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