Jeffrey Lui, David Lui v. Comm Ission on Adult Entertainment Establishments of the State of Delaware, an…

1
PRECEDENTIAL
UNITED STATES COURT OF
APPEALS
FOR THE THIRD CIRCUIT
__________
No. 03-2437
__________
JEFFREY LUI, DAVID LUI, and
FANTASIA RESTAURANT &
LOUNGE, INC.,
a corporation of the State of Delaware
Appellants
v.
COMM ISSION ON ADULT
ENTERTAINMENT
ESTABLISHMENTS OF THE STATE
OF DELAWARE,
an entity within the State of Delaware
Department of Administrative
Services, Division of Business &
Occupation Recreation,
M. JANE BRADY, in her capacity as
Attorney General of the
State of Delaware, STATE OF
DELAWARE, and
NEW CASTLE COUNTY, a political
subdivision
of the State of Delaware
__________
On Appeal from the United States
District Court
for the District of Delaware
Civil Action No. 02-177
District Judge: Honorable Kent A. Jordan
Argued April 19, 2004
Before: SCIRICA, Chief Judge,
GARTH, and BRIGHT*, Circuit Judges
(Filed: May 26, 2004)
OPINION
__________
Lewis H. Robertson(Argued)
Lewis H. Robertson, P.C.
116 Oceanport Avenue
Little Silver, New Jersey 07739
Attorney for Appellants,
Jeffrey Lui, David Lui and
Fantasia Restaurant & Lounge, Inc.
Thomas H. Ellis(Argued)
Deputy Attorney General
State of Delaware Department of Justice
820 North French Street, 6th floor
Carvel State Building
Wilmington, Delaware 19801
Attorney for Appellees,
C o m m i s s i o n o n A d u l t
Entertainment Establishments of
the State of Delaware, M. Jane
Brady, and State of Delaware
* Myron H. Bright, Circuit Judge,
United States Court of Appeals for the
Eighth Circuit, sitting by designation.

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1
Mary A. Jacobson(Argued)
Assistant County Attorney
New Castle County Office of Law
87 Reads Way
New Castle, Delaware 19720
Attorney for Appellee, New Castle
County
Garth, Circuit Judge:
Appellants Jeffrey Lui, David Lui
and Fantasia Restaurant & Lounge, Inc.
appeal from the District Court’s summary
judgment in favor of Appellees based on
the abstention doctrine announced in
Younger v. Harris, 401 U.S. 37 (1971).
After Lui1 filed the instant appeal, the
Delaware Superior Court rejected on the
merits Lui’s motion to dismiss the
criminal prosecution pending against him,
which arose out of Lui’s failure to obtain
an adult entertainment establishment
license. For the reasons set forth below,
we will affirm the District Court’s
decision to abstain under Younger, but we
will remand the case to the District Court
with direction to discharge the stay and
dismiss the case with prejudice.
I.
Fantasia Restaurant & Lounge, Inc.
(“Fantasia”) is a bar and restaurant located
at 1031 South Market Street (Route 13) in
New Castle County, Delaware. Fantasia
currently offers exotic dancing by women
dressed in brief costumes. David Lui is
the sole shareholder of Fantasia, and his
son Jeffrey Lui is the general manager of
Fantasia. Lui desires to offer nude
dancing at Fantasia. In order to do so, Lui
must satisfy the zoning and licensing
requirements imposed by both New Castle
County and the State of Delaware.
New Castle County (the “County”)
requires the owner or proprietor, in this
case Lui, who wishes to offer nude
dancing, to first obtain zoning certification
(a permit or license) from the County. To
obtain County zoning certification, Lui
had to satisfy the New Castle County
Department of Planning that the location
of the proposed adult entertainment
establishment complied with the zoning
and subdivision provisions of the New
Castle County Unified Development Code
(the “County Code”). In particular, Lui
was required to co mply with
§ 40-133(a)(13) of the County Code,
which mandates that adult entertainment
establishment be 2,800 feet from a church
or other place of worship, and sets limits
on proximity to schools, residences, and
other adult entertainment establishments.2
1 Appellants will collectively be
referred to as “Lui.”
2 § 40-133(a)(13) states in
relevant part:
Massage parlors which provide services
on and/or off premises, adult bookstores
and adult entertainment centers shall
be permitted as follows:
(a) No such use shall be permitted within
500 feet of any property containing a
dwelling or other residence located
within any residentially zoned district.

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2
Once zoning certification is secured
from the County, the requirements
imposed by the State of Delaware (the
“State”) pursuant to the Delaware Adult
Entertainment Establishments Act (the
“Act”), 24 Del. C. Ch. 16, must be
satisfied. This Act required Lui to file an
application for an adult entertainment
establishment zoning certification with the
Delaware Commission on Adult
Entertainment Establishments. Lui’s
application had to include a copy of the
County’s zoning review results. The State
would then review the application to
ensure that Fantasia’s proposed location
complied with all local laws and
ordinances, pursuant to 24 Del. C.
§ 1610(a).3 Effectively, an applicant
cannot obtain a State license necessary to
operate an adult entertainment
establishment in New Castle County
without first receiving a permit from the
County demonstrating compliance with
the applicable provisions of the County
Code. See Amico v. New Castle County,
571 F. Supp. 160, 163 n.3 (D. Del. 1983).
Indeed, the Act prohibits all counties in
the State of Delaware from issuing permits
or licenses for adult entertainment
establishments unless their distance
restrictions match those decreed by the
State.
A.
Lui filed his first request for
County zoning certification on July 30
1996, before construction of Fantasia was
underway. In his application, Lui stated
that Fantasia would be located more than
2,800 feet from any house of worship. On
August 12, 1996, the New Castle County
Department of Planning granted Lui’s
request for zoning certification, but
stipulated that because Fantasia had yet to
be constructed, the “certification may
(b) No such use shall be permitted within
2,800 feet of a school, church or other
place of worship.
(c) No such use shall be permitted within
1,500 feet of each other.
3 24 Del. C. § 1610 provides, in
relevant part:
(a) No license issued under this chapter
shall authorize the licensee to engage in
or carry on the business of operating an
adult entertainment establishment in any
place other than the premises set forth in
said license. . .
* * *
(c) No new adult entertainment
establishment as defined in § 1602 of
this title shall operate in the same
building or in separate buildings less
than 1,500 feet from each other, within
500 feet of any residence regardless of
how such property is zoned, or within
2,800 feet from a church or school . . .
Distances shall be measured from
property line to property line.
(d) Notwithstanding any provision of
law to the contrary, no municipal
corporation or county may adopt any
ordinance or charter amendment with
distance restrictions less than those
provided in this section.

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3
become null and void due to changing
conditions in the future.” On August 23,
1996, the County’s certification was
revoked because Fantasia was, in fact,
located within 2,800 feet of a church. Lui
appealed, and the revocation was affirmed
by the New Castle County Board of
Adjustment. Lui appealed that
determination to the Delaware Superior
Court.
Lui filed a second request for
County zoning certification on September
24, 1996. He argued that the church that
was located within 2,800 feet of the
Fantasia site had ceased to operate as a
church, and that the County’s denial of
certification violated his due process
rights. The New Castle County
Department of Planning again denied
Lui’s application, and the Board of
Adjustment affirmed.
Lui appealed to the Delaware
Superior Court, which consolidated Lui’s
two appeals and denied both in a
November 20, 1998 opinion. Fantasia
Rest. & Lounge, Inc. v. New Castle County
Bd. of Adjustment, 735 A.2d 424 (Del.
Super. Ct. 1998). The Delaware Supreme
Court affirmed. Fantasia Rest. & Lounge,
Inc. v. New Castle County Bd. of
Adjustment, 734 A.2d 641 (Del. 1999).4
B.
On November 22, 2000, Fantasia
opened for business. Lui concedes that
Fantasia offers live female exotic dancers
dressed in brief costumes, which cover the
genitals and the areola region of the
breast, and that Fantasia is located within
2,800 feet of a church.
On December 31, 2001, Lui was
criminally indicted by the State of
Delaware on three counts of operating and
conspiring to operate an adult
entertainment establishment without
obtaining an Adult Entertainment
Establishment zoning certification. On
April 30, 2002, Lui filed a motion to
dismiss the state indictment, challenging
the constitutionality of the Act and of
§ 40-133(a)(13) of the County Code.5
In State court, Lui argued that the
restrictions imposed by the State and
County effectively deny adequate
alternative avenues of communication for
the presentation of adult entertainment.
4 In late March or early April
2002, Lui submitted a third application
for zoning certification. This time, Lui
applied directly to the State Commission
– he did not first secure zoning
certification from the County in
compliance with § 40-133(a)(13) of the
County’s zoning code. In May 2002,
counsel for Lui asked the State to
withhold action on Lui’s application.
5 As stated above, 24 Del. C.
§ 1610(d) directs that no “county may
adopt any ordinance or charter
amendment with distance restrictions
less than those provided in this section,”
thus subjecting Fantasia to the relevant
portions of New Castle County’s Unified
Development Code.

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4
See State of Delaware v. Fantasia Rest. &
Lounge, Inc., et al., Nos. 0112001060,
0109002426, 0112000958 (Del. Super. Ct.
filed Mar. 9, 2004). On March 9, 2004,
the Delaware Superior Court denied Lui’s
motion to dismiss, holding that the State
and County zoning laws at issue
constituted reasonable time, place and
manner regulations of protected speech
because (1) they are content-neutral; (2)
they are narrowly tailored to serve a
substantial government interest; and (3)
they leave open adequate alternative areas
of communication. See id.
Specifically, the Superior Court
determined that the laws are content-
neutral because they do not constitute a
total ban on adult entertainment, but
merely “ban adult entertainment
establishments from some parts of the
state and county based upon location.” Id.
at 12. The laws, which set the minimum
distance between an adult entertainment
establishment and a church or school, are
narrowly tailored to serve a substantial
government interest because they “are
particularly aimed at protecting those of
tender age and/or seeking spiritual
guidance from exposure to the negative
effects of adult entertainment
establishments.” Id. at 13. And they leave
open adequate alternative areas of
communication because Lui has
acknowledged that twelve available
potential adult use locations exist within
New Castle County, a number which the
S u p e r i o r C o u r t f o un d t o b e
“constitutionally sufficient for purposes of
the Fourteenth Amendment.” Id. at 23
(citing N.W. Enters v. City of Houston,
352 F.3d 162, 182 (5th Cir. 2003)).
The State prosecution against Lui is
presently pending.
C.
On March 11, 2002, Lui filed a
four count Complaint pursuant to 42
U.S.C. § 1983 in the United States District
Court for the District of Delaware. He
filed an Amended Complaint on April 24,
2002. The Complaint echoed the
arguments Lui raised in his motion to
dismiss the State court indictment. He
made the following four allegations:
Count 1: that the Act and County
Code violate the First Amendment;
Count 2: that the County’s
requirement that he pay a $500 application
fee (while a fee of $50 is typical), and the
State’s requirement that he include the
results of his County zoning review in his
State application, violate the Equal
Protection Clause;
Count 3: that the State prosecution
of Lui was motivated by his race6 and
violated his Due Process and Equal
Protection rights; and
Count 4: that the Act is
unconstitutionally broad.
Lui sought declaratory and injunctive
relief, monetary damages, and fees and
6 The record indicates that Jeffrey
and David Lui are of Chinese-American
descent.

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5
costs pertaining to Count One; declaratory
and injunctive relief, monetary damages
from the County only,7 and fees and costs
on Count Two; and declaratory and
injunctive relief and fees and costs from
the State only on Counts Three and Four.
Lui moved for partial summary
judgment on Count One (violation of the
First Amendment), and alternatively for a
preliminary injunction preventing
enforcement of the State Act, 24 Del. C.
§ 1610, and the County Code, § 40-
133(a)(13). He argued that the restrictions
imposed by the State and County
effectively deny adequate alternative
avenues of communication for the
presentation of adult entertainment. The
County cross-moved for summary
judgment, and both the State and the
County filed motions to dismiss Lui’s
Amended Complaint.
Both the State and County argued
that the District Judge was required to
abstain from exercising jurisdiction under
the doctrine announced in Younger v.
Harris, 401 U.S. 37 (1971), because of the
ongoing criminal prosecution of Lui in
state court. The County also argued that it
could not be held liable for enforcing a
zoning restriction imposed upon the
County by State law.
In its January 31, 2003 order, the
District Court held that:
(1)Lui’s claims for equitable relief
are dismissed without prejudice;
(2) Lui’s claims for monetary
damages against the State of Delaware, M.
Jane Brady, and the Commission on Adult
Entertainment Establishments of the State
of Delaware are dismissed with prejudice;
(3)Partial summary judgment is
entered for New Castle County against Lui
on the issue of the County’s liability for
damages under Count One of Lui’s
Amended Complaint; and
(4)Further activity is stayed until
the final resolution of Lui’s criminal
prosecution by the State of Delaware, now
pending in Delaware Superior Court.
The District Court’s order did not
identify each Count in its disposition. We
have been able to cure that deficiency by
reference to the proceedings and the
District Court opinion, to the following
effect: The equitable claims made in
Count One were dismissed without
prejudice under Younger. The District
Court determined that the State and
County were immune to money damages
under the Eleventh Amendment and state
law. Accordingly, the claim for money
damages against the State and County
were dismissed with prejudice. As to
Count Two, the equitable claims
pertaining to Equal Protection were
dismissed without prejudice, and the
claims for monetary damages and fees and
costs were stayed. At oral argument,
7 Lui conceded that the State was
immune to Lui’s claims for damages
under the Eleventh Amendment. Lui
also withdrew all claims against
defendant M. Jane Brady, Attorney
General of Delaware.

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6
counsel for Lui stipulated that all of Count
Two should be regarded as having been
dismissed with prejudice. Counts Three
and Four sought only equitable relief, and
were dismissed by the District Court
without prejudice. In his appellate brief,
Lui conceded that Counts Three and Four
were properly the subject of Younger
abstention.
Thus, what remains for us to decide
is whether the District Judge erred in
applying Younger abstention to Count
One, and whether he erred by retaining
jurisdiction over Lui’s claim for fees and
costs brought in the same Count.8
Lui filed a timely appeal from the
District Court’s orders of January 31, 2003
and February 27, 2003.
II.
The District Court had jurisdiction
over Lui’s federal action pursuant to 28
U.S.C. §§ 1331 and 1343(a)(3) and (4).
Lui asserts that this Court has jurisdiction
over the instant appeal pursuant to 28
U.S.C. § 1291. The County moved to
dismiss Lui’s appeal for lack of appellate
jurisdiction.
We address jurisdiction of this
Court at the outset. Although the
timeliness of Lui’s appeal was questioned
by the County, our independent analysis
shows that the County’s claim of
untimeliness is without merit for two
reasons. First, the order which the County
identified as being “final” was, in fact,
interlocutory, as it was “without
prejudice.” See Borelli v. City of Reading,
532 F.2d 950, 951-52 (3d Cir. 1976) (per
curiam). Second, the District Court
retained jurisdiction over the fees and
costs claimed by Lui under Count One,
thereby ostensibly leaving its order non-
final.
This latter issue, which we discuss
later in this opinion, did not affect the
finality of the District Court’s order,
however, because a ruling which orders
Younger abstention transfers the entire
proceeding to the State court for
adjudication, including all of its collateral
aspects – in this case, fees and costs. We
have therefore held that a district court’s
Younger abstention order constitutes a
final, appealable order under 28 U.S.C.
§ 1291 because, under Younger v. Harris,
the effect of such an order is to surrender
jurisdiction of the federal action to a state
court. By doing so, the Younger
abstention order becomes immediately
appealable. See Schall v. Joyce, 885 F.2d
101, 105 (3d. Cir. 1989); Moses H. Cone
Mem. Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 10 (1983). As we said in
Schall:
8 In its February 27, 2003 opinion,
the District Court denied Lui’s motion
for reargument without prejudice to a
later filing of a motion to reconsider,
which the District Judge restricted to the
issue of the availability of fees and costs
pursuant to § 1988. In effect, the
District Court retained jurisdiction over
the fees and costs, as they pertained to
Count One (violation of the First
Amendment).

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7
Because we are convinced
that ‘the object’ of the
district court’s [order and]
stay was ‘to require all or an
essential part of the federal
suit to be litigated in a state
forum,’ Moses H. Cone, 460
U.S. at 10 n. 11, we
conclude that the district
court’s stay order was an
abstention order that is final
within the meaning of 28
U.S.C. § 1291.
885 F.2d at 105.9
III.
This Court exercises plenary review
over the District Court’s legal
determination that the requirements for
Younger abstention have been met.
University of Maryland v. Peat Marwick
Main & Co., 923 F.2d 265, 270 (3d Cir.
1991). If the requirements for abstention
have been met, this Court reviews the
District Court’s decision to abstain under
Younger abstention principles for abuse of
discretion. Gwynedd Properties, Inc. v.
Lower Gwynedd Tp., 970 F.2d 1195, 1199
(3d Cir. 1992).
IV.
We now turn to the question at the
heart of this appeal – was the District
Court’s decision to invoke Younger
abstention proper? Lui asserts that the
District Court erred in applying Younger
in this case.
We have had a longstanding public
policy against federal court interference
with state court proceedings. Younger has
taught us that federal courts should not act
to restrain a criminal prosecution where
the appellant here, has an adequate remedy
at law in state court and will not suffer
irreparable injury if denied equitable
relief. Moreover, this principle, Younger
teaches,
is reinforced by an even
more vital consideration, the
notion of ‘comity,’ that is, a
proper respect for state
functions, a recognition of
the fact that the entire
country is made up of a
Union of separate state
governments, a n d a
continuance of the belief
t h a t t h e N a t i o n a l
Government will fare best if
the States and their
institutions are left free to
perform their separate
functions in their separate
ways.
401 U.S. at 44. Accordingly, Younger
states that “it has been perfectly natural for
9 We also had concerns as to
whether we had jurisdiction to entertain
this appeal because Count Two was
dismissed by the District Court without
prejudice. As noted in text, when we
raised this question with counsel for Lui
at oral argument, he conceded that Count
Two should be dismissed with prejudice,
and he forwarded a letter to us
acknowledging that fact.

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8
our cases to repeat time and time again
that the normal thing to do when federal
courts are asked to enjoin pending
proceedings in state courts is not to issue
such injunctions.” Id. at 45. State courts
are every bit as competent to deal with the
claims of the appellant (in this case, the
defendant in the criminal proceeding) as
are the federal courts and this, of course,
includes the ability to address claims
under both the State constitution and the
Federal constitution. Thus, we have been
instructed that the concerns of comity and
federalism which underlie the Younger
doctrine command the federal courts to
respect the independence and functioning
of the state courts. Rizzo v. Goode, 423
U.S. 362, 380 (1976).
Following Younger, this Court has
set out a three-prong test to determine
whether courts should abstain from
addressing the merits of a federal action in
the face of ongoing state criminal
litigation. Abstention under Younger is
appropriate only where: (1) there are
ongoing state proceedings that are judicial
in nature; (2) the state proceedings
implicate important state interests; and (3)
the state proceedings afford an adequate
opportunity to raise the federal claims.
Gwynedd Properties, Inc. v. Lower
Gwynedd Tp., 970 F.2d 1195, 1200 (3d
Cir. 1992).
In the instant case, the District
Court Judge determined that all three
prongs of the Gwynedd Properties test
were met, and Younger abstention should
therefore be invoked. First, it was
undisputed that Lui was – and still is –
defending a pending criminal prosecution
in State court. Second, the District Court
Judge concluded that the State’s criminal
prosecution of Lui implicated important
State interests – namely, the State’s effort
to control the negative effects of adult
entertainment establishments through the
enforcement of its zoning laws. Third, the
District Court Judge held that Lui had
failed to carry his burden of showing that
he could not present his constitutional
claims as a defense in State court. See
Pennzoil Co. v. Texaco, Inc., 481 U.S. 1,
14 (1987) (“the burden on this point rests
on the federal plaintiff to show that state
procedural law barred presentation of its
claims.”). Furthermore, as we noted
above, Lui had already filed a motion to
dismiss the State indictment which
challenged the constitutionality of the
State zoning statute. Thus the District
Court concluded that Lui had the
opportunity to raise all of his
constitutional claims in State court.
On appeal, Lui argues that Younger
abstention was not proper because Count
One of his federal claim does not
implicate important state interests, and
because the State proceedings might not
afford him an adequate opportunity to
raise his federal claims. Reviewing the
District Court’s Younger analysis under a
plenary standard, we reject both of Lui’s
arguments. First, Count One implicates
the State’s valid and important interest in
regulating the location and effect on the
community of adult entertainment
establishments, particularly their effect on
individuals attending school or a house of

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9
worship. See Larkin v. Grendel’s Den,
Inc., 459 U.S. 116, 121 (1982) (zoning
laws may be validly used to regulate the
environment around schools and churches,
given the legitimate interest in insulating
them fro m certain commercial
establishments).
Second, it is beyond dispute that
the State court prosecution has afforded
Lui an opportunity to raise his sole
remaining federal claim – Count One
(Lui’s First Amendment claim). By the
time Lui filed his federal action, he had
already brought a motion to dismiss the
charges filed against him by the State, and
that motion, among other things,
challenged the constitutionality of the
State Act. See State v. Fantasia Rest. &
Lounge, Nos. 0112001060, 0109002426,
0112000958 (Del. Super. Ct. filed Mar. 9,
2004). Indeed, the submissions made by
Lui in defense of the State criminal
charges are identical to the Amended
Complaint which he filed in Federal court
and from which the District Court has
abstained. Thus it is not surprising that
the District Court concluded that Lui has
the opportunity to raise his Federal
constitutional claims in State court.
We have previously noted that the
District Court dismissed all of Lui’s
equitable claims, which included a request
for an injunction to prevent enforcement
of the State Act and the County Code
against him, and a declaratory judgment
that the State Act and the County Code are
unconstitutional.10 But here, as in
Younger, a criminal proceeding raising the
same issues and affording Lui an
opportunity to assert all of his
constitutional claims was pending in State
court. As Younger teaches us, any injury
to which such a defendant may be exposed
is solely “that incidental to every criminal
proceeding brought lawfully and in good
faith.” Younger, 401 U.S. at 49 (internal
quotations omitted).
We are satisfied that the record and
the principles we have related clearly
demonstrate that there is no merit to the
arguments that Lui has advanced. The
District Court Judge did not abuse his
discretion when he determined that all
three prongs of the Gwynedd Properties
test were met, because (1) Lui is
defending a pending criminal prosecution
in state court, (2) the prosecution
implicates the State’s interest in
controlling the negative effects of adult
entertainment establishments, and (3) Lui
actually did raise, albeit unsuccessfully,
his constitutional claims as a defense to
his prosecution in State court. The
10 See Samuels v. Mackell, 401
U.S. 66 (1971) (holding that declaratory
relief is improper when a prosecution
involving the challenged state statute is
pending in state court at the time the
federal suit is initiated, and the same
principles that govern the propriety of
federal injunctions of State criminal
proceedings govern the issuance of
federal declaratory judgments in
connection with such proceedings).

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10
District Court did not err in abstaining
pursuant to Younger v. Harris, supra.
V.
Having determined that the District
Court correctly analyzed Lui’s claims in
accordance with the principles and
instruction of Younger v. Harris, we are
obliged to hold that the District Court did
not correctly implement its order because
it retained jurisdiction over Court One as
it pertained to fees and costs, and we now
address that issue. In Moses H. Cone, the
Supreme Court observed that where “a
stay of the federal suit pending resolution
of the state suit meant that there would be
no further litigation in the federal forum;
[then] the state court’s judgment on the
issue would be res judicata . . . [and the]
stay order amounts to a dismissal of the
suit.” Moses H. Cone, 400 U.S. at 10. In
Schall, this Court extended the holding in
Moses H. Cone, which was a Colorado
River abstention case, to the Younger
abstention context. Thus, as we noted
above, a Younger abstention stay requires
a dismissal with prejudice of the federal
suit.
The District Court’s February 27,
2003 order, see note 8, supra, implies that
if Lui were successful on the merits in
State criminal court he could then revisit a
portion of his federal claims to seek fees
and costs from the State and County
ostensibly under 42 U.S.C. § 1988, and
thus a stay of those claims was
appropriate. We cannot agree. Section
1988(b), which governs fee and cost
awards for § 1983 claims, allows such
awards to the party who prevails on the
merits of the federal claim. See Healy v.
Town of Pembroke Park, 831 F.2d 989
(11th Cir. 1987). Defense of a State
criminal prosecution is not a proceeding
for which fees and costs can be awarded
under § 1988. See Venuti v. Riordan, 702
F.2d 6 (1st Cir. 1983); see also Greer v.
Holt, 718 F.2d 206 (6th Cir. 1983). Thus,
even a successful defense of the State
criminal charges would not entitle Lui to
seek fees and costs in federal court, and
the stay of those claims was therefore in
error.
VI.
Having held that the District Court
did not err in abstaining from deciding the
merits of Lui’s federal complaint, we have
no occasion to address the merits of Lui’s
constitutional arguments. These were
properly transferred to the Delaware
courts, and are not the subject of our
analysis. Indeed, the opinion of the
Delaware Superior Court, which was filed
during the pendency of Lui’s federal
appeal, reflects that the Delaware Superior
Court, addressing the exact same
constitutional claims made by Lui here,
rejected on the merits all of the issues
which Lui sought to have us decide. This
being so, if for no other reason, the
doctrines of res judicata on the one
hand,11 or Rooker-Feldman on the other,12
11 Res judicata bars suit where
there was (1) an earlier decision on the
issue, (2) a final judgment on the merits,
and (3) the involvement of the same

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would militate against our deciding the
merits of the federal claim in any event.
One thing more needs to be said.
The stay which the District Court imposed
on the request for fees and costs in Count
One must, as a matter of law, be
discharged. As we have pointed out, the
abstention order transferred the whole “kit
‘n caboodle” of Count One to the state
court to be adjudicated. Thus the fees and
costs, as well as all the other elements of
Count One, no longer remained in the
federal court, and the District Court could
not under any circumstance rule on those
issues.
Thus, we will affirm the District
Court in all respects except one – we are
obliged to reverse and remand to the
District Court the stay which was
improviden tly and consequentl y
erroneously entered pertaining to the fees
and costs. The District Court is instructed
to correct its judgment accordingly, so that
all matters that remained in the District
Court are now remitted to the Delaware
Superior Court for adjudication.
parties, or parties in privity with the
original parties. Restatement (Second)
of Judgments §§ 17, 24 (1982).
12 The Rooker-Feldman doctrine
divests a federal district court of
jurisdiction if the plaintiff’s claim was
either (1) actually litigated in state court
or (2) if the claim is inextricably
intertwined with the prior state court
ruling. See Desi’s Pizza, Inc. v. City of
Wilkes-Barre, 321 F.3d 411, 419 (3d Cir.
2003).

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