Thomas Edward Martin, who owned a metal-working company, withdrew funds from his employer-sponsored 401(k) plan in 2010 and 2013. He was subsequently indicted in Illinois state court for theft and wire fraud. During his 2019 criminal trial, the prosecutor was John Greenwood, and the plan administrator, Mary Jo Stvan, testified on behalf of the prosecution. Martin was convicted and sentenced to 30 months' probation. In 2024, Martin filed a sprawling federal complaint against Greenwood, Stvan, and the plan's successor entity. He asserted three claims: an interpleader action seeking a declaration that the stolen money was his property; a Section 1983 claim alleging that Stvan provided false testimony at Greenwood's request; and a state-law claim for breach of fiduciary duty. The district court dismissed all claims, ruling that the interpleader and injunctive relief requests were barred by the Rooker-Feldman doctrine, the damages claim was time-barred, and the state-law claim lacked diversity jurisdiction.
The Seventh Circuit addressed each claim separately. First, regarding the interpleader claim, the court rejected Martin's argument that the Rooker-Feldman doctrine applied. Instead, the court found the claim failed for lack of a justiciable controversy. Under Seventh Circuit precedent, interpleader requires a credible threat of competing liability from multiple parties. Martin conceded that his former employees, the purported claimants, had not asserted any claims against him and did not expect to do so. Consequently, there was no actual controversy to resolve. However, the court noted that the district court incorrectly dismissed this claim with prejudice. Because the lack of controversy might be cured if claimants later appear, the court modified the judgment to dismiss the interpleader claim without prejudice. Second, the court affirmed the dismissal of the Section 1983 damages claim. Martin argued that the five-year statute of limitations for fraudulent concealment should apply. The court clarified that the statute of limitations for Section 1983 claims is determined by the general personal injury statute of the forum state. In Illinois, that period is two years. Since Martin's claim was filed well beyond that window, it was time-barred. Third, the court upheld the dismissal of the state-law breach of fiduciary duty claim. The district court had declined to exercise supplemental jurisdiction after dismissing the federal claims. The appellate court agreed, noting that Martin failed to meet his burden of alleging complete diversity of citizenship because his complaint did not specify Stvan's citizenship. Finally, the court rejected Martin's civil rights allegations regarding false testimony, implicitly upholding the lower court's dismissal of those claims as barred by the statute of limitations or the Rooker-Feldman doctrine.
The decision limits the ability of criminal defendants to sue prosecutors and witnesses for civil rights violations after their convictions are finalized, particularly when the claims are time-barred or lack a justiciable controversy. The modification of the interpleader dismissal to be without prejudice leaves a narrow path for Martin to refile that specific claim if and when other parties assert competing claims to the funds. However, the Section 1983 damages claim and the state-law fiduciary claim remain closed. The ruling reinforces the strict application of the two-year statute of limitations for Section 1983 claims in Illinois and clarifies that interpleader jurisdiction requires an actual threat of multiple liability, not a hypothetical one.
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