Gymnasts want to resume litigation over sex assault

A group of gymnasts who suffered sexual abuse at the hands of disgraced doctor Larry Nassar want to reopen their litigation that has been stayed by a bankruptcy court after more than a year of unsuccessful settlement discussions.

Panish Shea & Boyle LLP's Kevin Boyle and Jesse M. Creed sued USA Gymnastics and the U.S. Olympic Committee in 2018 in Los Angeles County Superior Court on behalf of several gymnasts who were assaulted for years while under Nassar's care. The disgraced doctor is serving a 120-year sentence in federal prison. Those cases were eventually removed to the Central and Northern District courts in California.

Soon after the lawsuits began piling up, USA Gymnastics filed for bankruptcy in the Southern District of Indiana, resulting in an automatic stay in the civil actions. The women agreed to a voluntary stay against the Olympic committee in May 2019 to see if settlement was achievable.

With no settlement in sight after more than 18 months, the women filed a notice to withdraw from the stay agreement earlier this month. The defendants had a right to extend that stay from the bankruptcy court to postpone the pending action in the Central District, but never did, according to Creed. Jane ED Doe v. Lawrence Nassar et al, 2:19-CV-167 (C.D. Cal., filed Jan. 8, 2019).

Now, the women want to reopen the litigation at least on the claims against the Olympic committee. Tasha Shwikert-Warren v. Nassar et al, 2:19-CV-161 (C.D. Cal., filed Jan. 8, 2019).

Defense counsel representing the Olympic Committee opposed the request, arguing the Indiana bankruptcy court ordered a settlement conference, which is expected to take place soon.

"With the exception of the four individuals represented by plaintiffs' counsel, no other plaintiffs have opted out of the stipulated stay," wrote Mitchell A. Kamin, partner at Covington & Burling LLP. "Lifting the stay here could jeopardize the settlement conference by triggering a race to the courthouse amongst the more than 500 other plaintiffs who have asserted claims in the bankruptcy proceeding."

Lifting the stay as to the Olympic Committee would result in litigating cases piecemeal, Kamin argued. The gymnastics committee must "be an active participant in this case so that the parties can test the complaint's allegations which, of course, cannot happen until the bankruptcy proceedings are complete," he added.

Boyle said USA Gymnastics and the Olympic Committee are completely separate entities and his clients were directly harmed by the committee. "These are not derivative claims," Boyle added.

The Olympic Committee sued its insurers for coverage of claims relating to the Nassar abuse in the Colorado District Court. The committee said the insurers stalled negotiation talks.

The bankruptcy court ordered the committee to participate in a settlement conference on Sept. 2.

"The reality is mediation and settlement discussions in the bankruptcy have come to a complete standstill," Creed wrote in his papers.

Neither Kamin nor the Olympic Committee could be reached for comment by press time Thursday.