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United States Court of Appeals for the Seventh Circuit
June 7, 2022, Argued; July 18, 2022, Decided
[*776] 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 filed for bankruptcy. The bankruptcy court set a deadline for any claimant to file a proof of claim, but J.J. did not receive actual notice [**2] of this deadline and filed her proof of claim five months late. The bankruptcy court treated her claim as untimely, and the district court affirmed.
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 affirm.
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 filed for Chapter 11 bankruptcy. The bankruptcy court set a deadline of April 2019 for all claimants, including sexual-assault survivors, to file a proof of claim. [**3] USA Gymnastics mailed notices to individuals it viewed as potential claimants, including, among others: all known survivors who had filed or threatened to file 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.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
40 F.4th 775 *; 2022 U.S. App. LEXIS 19742 **
IN RE: USA GYMNASTICS,1 Debtor.JANE DOE J.J., Creditor-Appellant, v. WILLIAM L. BETTINELLI,2 Party-in-Interest-Appellee.
Prior History: [**1] Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:20-cv-2507 — Sarah Evans Barker, Judge.
Gymnastics, ascertainable, notice, claimant, records, bankruptcy court, actual notice
Bankruptcy Law, Judicial Review, Standards of Review, Clear Error Review, De Novo Standard of Review, Bankruptcy, Case Administration, Notice, Debtor Benefits & Duties, Debtor Duties