Taylor v. Salvation Army Nat'l Corp.

110 F.4th 1017

Darrell TAYLOR, et al., Plaintiffs-Appellants, v. The SALVATION ARMY NATIONAL CORPORATION and Salvation Army d/b/a Central Territorial of the Salvation Army, Defendants-Appellees.

No. 23-1218

United States Court of Appeals, Seventh Circuit

Argued November 29, 2023

Decided August 6, 2024

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:21-cv-06105 — John Robert Blakey, Judge.

Jennifer Bennett, Attorney, Gupta Wessler LLP, San Francisco, CA, Mariyam Hussain, Justice Catalyst Law, New York, NY, for Plaintiff-Appellant Darrell Taylor, Charles Lucas, Kevin Lewis, Darrell Burkhart, Leevertis Page, individually and on behalf of all others similarly situated.

Amy M. Gibson, Attorney, Aronberg Goldgehn Davis & Garmisa, Chicago, IL, Thomas Peter Gies, Attorney, Daniel W. Wolff, Attorney, Crowell & Moring LLP, Washington, DC, for Defendant-Appellee.

Before Ripple, Scudder, and Jackson-Akiwumi, Circuit Judges.

Ripple, Circuit Judge.

The Salvation Army operates residential rehabilitation centers for, in its words, "adults struggling with life's spiritual and social challenges."¹ Some individuals enroll to deal with problems such as homelessness or substance abuse; others are referred to the centers by courts or parole or probation departments. Participants receive food, clothing, and housing for the duration of their stay and are required to work approximately forty hours per week for the Salvation Army. Although the Salvation Army characterizes that activity as "work therapy," the plaintiffs here—five former participants in the rehabilitation program—contend that the work is, in reality, forced labor. Those former participants brought this action, claiming that the Salvation Army subjected them to forced labor in violation of federal law. The Salvation Army moved to dismiss the plaintiffs' claims, and the district court granted that motion.

We affirm the judgment of the district court, although, on some issues, our analysis differs from that of the district court. At the outset, the Rooker-Feldman doctrine does not bar the claims brought by the plaintiffs who were on parole or probation at the time of their participation (the "justice-referred plaintiffs"), because those plaintiffs do not seek what in substance would be appellate review of any state-court judgments. Their claims fail on the merits, however, because they participated in the Salvation Army's program while subject to criminal sentences that seriously constrained their liberty—a fact with which they have not come to grips in this litigation. The other plaintiffs (the "walk-in plaintiffs") fare no better. Those plaintiffs were free to leave at any time, and the Salvation Army was entitled to condition its provision of food, housing, and clothing to them on their continued satisfactory participation in the program. Finally, the district court correctly denied leave to amend. The plaintiffs' proposed second amended complaint, like their first amended complaint, did not contain plausible allegations indicating that the Salvation Army violated the forced labor provisions at issue in this case.

I BACKGROUND

A

Because this case comes to us on the dismissal of the complaint by the district court, we assume, for purposes of this appeal, that the well-pleaded factual allegations in that complaint are true. See Martin v. Haling, 94 F.4th 667, 671 (7th Cir. 2024). Those allegations form the basis of this rendition of the facts.

The Salvation Army is one of the largest charities in the world. It operates in the United States through a national organization, Salvation Army National Corporation ("Salvation Army National"), and four territorial organizations. One such territorial organization, which we will call Salvation Army Central Territory, runs the organization's operations in eleven states across the Midwest.²

As we noted in the introductory paragraph, the Salvation Army operates residential rehabilitation programs for individuals seeking spiritual, emotional, and social assistance. Many participants enroll voluntarily in the rehabilitation programs because of problems such as homelessness and substance abuse. Other individuals are on parole or probation and are referred to the programs by courts or parole or probation departments. There is no charge for enrollment, and participants receive food, clothing, and housing from the Salvation Army for the duration of the program. Each participant must complete at least forty hours per week of what the Salvation Army terms "work therapy." This activity can include cooking, washing dishes, bussing tables, shoveling snow, loading and unloading donations from trucks, working in stockrooms and warehouses, or doing other work for the Salvation Army's thrift stores. Participants receive a small gratuity (between $1 and $25 per week) for the work, and they typically remain in the program for about six months.

The plaintiffs contend that the Salvation Army uses its rehabilitation programs not to rehabilitate people in need but instead as a "coercive labor arrangement that serves only the organization's financial interests."³ Their complaint alleges that the Salvation Army targets marginalized individuals with "nowhere else to go" in order to obtain a workforce that is reliant on the Salvation Army.⁴ According to the complaint, the Salvation Army cements this dependence in part through a "black-out period" spanning the first month to six weeks of the program. During that time, participants are prohibited from communicating with anyone outside the program. The Salvation Army also requires participants to assign temporarily any government benefits that they may be receiving, including Supplemental Nutrition Assistance Program ("SNAP") benefits,⁵ to the Salvation Army. The work that the participants are required to do is physically demanding and sometimes dangerous. If participants do not work fast enough during their regular work shifts, they are required to work overtime.

Salvation Army staff often remind the participants that if they leave the program, they will lose the food and shelter that the Salvation Army provides. Such reminders tend to have a strong effect on the participants, especially those who entered while they were experiencing some combination of poverty, food insecurity, and homelessness. The stakes are even higher for participants on parole and probation. Before enrolling, some of those participants are told by their parole or probation officers that staying at the Salvation Army for at least some time is mandatory. While these participants are in the program, the parole and probation officers stay in "constant contact" with Salvation Army staff.⁶ The staff tell the participants as much, threatening to reach out to the officers if they fail to complete their required labor in the time and manner dictated by the Salvation Army. Salvation Army staff even spell out the consequences that could follow from such reports, telling justice-referred participants that "if they [do] not follow the rules, including working, they [will] be kicked out of the program and [will] likely be incarcerated."⁷

B

Four former participants in the Salvation Army rehabilitation programs filed this action against Salvation Army National and Salvation Army Central Territory (collectively, "the Salvation Army"). The Salvation Army moved to dismiss their initial complaint on various grounds. Rather than respond to the motion to dismiss, these four former participants, along with one other former participant, filed an amended complaint. The five plaintiffs named in that amended complaint include three individuals who participated in the program while on parole or probation (the "justice-referred plaintiffs") and two who were not on parole or probation when they participated (the "walk-in plaintiffs"). The plaintiffs assert claims under 18 U.S.C. § 1589(a), which makes it unlawful to obtain labor by means of "serious harm," "threats of serious harm," or an "abuse or threatened abuse of law or legal process." They also assert claims under provisions that make it unlawful to knowingly benefit from participation in a venture that violates § 1589(a), see § 1589(b); to recruit a person for labor or services covered by § 1589(a), see § 1590(a); to attempt to violate § 1589(a), see § 1594(a); and to conspire to violate § 1589(a), see § 1594(b). The plaintiffs seek to represent classes of participants and former participants in Salvation Army rehabilitation programs located in the Salvation Army's Central Territory.

The Salvation Army filed a motion to dismiss the plaintiffs' first amended complaint, and the district court granted that motion. The district court first held that the plaintiffs had Article III standing. It reasoned that they had alleged an injury in fact (forced labor) fairly traceable to the Salvation Army's conduct (causing plaintiffs to work through allegedly unlawful threats) that can be redressed by the court (through a damages award).

The district court then considered the applicability of the Rooker-Feldman doctrine to the claims brought by the justice-referred plaintiffs. The court noted the allegation that justice-referred participants are generally referred to the adult rehabilitation programs "by court order or as a condition of probation or parole."⁸ The district court seemed to discern from that allegation that those plaintiffs participated "because a state court order compelled them to do so."⁹ From there, the district court concluded that it could not redress their injuries "without overturning the state court's orders that required them to participate" in the rehabilitation programs.¹⁰ The district court accordingly dismissed the justice-referred plaintiffs' claims on Rooker-Feldman grounds.

The district court then turned to the claims brought by the walk-in plaintiffs. It reasoned that the threats on which the walk-in plaintiffs relied were not...