UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION

LEROY JOHNSON, as Administrator of

the Shirley T. Sherrod MD PC Target

Benefit Pension Plan and Trust,

Plaintiff,

v.

MERRILL LYNCH, PIERCE, FENNER

& SMITH INCORPORATED,

Defendant.

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Case No. 12-cv-2545

Judge John W. Darrah

MEMORANDUM OPINION AND ORDER

 Defendant Merrill Lynch, Pierce, Fenner & Smith, Inc. (“Merrill Lynch”) moves

to dismiss the Amended Complaint filed by Plaintiff Leroy Johnson1

 (“Johnson”), as

Administrator of the Shirley T. Sherrod MD PC Target Benefit Pension Plan and Trust

(“the Plan”), pursuant to Federal Rule of Civil Procedure 12(b)(1), for lack of subjectmatter jurisdiction. For the reasons presented below, Defendant’s Motion to Dismiss is

granted. 

BACKGROUND

Johnson, as administrator of the Plan, filed suit against Merrill Lynch pursuant to

the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(3),

which provides that a civil action may be brought “by a participant, beneficiary, or

fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter

1

 In the original Complaint, filed on April 6, 2012, Shirley T. Sherrod was listed

as the Administrator of the Plan and the named plaintiff. Johnson succeeded 

Shirley T. Sherrod as the Plan Administrator on May 30, 2012. (Am. Compl. ¶ 5.) 

Johnson was named as the Administrator of the Plan in the Amended Complaint, filed on

June 8, 2012. 
or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress

such violations or (ii) to enforce any provisions of this subchapter or the terms of the

plan.” Johnson, as a fiduciary of the Plan, filed the Amended Complaint, alleging Merrill

Lynch, as the trustee or custodian of the Plan, refused “to allow any disposition of the

assets from its custody except to satisfy claims of creditors of the Plan sponsor or a Plan

participant.” (Am. Compl. ¶ 24.) Merrill Lynch filed a motion to dismiss the complaint

on the basis of the Rooker-Feldman doctrine and a lack of subject matter jurisdiction. A

court is permitted to take judicial notice of public record, such as court documents, which

forms the basis of the facts described below. See Papasan v. Allain, 478 U.S. 265, 268

n.1 (1986). 

On June 25, 2010, Judge John H. Gillis, Jr., a circuit court judge in Wayne

County, Michigan, entered summary judgment against Shirley T. Sherrod M.D.

(“Sherrod”) and Shirley T. Sherrod M.D., P.C., awarding $181,048.58 to the plaintiffs,

Physician Eye Care Associates of Garden City; Michael Sherman D.O.; and Michael

Sherman D.O., P.C. (“Sherman”), in a medical practice contractual dispute. (Mot. Ex. A,

Order Granting Plaintiffs’ Motion for Summary Disposition and Entry of Judgment in

Favor of Plaintiffs, June 25, 2010.) 

Merrill Lynch acts as custodian of the Plan, and holds Plan assets in a retirement

account administered by Johnson and previously administered by Sherrod. (Am. Compl.

¶¶ 6, 8.) Sherman served Merrill Lynch with a writ of garnishment against Sherrod on

October 12, 2010. (Mot. Ex. B, Request and Writ for Garnishment issued to Garnishee

Merrill Lynch, Oct. 12, 2010.) Merrill Lynch filed a garnishee disclosure on October 25,

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2010, and stated that certain accounts, such as Sherrod’s retirement account, were

generally exempt from garnishment. (Mot. Ex. D, Garnishee Disclosure, Oct. 25, 2010.) 

Thereafter, on February 4, 2011, Judge Gillis entered a “freeze order,” providing

that Sherrod, “as well as anyone (or any entity) acting for or on their behalf or in active

concert or participation with them, are prohibited from directly or indirectly selling,

transferring, assigning, destroying, concealing, encumbering, hypothecating, or otherwise

disposing of in any manner . . .” Sherrod’s assets. (Mot. Ex. E, Order Prohibiting ThirdPary [sic] Plaintiffs From Transferring or Otherwise Disposing of Assets, Feb. 4, 2011.)

(emphasis added). Sherman filed a motion, ordering Merrill Lynch to pay the judgment

due to him from Sherrod’s accounts; Wayne County Circuit Court Judge Gillis orally

granted this motion on October 21, 2011. (Mot. Ex. G, Transcript of Proceedings in Case

No. 08-014242-CK, Oct. 21, 2011.)

Sherrod posted an appeal bond from the Merrill Lynch account, which is

permitted by order of the Michigan Court of Appeals, and this bond stayed the

garnishment proceedings. (Mot. Ex. H, Court of Appeals, State of Michigan Order, Oct.

28, 2011.) On November 22, 2011, Sherrod moved to release the garnishment and

unfreeze her assets in light of the appeal bond she posted; this motion was denied by

Judge Gillis. (Mot. Ex. J, Order Denying Motion to Set Aside Order Freezing

Defendant’s Assets, Dec. 14, 2011.) Following this, on January 26, 2012, Sherrod filed

an appeal of Judge Gillis’s denial of her motion to unfreeze her assets. (Mot. Ex. K,

Defendants-Appellants’ Delayed Application for Leave to Appeal, Jan. 26, 2012.) 

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Merrill Lynch also filed a brief with the Michigan Court of Appeals in support of

Sherrod, arguing that the orders freezing Sherrod’s assets should be terminated.2 (Mot.

Ex. N, Merrill Lynch’s Resp. to Defendants’/Appellants’ and Plaintiffs’/Appellees’

Briefs on Appeal, May 15, 2012.)

On February 28, 2012, Merrill Lynch filed a motion in the Wayne County Circuit

Court, seeking a release of the freeze on Sherrod’s accounts held with Merrill Lynch. 

(Mot. Ex. L, Garnishee Defendant’s Motion to Release Freeze on Defendant Shirley T.

Sherrod’s Accounts Held With Garnishee Defendant and for Other Relief and Supporting

Brief, Feb. 28, 2012.) Sherrod, as administrator of the Plan, filed this case on April 6,

2012, in the Northern District of Illinois. Judge Gillis heard Merrill Lynch’s motion on

April 13, 2012. The record indicates that he intended to grant the motion; however,

Sherrod opposed the motion, arguing Judge Gillis lacked jurisdiction while her appeal

was pending. (Mot. Ex. P, Hrg. Transcript, April 13, 2012.) Therefore, Judge Gillis

denied Merrill Lynch’s motion to release the freeze on Sherrod’s accounts, pending the

outcome of Sherrod’s appeal. (Id.) 

Now, the Amended Complaint seeks to have judgment entered in favor of

Plaintiff (Johnson, Sherrod’s successor as administrator of the Plan) and to “[o]rder

Merrill Lynch to abide by Johnson’s directions regarding any disposition of Plan assets.” 

(Am. Compl. at 4.) Despite the freeze order in place in Wayne County, Michigan,

Plaintiff argues in the Amended Complaint that “[t]he state court order explicitly only

applies to assets of Sherrod personally, and assets of the Plan’s sponsor, but does not

2

 This brief was filed after the present litigation in the Northern District of Illinois

had commenced.

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state it applies to the Plan.” (Am. Compl. ¶ 16.) Therefore, Plaintiff seeks to have the

Plan’s assets disposed of in the manner he so directs under Plaintiff’s assumption that the

Wayne County freeze order is inapplicable to the Plan. As mentioned above, Merrill

Lynch moves to dismiss this Complaint for lack of subject-matter jurisdiction, arguing

that Merrill Lynch is not adverse to Plaintiff and that the Rooker-Feldman doctrine bars

Plaintiff’s claims. (Mot. at 1.) This Motion to Dismiss was fully briefed and is ripe for

ruling.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(1) allows a party to raise as a defense, by

motion, a federal court’s lack of subject-matter jurisdiction. “When reviewing a

dismissal for lack of subject-matter jurisdiction . . . the district court must accept as true

all well-pleaded factual allegations and draw all reasonable inferences in favor of the

plaintiff.” St. John’s United Church of Christ v. City of Chicago, 502 F.3d 616, 625 (7th

Cir. 2007) (quoting Long v. Shorebank Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999)). 

However, when a defendant challenges subject-matter jurisdiction, the plaintiff bears the

burden of establishing jurisdiction. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561

(1992) (Lujan). 

A challenge of standing is a challenge to a court’s subject-matter jurisdiction;

standing is an essential jurisdictional requirement. To establish standing, a plaintiff must

show: a violation of a concrete, particularized legally protected interest; a causal

relationship between the defendant’s conduct and the injury to the plaintiff, and an injury

which can be redressed if a court finds in the plaintiff's favor. Lujan, 504 U.S. at 560-61.

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The nonmoving party must support the basis of the jurisdiction with competent proof of

jurisdictional facts. Kontos v. U.S. Dep't of Labor, 826 F.2d 573, 576 (7th Cir. 1987). 

“When considering a motion that launches a factual attack against jurisdiction, ‘[t]he

district court may properly look beyond the jurisdictional allegations of the complaint

and view whatever evidence has been submitted on the issue to determine whether in fact

subject matter jurisdiction exists.’” Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d

440, 443 (7th Cir. 2009) (citations omitted). 

In evaluating standing, the emphasis “is on whether the party invoking federal

court jurisdiction has ‘a personal stake in the outcome of the controversy,’ and whether

the dispute touches upon the ‘legal relations of the parties having adverse legal

interests.’” O’Sullivan v. City of Chicago, 396 F.3d 843, 853 (7th Cir. 2005) (quoting

Flast v. Cohen, 392 U.S. 83, 101 (1968)). Therefore, in order for there to be a case or

controversy for the court to hear, “[u]nder Article III of the United States Constitution,

there must be an actual dispute between parties with adverse legal interests . . . .” 

Kawasaki Heavy Industries, Ltd. v. Bombardier Recreational Products, Inc., 660 F.3d

988, 999 (7th Cir. 2011). 

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ANALYSIS

Lack of Subject-Matter Jurisdiction

Merrill Lynch asserts that Plaintiff lacks Article III standing, a jurisdictional

requirement, because Merrill Lynch is not adverse to Plaintiff’s positions, because

Merrill Lynch does not oppose the unfreezing of the assets in the Plan’s Merrill Lynch

accounts. (Mot. at 9.) To the contrary, Merrill Lynch reasons, it submitted its own

motion in the Wayne County Circuit Court, seeking a release from the order freezing the

accounts. Merrill Lynch also filed an appellate brief in the Michigan Court of Appeals,

supporting Sherrod’s position that the retirement accounts were wrongly frozen. 

It is apparent from the actions taken by Merrill Lynch in the Wayne County

Circuit Court that Merrill Lynch’s position is aligned with that of Plaintiff; both parties

contend the freeze orders of the Michigan court should be terminated.3 In his response to

the Motion to Dismiss, Plaintiff argues that the assets of the Plan were not subject to the

freeze order, because the assets under the Plan are exempt. (Resp. at 6-7.) However, the

Michigan court asserted its jurisdiction over the Plan assets and ordered a freeze of those

assets, despite Plaintiff’s efforts to make those assets distinct from Sherrod’s other assets,

such as by naming a new administrator to the Plan. 

Merrill Lynch further asserts that the Rooker-Feldman doctrine is applicable in

this case. The Rooker-Feldman doctrine is a limit on federal jurisdiction, preventing

“lower federal courts from reviewing state-court judgments, over which only the United

States Supreme Court has federal appellate jurisdiction.” Commonwealth Plaza

3

 Merrill Lynch points out, as noted above, that Sherrod opposed Merrill Lynch’s

motion in the state court, which prevented the freeze from being terminated.

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Condominium Assoc. v. City of Chicago, 693 F.3d 743, 745 (7th Cir. 2012)

(Commonwealth) (quoting Crawford v. Countrywide Home Loans, Inc., 647 F.3d 642,

645 (7th Cir. 2011)). “This narrow doctrine deprives federal district and circuit courts of

jurisdiction to hear ‘cases brought by state-court losers complaining of injuries caused by

state-court judgments rendered before the district court proceedings commenced and

inviting district court review and rejection of those judgments.’” Id. (quoting Exxon

Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005)). Because of the

freeze order entered by the Wayne County Circuit Court, Merrill Lynch argues, this

Court lacks the jurisdiction to overturn or otherwise impede the Michigan court’s

authority or interfere with the appeal Sherrod filed in Michigan. (Mot. at 12.) Plaintiff

counters that Merrill Lynch’s reliance on the Rooker-Feldman doctrine is misplaced, as

the “doctrine is all but dead.” (Resp. at. 2.) However, the Seventh Circuit, while

drawing a distinction between the Rooker-Feldman doctrine and preclusion, has

continued to apply the Rooker-Feldman doctrine in cases where a litigant essentially

seeks a review of an opinion issued by a state court. See Commonwealth, 693 F.3d at

747-49; Bergquist v. Mann Bracken, LLP, 592 F.3d 816, 818 (7th Cir. 2010); Gilbert v.

Illinois State Board of Education, 591 F.3d 896, 899-901 (7th Cir. 2010). 

Therefore, the Rooker-Feldman doctrine is still directly applicable to this case. 

This Court does not have the authority to overturn the decision of a state court. 

Regardless of Plaintiff’s view that the assets of the Plan are outside the scope of the

Wayne County Circuit Court’s jurisdiction, that court has found those assets to be

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included in the order freezing Sherrod’s assets and, hence, within its jurisdiction.4

 (Mot.

Ex. P, Hrg. Transcript, April 13, 2012.) Here, Plaintiff’s alleged injury is caused by the

Michigan state court’s ruling regarding the freezing of assets. Thus, Plaintiff’s

Complaint lacks jurisdiction pursuant to the Rooker-Feldman bar. See Commonwealth,

693 F.3d at 746 (“Absent that state court ruling, plaintiffs would not have suffered the

alleged injury they are asking the federal courts to redress, and that is a clear symptom of

the Rooker-Feldman bar.”). Because Plaintiff’s claims are barred by the RookerFeldman doctrine and because the parties are not adverse, Merrill Lynch’s Motion to

Dismiss for lack of subject-matter jurisdiction is granted.

4

 The plain meaning of the freeze order clearly intends the Plan to be subject to

the order. “IT IS HEREBY ORDERED that third-party plaintiffs Shirley T. Sherrod,

M.D., and Shirley T. Sherrod, M.D., P.C., as well as anyone (or any entity) acting for or

on their behalf or in active concert or participation with them, are prohibited from

directly or indirectly selling, transferring, assigning, destroying, concealing,

encumbering, hypothecating, or otherwise disposing of in any manner the assets, real or

personal property, money, or things in action now held or hereafter acquired by or

becoming due to them, until further order of the Court.” (Mot. Ex. E, Order Prohibiting

Third-Pary [sic] Plaintiffs From Transferring or Otherwise Disposing of Assets, Feb. 4,

2011.)

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CONCLUSION

For the reasons set forth above, Merrill Lynch’s Motion to Dismiss pursuant to

Fed. R. Civ. P. 12(b)(1) for lack of subject-matter jurisdiction is granted, and Plaintiff’s

Complaint is dismissed without prejudice. Merrill Lynch’s motion for an award of fees

and costs pursuant to 28 U.S.C. § 1927 is denied. 

Date: November 28, 2012 ______________________________

JOHN W. DARRAH

United States District Court Judge

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