Jane Doe JJ v. USA Gymnastics, No. 21-2916 (7th Cir. 2022)
Annotate this Case
Justia Opinion Summary
Want to stay in the know about new opinions from the Seventh Circuit US Court of Appeals?
Sign up for free summaries delivered directly to your inbox. Learn More ›
You already receive new opinion summaries from Seventh Circuit US Court of Appeals. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here.
During a decade as a member of USA Gymnastics, J.J. was one of the hundreds of gymnasts sexually assaulted by Larry Nassar, the organization’s physician. In response to the claims based on Nassar’s conduct, USA Gymnastics filed for bankruptcy. The bankruptcy court set a deadline for filing proofs of claim. USA Gymnastics mailed notices to all known survivors who had filed or threatened to file lawsuits, had reported abuse, had entered into a settlement agreement, or had received payment as a result of an allegation of abuse--more than 1,300 individuals. USA Gymnastics also emailed copies of the notice to more than 360,000 current and former USA Gymnastics members, and placed information about the bar date on its website, social media pages, in USA Today, and in gymnastics journals, podcasts, and websites J.J. did not receive actual notice and filed her proof of claim five months late.
The bankruptcy court treated her claim as untimely. The district court and Seventh Circuit affirmed. J.J. argued that she was entitled to actual notice; she claimed USA Gymnastics should have known that she was a potential claimant because it needed to retain medical records under Michigan law and should have known that she had seen Nassar for medical care. The court found no evidence that USA Gymnastics had these records; J.J.’s argument that Michigan law required retention of any relevant documents “is dubious.”
Download PDF
In the United States Court of Appeals For the Seventh Circuit ____________________ No. 21-2916 IN RE: USA GYMNASTICS, * Debtor. JANE DOE J.J., Creditor-Appellant, v. WILLIAM L. BETTINELLI, † Party-in-Interest-Appellee. ____________________ Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:20-cv-2507 — Sarah Evans Barker, Judge. ____________________ ARGUED JUNE 7, 2022 — DECIDED JULY 18, 2022 ____________________ * † USA Gymnastics is not participating in this appeal. We granted a motion substituting William L. Bettinelli, the Settlement Trustee of the USA Gymnastics Trust, for the Additional Tort Claimants Committee of Sexual Abuse Survivors, an interested party. See Fed. R. App. P. 43(b). 2 No. 21-2916 Before HAMILTON, KIRSCH, and JACKSON-AKIWUMI, Circuit Judges. KIRSCH, Circuit Judge. During the decade that she was a member of USA Gymnastics, Jane Doe J.J. was one of the hundreds of gymnasts sexually assaulted by Larry Nassar, a physician for the organization. In response to the overwhelming number of claims against it based on Nassar’s conduct, USA Gymnastics led for bankruptcy. The bankruptcy court set a deadline for any claimant to le a proof of claim, but J.J. did not receive actual notice of this deadline and led her proof of claim ve months late. The bankruptcy court treated her claim as untimely, and the district court a rmed. On appeal to this court, J.J. argues that she was entitled to actual notice because USA Gymnastics should have known that she was a potential claimant. According to J.J., USA Gymnastics needed to retain medical records under Michigan law and thus should have known that she had been seen by Nassar for medical care. But we lack any evidence that USA Gymnastics had these records, and her argument that Michigan law required USA Gymnastics’ retention of any relevant documents is dubious. We therefore a rm. I From the ages of 7 to 17, J.J. competed as a member of USA Gymnastics. During this time, Nassar acted as J.J.’s physician and sexually assaulted her. Important for this appeal, the record does not disclose that USA Gymnastics had access to or possession of J.J.’s medical records showing her visits with Nassar, as J.J.’s counsel conceded at oral argument. In 2018, USA Gymnastics led for Chapter 11 bankruptcy. The bankruptcy court set a deadline of April 2019 for all No. 21-2916 3 claimants, including sexual-assault survivors, to le a proof of claim. USA Gymnastics mailed notices to individuals it viewed as potential claimants, including, among others: all known survivors who had led or threatened to le lawsuits against USA Gymnastics alleging sexual abuse, had reported abuse to USA Gymnastics, had entered into a settlement agreement with USA Gymnastics stemming from allegations of abuse, or had received payment from USA Gymnastics as a result of an allegation of abuse. This amounted to more than 1,300 individuals. USA Gymnastics also emailed copies of the notice to more than 360,000 current and former members of the organization. Beyond these mailings, USA Gymnastics executed a constructive-notice campaign. It placed information about the bar date on its website, its social media pages, in USA Today, and in gymnastics journals, podcasts, and websites. J.J. did not learn about the bar deadline until after it had passed. After telling her parents that she had been assaulted by Nassar, she retained legal counsel, who helped her le a proof of claim. By the time she led her proof of claim, it was ve months late. J.J. moved for the bankruptcy court to treat her claim as timely. As relevant here, she argued that the court should treat her claim as timely because she was entitled to actual notice. The pertinent body appointed to represent sexual-assault claimants’ interests—the Additional Tort Claimants Committee of Sexual Abuse Survivors—objected to J.J.’s request. It contended that J.J. was entitled only to constructive notice, which she had received through USA Gymnastics’ media campaigns. 4 No. 21-2916 The bankruptcy court agreed with the Committee’s argument and denied J.J.’s motion, nding her entitled only to constructive—rather than actual—notice. The district court a rmed, and J.J. has appealed. II J.J. argues that she was entitled to actual notice and that the courts below erred in holding otherwise. We review the bankruptcy court’s factual ndings for clear error and the legal conclusions of both the bankruptcy and district courts de novo. In re Dimas, 14 F.4th 634, 639–40 (7th Cir. 2021). Creditors must receive adequate notice before their claims can be discharged in bankruptcy. See Fogel v. Zell, 221 F.3d 955, 962–63 (7th Cir. 2000) (citing Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314, 318 (1950)); Dahlin v. Lyondell Chem. Co., 881 F.3d 599, 604 (8th Cir. 2018). A notice’s adequacy generally depends on whether a creditor is reasonably ascertainable. See Fogel, 221 F.3d at 963; Tulsa Pro. Collection Servs., Inc. v. Pope, 485 U.S. 478, 489–90 (1988). If so, the creditor is entitled to actual notice; if not, the creditor is typically entitled only to constructive notice. See Fogel, 221 F.3d at 963 (“If his name and address are reasonably ascertainable, he is entitled to have that information sent directly to him, but if not, then publication of the information in the newspaper or other periodical that he’s most likely to see is permitted.”); Dahlin, 881 F.3d at 604. A creditor quali es as reasonably ascertainable if the debtor could uncover the creditor’s claim and identity using only “reasonably diligent e orts.” Tulsa Pro. Collection Servs., Inc., 485 U.S. at 490 (quoting Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 798 n.4 (1983)); see In re Placid Oil Co., No. 21-2916 5 753 F.3d 151, 154–55 (5th Cir. 2014) (framing the question as whether the debtor possesses “some speci c information … reasonably suggest[ing] both the claim for which the debtor may be liable and the entity to whom [the debtor] would be liable”) (citation omitted). In general, a creditor is reasonably ascertainable only if the debtor has information about the creditor’s claim in its possession. See Dahlin, 881 F.3d at 606 (citing Chemetron Corp. v. Jones, 72 F.3d 341, 346–47 (3d Cir. 1995)). J.J. contends that her identity as a tort victim was reasonably ascertainable to USA Gymnastics. But J.J. fails to point to any evidence that USA Gymnastics possessed medical documentation of her interactions with Nassar. See Dahlin, 881 F.3d at 606 (whether a creditor is reasonably ascertainable generally depends only on information in the debtor’s own books and records). That shortcoming doesn’t foreclose her argument, J.J. argues, because USA Gymnastics had a responsibility to know that Nassar had seen her for medical treatment under Michigan’s recordkeeping requirements. See In re Motors Liquidation Co., 829 F.3d 135, 159–60 (2d Cir. 2016) (creditors considered reasonably ascertainable based on unambiguous federal record-keeping requirement). But we do not nd such a clear legal obligation under Michigan law. The only statute she cites, Mich. Comp. Laws § 333.16213(1), applies solely to “natural person[s],” id. § 333.1105(1); see id. § 333.16101(2), which USA Gymnastics is not. The only other potentially relevant Michigan recordkeeping statute we’ve found (which was not cited by J.J.) applies to “health facilit[ies] or agenc[ies],” id. § 333.20175(1), and de nes those terms with an enumerated list of speci c categories of entities, see id. § 333.20106(1). USA Gymnastics does not appear to t within any of those categories. Cf. Kuznar v. Raksha Corp., 750 6 No. 21-2916 N.W.2d 121, 126–27 (Mich. 2008) (holding that a pharmacy is not a “health facility or agency”); Sabbagh v. Hamilton Psych. Servs., PLC, 941 N.W.2d 685, 694–95 (Mich. Ct. App. 2019) (holding that a psychological practice and a human resources company fail to satisfy the statute’s de nition of “health facility or agency”). Because J.J. has neither presented evidence that USA Gymnastics had records of her medical visits with Nassar nor shown that Michigan law required it to possess such records, we agree with the bankruptcy and district courts that J.J. was not a reasonably ascertainable creditor. She was thus entitled only to constructive notice, the su ciency of which she does not contest. AFFIRMED
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
