In the
United States Court of Appeals
For the Seventh Circuit

No. 99-1836

4901 Corporation, an Illinois corporation,
d/b/a Pure Gold and Dollounge, Incorporated,
an Illinois corporation, d/b/a Dollounge,

Plaintiffs-Appellants,

v.

Town of Cicero, an Illinois municipal corporation,

Defendant-Appellee.



Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 98 C 326--Charles R. Norgle, Sr., Judge.


Argued November 4, 1999--Decided July 17, 2000



  Before Manion, Kanne, and Evans, Circuit Judges.

  Manion, Circuit Judge. The 4901 Corporation and
Dollounge, Inc., ("Bars") are striptease bars in
Cicero, Illinois. The Bars and Cicero agreed in
1997 to settle a state court action where the
Bars had challenged Cicero’s repeal of a
provision of its municipal code providing for
late night liquor licenses. Within a year the
Bars sued Cicero again, this time in federal
court, challenging their duty to comply with
Cicero’s Adult Use Ordinance--another part of the
town’s licensing mechanism for striptease bars--
which seemed to be a part of the 1997 settlement
agreement. The district court ultimately found
that res judicata barred the Bars’ federal
lawsuit and entered judgment in favor of Cicero.
Although the Bars’ arguments about the settlement
agreement are waived and their challenge to the
Adult Use Ordinance is barred by res judicata, we
dismiss the appeal because we lack jurisdiction
to consider the Bars’ claims under the Rooker-
Feldman doctrine.

I.   Background

  For at least the last few years, the Bars had
been providing nude or semi-nude female dancing
in Cicero and had been staying open until 6:00
a.m., pursuant to a Cicero Class A/F liquor
license. A "Class A" liquor license allows
taverns to serve liquor until 2:00 a.m.; a "Class
F" (late hour) liquor/entertainment license
allowed taverns to serve liquor and provide
entertainment until 6:00 a.m. (Cicero asserts
that the "entertainment" aspect of that provision
never did cover nude dancing, so to speak.)
Cicero also has a more generic "entertainment"
license provision (Section 5-9) for what the Bars
call "non-adult" entertainment, and it has an
"Adult Use Ordinance" for erotic entertainment
(called "adult uses"). This ordinance requires
businesses offering erotic entertainment to
obtain licenses, and it requires their employees
to wear at least minimal clothing. The employees
also must refrain from exposing certain body
parts and from engaging in certain sexual acts.
These three provisions are how Cicero has
regulated nude dancing.

  When the Bars applied to renew their A/F liquor
licenses at the end of 1996, Cicero advised them
that it had repealed the provision of its Liquor
Control Ordinance allowing F licenses. It also
told them that, for the first time, they would
have to obtain Entertainment Licenses under
Section 5-9. The Bars responded by filing an
action in state court in January 1997,
challenging on numerous grounds the repeal of the
Class F liquor license provision. They alleged
that the repeal of this provision deprived them
of due process and the equal protection of the
laws under both the Illinois and United States
Constitutions and that it violated their rights
to freedom of expression under the First
Amendment to the federal constitution. They also
alleged that the repeal of the F license
provision violated Illinois’ Liquor Control and
Administrative Procedures Acts as well as the
common law. The Bars did not challenge Cicero’s
Adult Use Ordinance, although it is clear from
their state court complaint that they were fully
aware of this ordinance:

Plaintiff is likely to succeed on the merits in
that Plaintiff has a vested and inalienable right
guaranteed by the First Amendment to the United
States Constitution to offer or provide
entertainment to its patrons upon its premises as
long as the entertainment falls within the realm
of protected expressive conduct. Plaintiff
employs female dancers whose performances fall
within the lawful parameters of Section 22-301 of
the Code [Cicero’s Adult Use Ordinance].

State complaint, para.25 (emphasis added). As
part of their relief, the Bars requested that the
state court declare that they have "a vested and
inalienable [First Amendment] right to offer and
provide lawful entertainment upon [their]
premises as long as the entertainment falls
within the realm of protected expressive
conduct".

  The Bars and Cicero agreed to settle the state
action in March 1997. The settlement agreement
provided that "upon the completion of a Town of
Cicero Application For Business License with the
attached Statement and the payment of the
requisite application and license fees, the Town
of Cicero shall issue to the [Bars] Entertainment
Licenses as defined in Cicero Municipal Code
Section 5-9." (Emphasis added.) The "attached
statement" to the agreement pertained exclusively
to the Adult Use Ordinance, and in three similar
paragraphs labeled "Food And Drink Service,"
"Table And Personal Dancing," and "Stage
Dancing," expressly referred to that ordinance
and summarized its requirements. For example, the
first paragraph provided:

1. Food And Drink Service: The women and
men serving cocktails and other food and drinks
shall be clad in the outfits described in the
attached pictures and such clothing shall cover
the specified anatomical areas specified in the
Town of Cicero Adult Use Ordinance Sections 22-
301 and 22-303 attached herein. In addition, any
activities regarding food an [sic] drink service
shall not include any of the specified sexual
activities described in the Town of Cicero Adult
Use Ordinance Sections 22-301 and 22-302 attached
herein.

Attached to this statement were, in turn, four
pictures of examples of appropriate attire for
employees under the Adult Use Ordinance, a copy
of Section 5-9 (the generic entertainment license
provision), and a complete copy of the Adult Use
Ordinance itself. The settlement agreement also
provided that the Bars would voluntarily dismiss
their state court action.
  The state court incorporated the settlement
agreement into its April 1997 order of dismissal,
expressly approving, ratifying, and adopting the
agreement’s terms and conditions and ordering the
parties to comply with them./1 The order also
recounted that the Bars were voluntarily
dismissing their complaint, and that the state
court would retain jurisdiction over the case to
enforce the agreement. The Bars applied for
Entertainment Licenses by completing forms that
stated they would comply with the Adult Use
Ordinance. Cicero issued the Bars the licenses,
but within a year, the Bars were cited for
violations of the Liquor and Adult Use Ordinances
and their licenses were revoked (according to the
administrative complaint, one of the Bars had
also, at times, been operating more like a
bordello than a bar). The Bars responded by
filing this case in federal court seeking
declaratory and injunctive relief as to the Adult
Use Ordinance, alleging that it banned protected
expression in violation of the First Amendment
and gave officials too much licensing discretion
in violation of the Due Process Clause of the
Fourteenth Amendment.

  Cicero moved to dismiss the complaint under Fed.
R. Civ. P. 12(b)(6) on the ground that the Bars’
claims were barred by res judicata, arguing that
the substance of the state and federal actions
were the same, and that even if they were not,
the actions were similar enough so that the Bars
could have challenged the Adult Use Ordinance in
the state action. The district court denied
Cicero’s motion, concluding that the "identity of
the cause of action" requirement for res judicata
was not satisfied because in the state action the
Bars challenged Cicero’s repeal of the "F"
licencing provision of its Liquor Control
Ordinance, while in the present case they were
challenging Cicero’s Adult Use Ordinance.

  The Bars then moved for summary judgment. In
opposition, Cicero maintained that the federal
action was barred. It first argued that in the
state court settlement the Bars agreed to comply
with the Adult Use Ordinance, and that under
Illinois law the settlement agreement, together
with the accompanying state court dismissal
order, constituted a final judgment to which
federal courts must give full faith and credit.
Cicero reasserted that even if the Bars did not
challenge the Adult Use Ordinance in their state
suit, they could have done so. The Bars replied
that, for various reasons, whether they violated
a settlement agreement from a prior action was
irrelevant to their ability to maintain the
present action./2 The district court
reconsidered its prior order on Cicero’s motion
to dismiss, this time focusing on the settlement
agreement. It held that the parties had "settled
issues that are in dispute in this matter," and
as a result, res judicata barred the Bars’
challenges to the Adult Use Ordinance. The order
stated:

Specifically, as part of the decree over which
the state judge presided and approved, [the Bars]
agreed to comply with the specific portions of
the Adult Use Ordinance they criticize in this
case. Specifically, [the Bars] agreed, as part of
their application for entertainment licenses,
that any men or women involved in food or drink
service, table and personal dancing, or stage
dancing, would be clad in clothing that would
"cover the specified anatomical areas specified
in the Town of Cicero Adult Use Ordinance . . ."
Attached to the agreement were photographs
demonstrating appropriate clothing. [The Bars]
further agreed that all such individuals would
not partake in any "specified sexual activities"
described in the ordinance. Their capitulation in
the state case is determinative in this matter.
Because they agreed to abide by the Adult Use
Ordinance, the agreement is conclusive and bars
[the Bars] from asserting otherwise.

The court denied the Bars’ motion for summary
judgment and entered judgment in favor of Cicero.
The Bars appeal./3

II.   Discussion

  The Bars argue that the district court erred in
dismissing their claims based on the settlement
agreement. They contend that even if they agreed
to comply with the Adult Use Ordinance, the
agreement is either void ab initio for requiring
them to abide by an unconstitutional law, or it
is unenforceable because Cicero has not
established that the Bars knowingly waived their
right to challenge the Adult Use Ordinance in the
future. The Bars also argue that they did not, in
fact, agree to comply with that ordinance or
agree that the ordinance is constitutional
(according to the Bars, they only agreed to fill
out forms stating they would comply with the
ordinance)./4
A. Rooker-Feldman

  Before we address whether the settlement
agreement bars the Bars’ federal lawsuit as res
judicata, we must answer a threshold question
(which neither of the parties has raised); we
must determine whether, under the Rooker-Feldman
doctrine, we have jurisdiction to review the
Bars’ claims. Garry v. Geils, 82 F.3d 1362, 1364
(7th Cir. 1996) (Rooker-Feldman can be raised sua
sponte); see also Young v. Murphy, 90 F.3d 1225,
1230 (7th Cir. 1996). If Rooker-Feldman applies,
we lack jurisdiction to consider whether the
district court correctly dismissed the Bars’
claims as res judicata. Garry, 82 F.3d at 1365;
Centres, Inc. v. Town of Brookfield, Wis., 148
F.3d 699, 703 (7th Cir. 1998).

  The Rooker-Feldman doctrine "essentially
precludes lower federal court jurisdiction over
claims seeking review of state court judgments or
over claims that are ’inextricably intertwined’
with state court determinations." Remer v.
Burlington Area Sch. Dist., 205 F.3d 990, 996
(7th Cir. 2000) (citing Rooker v. Fidelity Trust
Co., 263 U.S. 413, 415-16 (1923); District of
Columbia Court of Appeals v. Feldman, 460 U.S.
462, 482 n.16 (1983)). It "is based upon
recognition of the fact that inferior federal
courts generally do not have the power to
exercise appellate review over state court
decisions." Garry, 82 F.3d at 1365. Therefore,
except for situations in which Congress has
specifically authorized collateral review of
state court judgments, a party who seeks to
overturn a state court judgment must proceed
through the state judicial system and can only
seek federal court review in the United States
Supreme Court pursuant to 28 U.S.C. sec. 1257.
See Garry, 82 F.3d at 1365 & n.4; Young, 90 F.3d
at 1230.

  To determine whether Rooker-Feldman applies, we
"ask whether the federal plaintiff seeks to set
aside a state court judgment or whether he is, in
fact, presenting an independent claim."
Kamilewicz v. Bank of Boston Corp., 92 F.3d 506,
510 (7th Cir. 1996). "Put another way, if the
injury which the federal plaintiff alleges
resulted from the state court judgment itself,
then Rooker-Feldman controls, and the lower
federal courts lack jurisdiction over the claim.
It does not matter that the state court judgment
might be erroneous or even unconstitutional. Nor
does it matter that the time for appeal to the
United States Supreme Court may have passed." Id.

  In this case, the Bars first concede that they
agreed to comply with the Adult Use Ordinance but
ask us either to declare the agreed judgment void
ab initio for requiring them to abide by an
unconstitutional law or to declare the agreed
judgment unenforceable (or essentially void)
because Cicero has not shown that the Bars
knowingly waived their right to challenge the
Adult Use Ordinance in the future./5 With this
argument, though, the Bars essentially
acknowledge that it is the agreed judgment that
is most immediately injuring them by preventing
them from challenging the Adult Use Ordinance.
See id. at 511 ("[T]he plaintiffs’ injuries are a
result of the state court judgment. Their claim
in federal court is a multi-pronged attack on the
approval of the settlement . . . ."). To remedy
this injury the Bars unabashedly ask us to set
that judgment aside. This is a "most straight-
forward presentment" of Rooker-Feldman. Remer,
205 F.3d at 996. Voiding (effectively reversing)
the state court judgment is something we may not
do. See Garry, 82 F.3d at 1365. If the Bars
thought the agreement was unconstitutional, they
either should not have entered into it, or after
they did, they should have litigated its
constitutionality in the state court system,
pursuing the matter, if need be, to the United
States Supreme Court. Id. at 1368. For whatever
reason the Bars did not raise these issues at the
appropriate time in state court; Rooker-Feldman
denies us jurisdiction to consider them now./6
B.   Waiver

  Even assuming that we had jurisdiction, the
Bars’ claims would fail for other reasons. The
Bars try to get out from under the agreement by
arguing that they did not, in fact, agree to
abide by the Adult Use Ordinance; rather, they
contend that they just agreed to fill out the
application forms for the Entertainment Licenses.
Of course the forms specifically state that they
will comply with the Adult Use Ordinance. As we
discuss later, the Bars’ attempt to dissect their
agreement is disingenuous. On this issue, though,
the Bars spared the district court from having to
go through their machinations over exactly what
they did and did not agree to do. For while the
Bars did, in one sentence, mention to the
district court that the agreement did not
preclude them from later challenging the Adult
Use Ordinance, they did not openly deny that they
had, in fact, agreed to comply with that
ordinance (see n.2, supra)./7 And they clearly
did not argue, as they now do, that they simply
agreed to fill out forms. Nor did they ever
attempt to make either the void ab initio or
"knowing waiver" arguments. As we have often
said, specific arguments not raised below are
waived on appeal. Libertyville Datsun Sales, Inc.
v. Nissan Motor Corp. in U.S.A., 776 F.2d 735,
737 (7th Cir. 1985) ("It is not enough that the
’general issue’ of the Act and the Agreement with
attached Amendment were before the district
court. The arguments that are specifically based
on the Amendment must also be presented to the
court."). Because the Bars had the opportunity
and the obligation to raise these arguments to
the district judge yet failed to do so, they are
now waived. Pond v. Michelin N. Am., Inc., 183
F.3d 592, 597 (7th Cir. 1999).

C.   Res Judicata

  Although we have determined that Rooker-Feldman
on one hand and waiver on the other doom the
Bars’ appeal, the district court dismissed their
challenges to the Adult Use Ordinance on a third
ground, res judicata. The Bars of course argue
that the district court erred in doing so. Even
if properly preserved, however, this argument
would not succeed.

  "Because an Illinois state court rendered the .
. . order at issue, we must apply Illinois law to
determine whether res judicata bars [the Bars’]
claims." Long v. Shorebank Dev. Corp., 182 F.3d
548, 560 (7th Cir. 1999); Whitaker v. Ameritech
Corp., 129 F.3d 952, 955 (7th Cir. 1997). For
under 28 U.S.C. sec. 1738, we must give a state
court judgment "full faith and credit," meaning
that we must give the settlement agreement the
res judicata effect an Illinois court would give
it. Torres v. Rebarchak, 814 F.2d 1219, 1222 (7th
Cir. 1987) (applying Illinois law). If an
Illinois court would prevent the Bars from
challenging the Adult Use Ordinance due to the
settlement agreement, so must we. Id.

  Res judicata bars a later suit between parties
involving the same cause of action and includes
"what was actually decided in the first action,
as well as those matters that could have been
decided in that suit." River Park, Inc. v. City
of Highland Park, 703 N.E.2d 883, 889 (Ill.
1998). "For the doctrine of res judicata to
apply, the following three requirements must be
satisfied: (1) there was a final judgment on the
merits rendered by a court of competent
jurisdiction, (2) there is an identity of
cause[s] of action, and (3) there is an identity
of parties or their privies." Id. The third
requirement is not at issue here.

  With respect to the first requirement, under
Illinois law a settlement agreement that a state
court adopts and incorporates, like the agreement
here, is the equivalent of a consent decree. Ad-
Ex, Inc. v. City of Chicago, 565 N.E.2d 669, 678
(Ill. App. Ct. 1990) (supplemental opinion on
denial of rehearing); cf. Wehde v. Regional
Transp. Authority, 604 N.E.2d 446, 462 (Ill. App.
Ct. 1992). As such, it "operates to the same
extent for res judicata purposes as a judgment
entered after contest and is conclusive with
respect to the matters which were settled by the
judgment or decree." City of Mattoon v. Mentzer,
668 N.E.2d 601, 606 (Ill. App. Ct. 1996). This
conclusive effect pertains to any issue which
might have been raised in the proceeding. Arnett
v. Environmental Science & Eng’g, Inc., 657
N.E.2d 668, 673 (Ill. App. Ct. 1995). Because the
Bars voluntarily dismissed their state court
claims pursuant to the settlement agreement, the
state court dismissal order (adopting that
agreement) is a final judgment that is entitled
to res judicata effect. Jackson v. Schencker &
Schencker, 494 N.E.2d 669, 670 (Ill. App. Ct.
1986); see also Torres, 814 F.2d at 1223 ("res
judicata applies even if the dismissal was the
result of a settlement or compromise between the
parties.").

  The Bars argue that the second requirement of
res judicata is not met because their state
action was different; it concerned Cicero’s
repeal of the Class "F" liquor license provision
of its code. This is true but irrelevant. The
Bars broadened that action--at least for res
judicata purposes--by agreeing to a settlement of
that case which included their obligation to
comply with the Adult Use Ordinance. As noted,
the Bars maintain that they agreed only to
complete forms that recited adherence to the
Ordinance, but their parsing of the agreement is
disingenuous.

  Although the Bars and Cicero perhaps did not
draft the agreement as artfully as they could
have, there is no mystery here./8 The agreement
included a complete copy of the Adult Use
Ordinance, photographs showing employees how to
dress to comply with it, and, moreover, a license
application that repeatedly referred to that
ordinance and set forth its requirements in great
detail. The agreement incorporated this
application by reference and stated that the Bars
would complete it (which they did) in exchange
for receiving an Entertainment Licence (which
they got). Agreeing to complete forms that state
you will abide by an ordinance has the same
effect as agreeing to abide by that ordinance.
The Bars cannot elevate form (or in this case,
forms) over substance. Their agreement to comply
with the Adult Use Ordinance bars as res judicata
a later challenge to it, and the district court
therefore correctly entered judgment for Cicero.
See Menzer, 668 N.E.2d at 606.

  But even if the Bars did not specifically agree
to comply with the Adult Use Ordinance, did not
agree it was constitutional, or did not agree not
to challenge it in the future, res judicata would
still bar their challenge to it, for the doctrine
precludes not only claims that were brought (or
settled) in a prior action, but those that could
have been brought as well. River Park, 703 N.E.2d
at 889. Illinois recently broadened its approach
to determining what claims could have been
brought in a prior action for purposes of res
judicata’s "identity of the causes of action"
component. In River Park, which neither of the
parties has discussed, the Illinois Supreme Court
rejected the continued use of the "same evidence"
test in favor of the more expansive
"transactional test." See id. at 892-893. The
transactional test "is more pragmatic" than the
same evidence test. Id. at 892. "Under this
approach, a claim is viewed in ’factual terms’
and considered ’coterminous with the transaction,
regardless of the number of substantive theories,
or variant forms of relief flowing from those
theories, that may be available to the plaintiff;
. . . and regardless of the variations in the
evidence needed to support the theories or rights.’"
Id. (quoting Restatement (Second) of Judgments
sec. 24 cmt. a (1982)).

  The Illinois Supreme Court looked to the
Restatement (Second) of Judgments to help
explicate this test. See id. at 893. Under the
Restatement, a valid and final judgment
extinguishes "all rights of the plaintiff to
remedies against the defendant with respect to
all or any part of the transaction, or series of
connected transactions, out of which the action
arose." Id. (quoting Restatement (Second) of
Judgments sec. 24(1) (1982)). "What factual
grouping constitutes a ’transaction,’ and what
groupings constitute a ’series,’ are to be
determined pragmatically, giving weight to such
considerations as whether the facts are related
in time, space, origin, or motivation, whether
they form a convenient trial unit, and whether
their treatment conforms to the parties’
expectations or business understanding or usage."
Id. (quoting Restatement (Second) of Judgments
sec. 24(2) (1982))./9

  In this case, it is true that the Bars’ duty to
abide by the Adult Use Ordinance was not part of
the particular "transaction" that prompted them
to file their state action; the Bars evidently
filed that case because Cicero had repealed the
late night (Class F) liquor license provision and
because Cicero was requiring the Bars to obtain
an Entertainment License under Section 5-9. But
when they filed the state action, the Bars
clearly knew that the Adult Use Ordinance also
regulated the activities in which they wanted to
engage; indeed, they specifically discussed it in
paragraph 25 of their state court complaint.
Moreover, the Bars were parties to a settlement
agreement which--if it did not precisely include
their obligation to comply with the Adult Use
Ordinance--at the very least thoroughly informed
the Bars of exactly what their obligations were
under it (including by providing photographs of
suitable attire and a complete copy of the
ordinance itself). It is also important to note
that the Bars are arguing that the Adult Use
Ordinance is facially unconstitutional. See
Initial Appellate Brief at 13. They do not point
to facts subsequent to the agreement (in other
words, there is no subsequent "transaction")
which are crucial to the Bars’ ability to
challenge that ordinance. The Bars do not contend
that Cicero applied the Adult Use Ordinance to
them after they entered into the agreement in a
way that was necessary to their ability to
challenge it, nor do they contend that without
such an application they would not have been able
to challenge the Adult Use Ordinance earlier,
either when they filed their state complaint (and
expressly referred to that ordinance) or when
they settled that case (wherein they extensively
discussed that ordinance).

  Thus, the Bars’ state court complaint and their
settlement of the case were really part of a
"series of connected transactions," River Park,
703 N.E.2d at 893, pertaining to their various
obligations under Cicero’s municipal code in
offering erotic entertainment. Given the
transactional test’s emphasis on pragmatism in
determining whether a claim could have (and thus
should have) been decided in a prior action, see
id. at 892-893, it is certainly fair to say that
any problems the Bars had with the Adult Use
Ordinance could have been adjudicated in the
state action. Litigating its facial
constitutionality along with the
constitutionality of Cicero’s repeal of the Class
F liquor license provision would have formed a
convenient trial unit. See id. at 893. The core
facts that would be relevant to both claims--the
Bars’ past practice of offering nude or semi-nude
erotic female dancing and their desire to
continue to do so--"are related in time, space,
origin, or motivation." See id. The relief the
Bars requested in both lawsuits was also
essentially the same (a declaration that they had
a First Amendment right to offer the erotic
entertainment that they had been providing).
Because the constitutionality of the Adult Use
Ordinance is a claim that could have easily been
brought when the Bars filed their state suit, or
could have just as easily been considered when
they settled that suit, the Bars would be
precluded by res judicata from now challenging
it.

III.   Conclusion

  Although the Bars attempt to argue that the
settlement agreement did not include their
agreement to comply with the Adult Use Ordinance,
they have waived that argument. But even if they
preserved it, as the district court found, their
challenge to the Adult Use Ordinance would be
barred by res judicata. All that being said,
however, under the Rooker-Feldman doctrine this
court lacks jurisdiction, and we therefore
dismiss the appeal.



/1 The order stated "That the Settlement Agreement,
attached hereto, incorporated herein and made a
part hereof marked Exhibit ’A,’ is hereby
approved and ratified by this Court, the terms
and provisions of which being ordered hereby".

/2 The Bars asserted that the settlement agreement
did not preclude their challenges to the Adult
Use Ordinance because: 1) as the district court
had held, the subject matter from the prior
action was different from the subject matter of
the present action; 2) there was nothing in the
settlement agreement that precluded the Bars from
instituting future litigation; 3) it was beyond
the power of the district court to force the Bars
to comply with that agreement (if Cicero wanted
to force compliance, it would have to return to
state court); and 4) if the district court held
that the Adult Use Ordinance was
unconstitutional, "that portion of the Agreement
which relies upon the provisions of the ’Town of
Cicero Adult Use Ordinance,’ by its very terms,
would become a nullity."

/3 Cicero argues that we do not have jurisdiction
over this appeal because it is an uncertified
interlocutory appeal from the denial of a motion
for summary judgment. Cicero is mistaken. The
district court’s ruling reconsidered its denial
of Cicero’s motion to dismiss, and its entry of
judgment in Cicero’s favor disposes of all the
claims of all the parties in this action. This
case is thus properly before us. See 28 U.S.C.
sec. 1291; H.K. Mallak, Inc. v. Fairfield FMC
Corp., 209 F.3d 960, 962 (7th Cir. 2000); United
States v. Davenport, 106 F.3d 1333, 1334-35 (7th
Cir. 1997).

/4 Cicero attached to its motion to dismiss the
state court order of dismissal and accompanying
settlement agreement. The district court relied
upon these exhibits in reconsidering Cicero’s
motion. We nevertheless view the district court
as dismissing the Bars’ claims, rather than
entering summary judgment against them, see Fed.
R. Civ. P. 12(b), because the district court
could take judicial notice of the state court
order. See Henson v. CSC Credit Serv., 29 F.3d
280, 284 (7th Cir. 1994); Mandarino v. Pollard,
718 F.2d 845, 849 (7th Cir. 1983). In any event,
the standard of review would be the same. Compare
Roboserve, Inc. v. Kato Kagaku Co., Ltd., 121
F.3d 1027, 1034 (7th Cir. 1997) (summary judgment
on grounds of res judicata is reviewed de novo)
with Brzostowski v. Laidlow Waste Syst., Inc., 49
F.3d 337, 338 (7th Cir. 1995) (dismissal of case
on grounds of res judicata is reviewed de novo).
/5 The state court approved settlement agreement is
a judgment or decision for purposes of the
Rooker-Feldman doctrine. See id. at 508-512
(Rooker-Feldman doctrine applied to court-
approved settlement).

/6 A state court judgment that is void ab initio due
to the state court’s lack of jurisdiction has
been held to be an exception to the Rooker-
Feldman doctrine. See In re James, 940 F.2d 46,
52 (3d Cir. 1991) (stating that federal court may
review state court judgment when state court
lacked personal or subject matter jurisdiction);
In re Ferren, 203 F.3d 559, 560 (8th Cir. 2000)
(declining to create void ab initio exception to
Rooker-Feldman doctrine when state court
allegedly interfered with bankruptcy court
jurisdiction but noting split among bankruptcy
appellate panels). The Bars do not, however,
contend that the state court lacked jurisdiction
over them or over the subject matter of their
action; rather, they contend that the state court
erred in adopting and approving an agreement that
is allegedly unconstitutional. Such a situation,
even if true, is plainly one where Rooker-Feldman
bars our review. See Remer, 205 F.3d at 996 ("The
Rooker-Feldman doctrine precludes federal
jurisdiction . . . no matter how erroneous or
unconstitutional the state court judgment may be
. . . ."); Kamilewicz, 92 F.3d at 510 (same).

/7 Indeed, the Bars more than once implicitly argued
the opposite to the district judge. See Summary
Judgment Reply at 2 (arguing that whether they
violated a settlement agreement from another case
is irrelevant to their ability now to challenge
the Adult Use Ordinance); id. at 7 (arguing that
it is beyond the power of the district court to
force the Bars to comply with the agreement and
that if Cicero wanted to force compliance, it
would have to return to state court). The most
glaring of these arguments was the Bars’
contention that if the district court declared
the Adult Use Ordinance to be unconstitutional,
"that portion of the Agreement which relies upon
the provisions of the ’Town of Cicero Adult Use
Ordinance,’ by its very terms, would become a
nullity." Id. at 7-8 (emphasis added). This is
much different from arguing, as the Bars now do,
that they never agreed to abide by that ordinance
in the first place. See Gibson v. West, 201 F.3d
990, 992 (7th Cir. 2000) (previously arguing
opposite premise belied the notion that plaintiff
preserved the argument).
/8 This parsing also seems to contradict what the
Bars told us at oral argument, where they
appeared to acknowledge that they did agree to
abide by the Adult Use Ordinance ("The only
difficulty here is the defendant’s claim that our
agreement, the plaintiffs’ agreement, in state
court to comply with Cicero’s laws, which
included the Adult Use Law, although not enforced
against plaintiffs, was somehow res judicata, in
that our case in federal court deals with the
Adult Use Law and in state court the Adult Use
Law, I would say, was tangentially brought up.");
("If they did agree to comply with the Cicero
laws, which I don’t deny that they did, they were
not aware or it was not at issue, whether or not
the Adult Use Law was constitutional or not;
we’re only talking about the liquor law and the
entertainment law which they essentially agreed
to."); ("They agreed clearly to comply with these
laws, but I think that implied in their agreement
is that the laws be constitutional.").

/9 The Illinois Supreme Court noted that the
"Restatement further provides that a claim is
extinguished under these principles, ’even though
the plaintiff is prepared in the second action
(1) To present evidence or grounds or theories of
the case not presented in the first action, or
(2) To seek remedies or forms of relief not
demanded in the first action.’" Id. (quoting
Restatement (Second) of Judgments sec. 25
(1982)).
