Professor Bettman’s Introduction to Guest Post

The Supreme Court of Ohio has now addressed the interplay between standing and subject matter jurisdiction in the context of foreclosure cases in both Federal Home Loan Mortgage Corp. v. Schwartzwald and Bank of America v. Kuchta. (Read the analysis of these cases here and here.) I asked my friend and former law school colleague Adam Steinman, an eminently talented civil procedure professor now teaching at the University of Alabama School of Law, if he would comment on the court’s take on standing in these cases, and he has provided this very thought provoking post.

Guest Post: Standing and Subject Matter Jurisdiction in Ohio Foreclosure Actions: A Third Way?

Author: Adam Steinman, University of Alabama School of Law

It’s great to have the chance to make a guest appearance on Legally Speaking Ohio. I’m several years out from my stint in the Buckeye State, but I’ll never forget my time as one of Professor Bettman’s colleagues on the U.C. law faculty. So when she spotlights a case as “a field day for civil procedure geeks,” well, who can resist?

That case, of course, is Bank of America v. Kuchta—a 5-to-2 Supreme Court of Ohio decision rejecting the attempt of two homeowners to collaterally attack a foreclosure judgment against them on the theory that the bank lacked standing in the initial action. Whether a bank has standing to bring a foreclosure action is an especially important issue in light of the Supreme Court of Ohio’s 2012 decision in Federal Home Loan Mortgage Corp. v. Schwartzwald, which held that the bank’s standing must be determined at the time the complaint is filed. Because “standing is a jurisdictional requirement,” Schwartzwald ¶ 22, the court found that a bank cannot cure a lack of standing after filing, such as by obtaining an assignment of the note/mortgage: “post-filing events that supply standing that did not exist on filing may be disregarded, denying standing despite a showing of sufficient present injury caused by the challenged acts and capable of judicial redress.” Id. ¶ 26.

In essence, the issue in Kuchta was whether defendants in a foreclosure action could make the Schwartzwald argument in a collateral attack on the initial judgment, such as by a motion for relief from judgment under Ohio Rule 60(B). The court’s answer is no: “a Civ.R. 60(B) motion cannot be used as a substitute for a timely appeal from the judgment in foreclosure on the issue of standing.” Kuchta ¶ 1. I’ll confess at the outset that I’m not an expert in Ohio civil procedure, so what I’ll offer here are just a few thoughts about the case, in part from the perspective of how federal courts might address some of these issues.

A crucial part of the Kuchta majority’s reasoning is that a lack of standing under Schwartzwald does not deprive the court of subject-matter jurisdiction. Even in the federal system, of course, standing is not necessarily a subject-matter jurisdiction requirement. For example, the U.S. Supreme Court has distinguished between Article III standing (which is jurisdictional) and other kinds of standing, sometimes called “prudential” or “statutory” standing (which are not jurisdictional). See, e.g., Lexmark International v. Static Control Components. But the distinction we see in the federal system can’t explain Kuchta’s treatment of standing in the Schwartzwald context, because Schwartzwald explicitly stated that the lack of standing was a jurisdictional issue. That was the reason Schwartzwald required the bank to have standing at the time the action was commenced.

How does Kuchta get around this problem? Chief Justice O’Connor writes: “Standing is certainly a jurisdictional requirement; a party’s lack of standing vitiates the party’s ability to invoke the jurisdiction of a court—even a court of competent subject-matter jurisdiction—over the party’s attempted action. But an inquiry into a party’s ability to invoke a court’s jurisdiction speaks to jurisdiction over a particular case, not subject-matter jurisdiction.” ¶ 22 (citations omitted).

Thus, Kuchta asserts that there is a difference between a court’s “jurisdiction over a particular case” and “subject-matter jurisdiction.” Where does the notion of “jurisdiction over a particular case” come from? Kuchta cited Pratts v. Hurley, a 2004 case stating that “[t]he term ‘jurisdiction’ is also used when referring to a court’s exercise of its jurisdiction over a particular case.” To support that proposition, Pratts quoted the dissenting opinion in State v. Parker, a 2002 criminal case. In the Parker dissent, then-Justice Cook wrote: “[T]he term ‘jurisdiction’ encompasses at least three distinct concepts: (1) subject matter jurisdiction, (2) jurisdiction over the person, and (3) jurisdiction over the particular case. The third category of jurisdiction encompasses the trial court’s authority to determine a specific case within that class of cases that is within its subject matter jurisdiction. It is only when the trial court lacks subject matter jurisdiction that its judgment is void; lack of jurisdiction over the particular case merely renders the judgment voidable.”

The authorities Justice Cook cited were state court cases from Indiana, Michigan, and Virginia, as well as the court of appeals opinion that the Parker majority had just reversed.

I’m curious how much of a role this third form of jurisdiction plays in Ohio (or in other states like those cited in the Parker dissent quoted above). To be sure, the federal system recognizes that “jurisdiction” is “a word of many, too many, meanings.” E.g., Steel Co. v. Citizens for a Better Environment. But when federal courts struggle with this concept, the choice is framed as whether to recognize that a particular requirement is, or is not, jurisdictional—not whether a jurisdictional requirement should be deemed one of “subject-matter jurisdiction” or one of “jurisdiction over the particular case.”

Even if one accepts the third form of jurisdiction recognized in Kuchta, placing Schwartzwald in that category seems questionable. In declaring that the bank’s lack of standing was, indeed, a jurisdictional issue, Schwartzwald cited numerous federal authorities—all of which were addressing matters of federal subject-matter jurisdiction. See Schwartzwald ¶¶ 25-26 (citing and quoting Supreme Court decisions in Rockwell International v. United States and Grupo Dataflux v. Atlas Global Group, as well as the Wright & Miller treatise on Federal Practice & Procedure).

All this said, the Kuctha majority is still the majority. So in Ohio, it seems, standing is a jurisdictional issue but not a subject-matter-jurisdictional issue. It will be interesting to see whether this aspect of Kuchta will have broader ramifications.