Empress Casino Joliet Corpora v. John Johnston
2014 U.S. App. LEXIS 15713
7th Cir.2014Background
- Illinois legalized riverboat gambling in 1990; horseracing industry declines prompting 2006 and 2008 Acts imposing a 3% casino tax for horse industry funding.
- The 2006 Act targeted large northern Illinois casinos and was followed by political pressure and campaign donations benefiting the governor.
- The 2008 Act renewed the tax; delays in signing prompted accusations of quid pro quo to obtain donations.
- Casinos (Empress entities) sued in federal court under RICO alleging bribery to secure enactment of both Acts.
- State racing interests (Racetracks) intervened in state actions; court previously ruled on immunity and tax injunction issues.
- District court granted summary judgment on proximate-cause for 06 Act but found triable issues for 08 Act; appellate court remanded for proximate-cause analysis of the 08 Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars the Casinos’ claims | Casinos rely on prior state-action outcomes | Racetracks contend identity of cause of action | Res judicata does not bar the claims; different causes of action. |
| Proximate cause for the 06 Act claims | Bribery coerced legislation harming Casinos | No admissible proof of bribery or coercive influence | Summary judgment upheld for Racetracks on 06 Act claims. |
| Proximate cause for the 08 Act claims | Bribery led to governor's signature and injury to Casinos | Link between bribe and signature too attenuated or not proven | There is evidence supporting proximate cause; reversal warranted for 08 Act claims. |
| Casinos’ standing to sue under RICO | Casinos are direct injury victims, not general taxpayers | Injury claimed was derivative or general | Casinos have standing under Article III for 08 Act claims. |
| Scope of RICO proximate-cause requirement post-Lexmark | Traditional standing limitations do not bar the suit | Standing constraints apply | Lexmark does not bar Casinos’ RICO proximate-cause theory for 08 Act. |
Key Cases Cited
- Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (U.S. 2006) (direct injury requirement; proximate cause focus in RICO)
- Bridge v. Phx. Bond & Indem. Co., 553 U.S. 639 (U.S. 2008) (direct relation between injury and conduct; proximate cause standard)
- Hemi Grp., LLC v. City of New York, N.Y., 559 U.S. 1 (U.S. 2010) (directness of injury; anti-trust/RICO proximate-cause guidance)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (S. Ct. 2014) (standing; prudential standing rejected; statutory interpretation of standing)
- Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479 (U.S. 1985) (RICO injury requirement; framework for recovery)
- Holmes v. Securities Inv. Prot. Corp., 503 U.S. 258 (U.S. 1992) (RICO proximate cause and direct relation principles)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standing requirements; injury in fact)
- McCormick v. United States, 500 U.S. 257 (U.S. 1991) (standing and injury in campaign/contribution context)