Retirement: Res judicata bars challenge to Virginia state retirement law

Where a state employee convicted of embezzling state funds challenged a Virginia law requiring forfeiture of the state’s contribution to his retirement account, but his suit was barred by res judicata, it was dismissed.

Background

Under Virginia law, state employees are entitled to participate in a retirement plan administered by the state. One element of that plan, though, dictates that, if an employee is convicted of a felony, he will forfeit the state’s contribution to his retirement account (although he is entitled to a refund of any personal contributions, plus interest).

After Sammie Todd Moser was convicted of embezzling state funds while he served as the Halifax County Animal Control Warden, the Halifax County, VA, Board of Supervisor determined that he was no longer entitled to retirement benefits under the Virginia Retirement System, or VRS. Moser has sued the Board and VRS, contending that decision—and the statutory scheme that stripped him of the state’s contributions to his retirement—violate his constitutional rights. The Board has filed a motion to dismiss.

Rooker-Feldman

Under the Rooker-Feldman doctrine, federal district courts lack 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, however, Moser does not argue that his injury stems from the adverse state-court judgment. He does not allege, for example, that the circuit court’s decision itself violates his due-process rights.

In fact, Moser’s complaint does not make any mention of the state-court judgment. Rather, he continues to press the argument, as he did in state court, that the statute itself—and defendants’ application of the statute to him—violates the Constitution. Accordingly Rooker-Feldman does not apply.

Burford

The abstention doctrine from Burford v. Sun Oil Co., 319 U.S. 315 (1943), permits abstention when federal adjudication would unduly intrude upon complex state administrative processes because either: (1) there are difficult questions of state law . . . whose importance transcends the result in the case then at bar; or (2) federal review would disrupt state efforts to establish a coherent policy with respect to a matter of substantial public concern.”

Here, however, Moser has not made a claim under state law, nor are his constitutional claims “in any way entangled in a skein of state-law that must be untangled before the federal case can proceed.” The fact that this suit may result in an injunction against an application of state law is not itself a sufficient basis to invoke Burford abstention.

Substantiality

The Board also argues that Moser’s claim does not present a substantial federal question and thus his claims are insufficient to allow him to invoke this court’s jurisdiction. The Board points to Garraghty v. Virginia Retirement System, 200 F. App’x 209 (4th Cir. 2006), in which the court applied the doctrine of substantiality to preclude exercise of jurisdiction over a due-process challenge to the VRS.

But the details of the process that Moser received, and his allegations of why that process was insufficient, are insufficiently developed at this stage for the court to definitively conclude, as a matter of law, that the process was sufficient. And the Board’s contention that the substantiality doctrine applies to Moser’s Eighth Amendment claim because the forfeiture is not excessive improperly conflates the merits of the claim with the court’s subject-matter jurisdiction over the case. Accordingly, the court will deny the Board’s motion to dismiss for lack of subject-matter jurisdiction.

Plausibility

Res judicata applies where there is “(1) a final judgment on the merits in a prior suit; (2) an identity of the cause of action in both the earlier and the later suit; and (3) an identity of parties or their privies in the two suits.” Moser appears to dispute only the first element.

Because the circuit court rendered a final judgment on the merits of Moser’s constitutional claims and it is undisputed that the remaining elements of res judicata are met, Moser’s claims against the Board are barred by res judicata. And even if the claims against the Board were not barred by res judicata, the court would alternatively dismiss the complaint as against the Board because Moser seeks no relief from the Board.

Board’s motion to dismiss granted.

Moser v. The Halifax County VA Board of Supervisors, Case No. 4:24-cv-00010, Oct. 3, 2024. WDVA at Danville (Cullen). VLW 024-3-547. 17 pp.