Empress Casino Joliet Corp. v. Blagojevich
638 F.3d 519
7th Cir.2011Background
- Two riverboat-casinos sue Blagojevich and Johnston alleging a pay-to-play scheme to influence Illinois gaming laws; the 2006 Act imposed a 3% surcharge into a segregated Horse Racing Equity Trust Fund disbursed to five racetracks within days of receipt.
- The 2006 Act and its 2008 extension created the Horse Racing Fund; funds are non-appropriated, segregated, and not usable for state expenses, with 60% for purses and 40% for racetrack operations.
- The casinos seek a RICO-conspiracy judgment against Blagojevich, Friends of Blagojevich, Johnston, and the racetracks, and a constructive trust on money unjustly enriched.
- The district court held Blagojevich lacked immunity, sustained RICO but dismissed the constructive-trust claim under the Tax Injunction Act as a tax; it maintained the TRO.
- The casinos sought preliminary injunction to preserve escrow funds; this Court reinstated the TRO pending appeal.
- This appeal challenges immunities, jurisdiction under the Tax Injunction Act, and the sufficiency of the constructive-trust claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Legislative immunity applies to Blagojevich in this RICO suit? | Casinos argue immunities do not apply to Blagojevich. | Blagojevich entitled to absolute legislative immunity for acts in legislative process. | Blagojevich has legislative immunity; remand to dismiss him. |
| Does the Tax Injunction Act bar a constructive trust on Horse Racing Fund proceeds? | Constructive trust should be allowed; not a tax issue. | Surcharge is a tax, thus TI Act bars relief. | TI Act does not bar; surcharge is regulatory fee, not a tax; constructive trust allowed. |
| Are res judicata/collateral estoppel or abstention controls applicable? | State judgments preclude federal relief; estoppel applies. | State judgments do not preclude federal claims; abstention not warranted. | Preclusion and abstention defenses rejected; case proceeds on merits. |
| Is the constructive-trust claim viable given proximate-causation requirements under RICO? | Conspiracy directly caused the casinos' injury. | Act of enacting Racing Acts was not sufficiently linked. | Constructive-trust claim survives; proximate causation satisfied. |
Key Cases Cited
- Tenney v. Brandhove, 341 U.S. 367 (1951) (establishes legislative immunity for functional legislative acts)
- Bogan v. Scott-Harris, 523 U.S. 44 (1998) (extends legislative immunity to state and local officials)
- Lake Country Estates, Inc. v. Tahoe Reg'l Planning Agency, 440 U.S. 391 (1979) (immunity extends to executive officials where acts are legislative in character)
- United States v. Gillock, 445 U.S. 360 (1980) (federal common-law immunity distinguished from Speech or Debate Clause)
- Thillens, Inc. v. Cmty. Currency Exch. Ass'n of Ill., Inc., 729 F.2d 1128 (7th Cir.1984) (extends legislative immunity to state officials for legislative acts despite misconduct claims)
- Chappell v. Robbins, 73 F.3d 918 (9th Cir.1996) (governor's immunity in RICO context for legislative-acts)