Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-15-02526/USCOURTS-ca7-15-02526-0/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 

---

In the 

United States Court of Appeals 

For the Seventh Circuit ____________________

No. 15‐2526

EMPRESS CASINO JOLIET CORP., et al.,

Plaintiffs‐Appellees,

v.

BALMORAL RACING CLUB, INC. and MAYWOOD PARK TROTTING

ASSOCIATION, INC.,

Defendants‐Appellants.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 09 C 3585 — Matthew F. Kennelly, Judge.

____________________

ARGUED JANUARY 12, 2016 — DECIDED AUGUST 2, 2016

____________________

Before WOOD, Chief Judge, and WILLIAMS and HAMILTON,

Circuit Judges.

HAMILTON, Circuit Judge. This appeal pits casinos against

racetracks in our circuit’s latest encounter with the Blago‐

jevich corruption scandal in Illinois. In 2008, John Johnston, a

horse racetrack executive, promised a $100,000 campaign con‐

tribution to then‐Governor Rod Blagojevich in exchange for

his signature on a bill to tax the largest casinos in Illinois for

Case: 15-2526 Document: 42 Filed: 08/02/2016 Pages: 37
2 No. 15‐2526

the direct benefit of the Illinois horseracing industry. After

Blagojevich’s corruption came to light, the casinos sued the

racetracks, alleging a conspiracy to violate the federal Racket‐

eer Influenced and Corrupt Organizations Act (“RICO”), 18

U.S.C. § 1961 et seq., and state‐law claims for civil conspiracy

and unjust enrichment. A jury awarded the casinos

$25,940,000 in damages, which was trebled under RICO to

$77,820,000. The racetracks argue on appeal that plaintiffs

failed to prove a RICO conspiracy, that the district court erred

by allowing plaintiffs to add the state‐law claims, and that

other asserted errors warrant a new trial.

We affirm the district court in all respects except one: the

jury did not have legally sufficient evidence to support a ver‐

dict finding a conspiracy to engage in a “pattern” of racket‐

eering activity, as required for liability on a RICO conspiracy

theory. The casinos are still entitled to the $25,940,000 in dam‐

ages on the state‐law claims, but not to have those damages

trebled under RICO.

We first review the factual and procedural background of

this case. Second, we examine the sufficiency of the evidence

of an illegal agreement and a pattern of racketeering activity.

Third, we address the late amendment to the complaint to add

the state‐law claims. Finally, we examine several claims of

trial error.

I. Factual and Procedural Background

After Illinois legalized riverboat casino gambling in the

early 1990s, see 230 ILCS 10/3, the Illinois horseracing indus‐

try wanted to make up for the business it claimed to have lost

as a result. It turned to state government for help. In 2006, Il‐

linois enacted H.B. 1918, which we refer to as the 2006 Act. It

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No. 15‐2526 3

required the four largest casinos in the state (casinos earning

more than $2 million in adjusted gross receipts in 2004) to pay

three percent of their daily adjusted gross receipts into a trust

fund for the benefit of the horseracing industry. 2006 Ill. Legis.

Serv. P.A. 94‐804 (H.B. 1918). The 2006 Act contained a “sun‐

set” provision to expire at the end of May 2008.

This appeal focuses on the racetracks’ effort to renew the

law in what we call the 2008 Act. The Johnston family owns

several businesses, including shares in the racetrack defend‐

ants Maywood Park Trotting Association, Inc. and Balmoral

Racing Club, Inc. John Johnston was an executive at the two

defendant racetracks and one of the beneficiaries of the family

trust that partially owned the tracks. In May 2007, Johnston

hired Alonzo Monk as a lobbyist for the racetracks. Monk had

been a longtime aide to Governor Rod Blagojevich and had

served as Blagojevich’s chief of staff and campaign manager

before starting his own lobbying and consulting business.

Monk worked to renew the 2006 Act’s horseracing subsidy

that was to sunset. The casinos allege that this effort involved

a quid pro quo agreement between Blagojevich and Johnston to

trade a $100,000 campaign contribution for the governor’s sig‐

nature on the 2008 bill. The primary evidence at issue in this

appeal is a series of meetings and phone calls among John‐

ston, Monk, and Blagojevich. The federal government re‐

corded many of the calls and conversations during a broader

criminal investigation of Blagojevich. We lay out the details

below in our discussion of the sufficiency of evidence. In

broad terms, in April 2008, Johnston met with Blagojevich at

the governor’s campaign fundraising office. The two dis‐

cussed the expiration of the 2006 Act. At the end of the meet‐

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4 No. 15‐2526

ing Blagojevich brought up Johnston’s support for his cam‐

paign. There is no evidence that Johnston agreed to make a

contribution at that time, and no payment was made then.

That meeting did not succeed in securing the 2006 Act’s re‐

newal. At the end of May 2008, the 2006 Act expired.

In August or September 2008, Johnston agreed to make a

$100,000 contribution to Blagojevich’s campaign, but he did

not pay immediately. A number of conversations followed in‐

volving Monk, Johnston, Governor Blagojevich, and his

brother Rob.

On November 20, 2008, the legislature passed the 2008

Act, which was presented to Governor Blagojevich on No‐

vember 24 for his signature. The governor did not sign imme‐

diately, but there followed a number of conversations among

Blagojevich, Monk, and Johnston. As we explain below, on

December 3, 2008, according to Monk’s testimony, the quid pro

quo agreement was pinned down and Johnston committed to

make the contribution in return for the governor’s signature.  

Blagojevich was arrested on December 9. On December 15,

while on pretrial release and before he was impeached and

removed from office, he signed the 2008 Act. Johnston never

made the promised contribution. Monk pled guilty to con‐

spiring with Blagojevich to solicit a bribe from Johnston. John‐

ston received immunity from prosecution and testified before

a grand jury and at Blagojevich’s criminal trials.

The casinos subject to the tax sued Johnston, Balmoral,

Maywood, and other defendants no longer involved in the

case (for convenience we refer to defendant‐appellants as “the

racetracks”). The casinos alleged that the racetracks had vio‐

lated 18 U.S.C. § 1962(d) by conspiring to violate RICO. In

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No. 15‐2526 5

2013, the district court granted summary judgment in favor of

the racetracks, concluding that the casinos had not offered ev‐

idence sufficient to show that the racetracks’ alleged bribes

proximately caused the casinos’ losses pursuant to the 2006

and 2008 tax legislation. Empress Casino Joliet Corp. v. Blago‐

jevich, No. 09 C 3585, 2013 WL 4478741 (N.D. Ill. Aug. 19,

2013).  

We affirmed summary judgment regarding the 2006 Act

but reversed regarding the 2008 Act. Empress Casino Joliet

Corp. v. Johnston, 763 F.3d 723, 728 (7th Cir. 2014) (Empress Ca‐

sino III).1 We held that the racetracks had not presented evi‐

dence sufficient to survive summary judgment that campaign

contributions to Blagojevich had proximately caused the leg‐

islature’s passage of the 2006 Act or that the racetracks bribed

Blagojevich to sign the 2006 Act. Id. at 729, 731. But on the 2008

Act, we held there was sufficient evidence that the racetracks

formed a quid pro quo agreement with Blagojevich that caused

him to sign the Act. Id. at 731–33. In allowing claims on the

2008 Act to go forward, we stressed that the only RICO ele‐

ment we were deciding was the issue of proximate cause, not‐

ing in particular that the pattern requirement remained open.

Id. at 734–35.

                                                 

1 See also Empress Casino Joliet Corp. v. Blagojevich, 638 F.3d 519 (7th Cir.

2011) (Empress Casino I) (legislative immunity for Blagojevich), opinion va‐

cated in part, 649 F.3d 799 (7th Cir. 2011), and Empress Casino Joliet Corp. v.

Balmoral Racing Club, Inc., 651 F.3d 722 (7th Cir. 2011) (en banc) (Empress

Casino II) (Tax Injunction Act barred constructive trust claim). The casinos

have also unsuccessfully challenged the constitutionality of the 2006 and

2008 Acts in state court. Empress Casino Joliet Corp. v. Giannoulias, 896

N.E.2d 277 (Ill. 2008); Empress Casino Joliet Corp. v. Giannoulias, 942 N.E.2d

783 (Ill. App. 2011).

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6 No. 15‐2526

After we reversed summary judgment on the 2008 Act, the

district court allowed plaintiffs to amend their complaint,

over defendants’ objections, to add state‐law claims for civil

conspiracy and unjust enrichment. The court also denied de‐

fendants’ motion for summary judgment focusing on the

RICO pattern requirement.2

The jury found for the casinos on all counts and awarded

them $25,940,000 in damages, which was trebled under

RICO’s civil damages provision to $77,820,000. See 18 U.S.C.

§ 1964(c). This appeal followed, challenging the sufficiency of

the evidence supporting the RICO count and the district

court’s grant of leave to amend the complaint, and arguing

that various alleged errors warrant a new trial.3

II. Sufficiency of the Evidence

The racetracks appeal the district court’s denial of their

Rule 50(b) renewed motion for judgment as a matter of law.

They argue that the evidence presented at trial cannot support

several aspects of the verdict that they engaged in a racketeer‐

ing conspiracy in violation of 18 U.S.C. § 1962(d). We review

de novo the denial of a Rule 50(b) motion. Lawson v. Sun Mi‐

crosystems, Inc., 791 F.3d 754, 761 (7th Cir. 2015). We construe

the trial evidence “strictly in favor of the party who prevailed

before the jury.” Passananti v. Cook County, 689 F.3d 655, 659

                                                 

2 The district judge took a prudent approach by denying summary judg‐

ment and allowing the pattern issue to go to the jury. The issue is fairly

debatable, and because Judge Kennelly handled the issue so deftly, we

need not order a new trial.

3 The jury also awarded a total of $4 million in punitive damages against

Johnston personally, $1 million for each of four plaintiffs. Johnston dis‐

missed his appeal voluntarily after settling with plaintiffs.  

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No. 15‐2526 7

(7th Cir. 2012). We look to see whether a reasonable jury

would have “a legally sufficient evidentiary basis to find for

the party on that issue.” Fed. R. Civ. P. 50(a)(1); Lawson, 791

F.3d at 761.

The statute defines RICO conspiracy by reference to a di‐

rect RICO violation. 18 U.S.C. § 1962(d). A direct RICO viola‐

tion under § 1962(c) requires “(1) conduct (2) of an enterprise

(3) through a pattern (4) of racketeering activity.” Sedima,

S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985) (footnote omit‐

ted). As with any conspiracy, a RICO conspirator “must in‐

tend to further an endeavor which, if completed, would sat‐

isfy all of the elements of a substantive criminal offense, but it

suffices that he adopt the goal of furthering or facilitating the

criminal endeavor.” Salinas v. United States, 522 U.S. 52, 65

(1997).  

A RICO conspiracy requires proof “that (1) the defend‐

ant[s] agreed to maintain an interest in or control of an enter‐

prise or to participate in the affairs of an enterprise through a

pattern of racketeering activity, and (2) the defendant[s] fur‐

ther agreed that someone would commit at least two predi‐

cate acts to accomplish these goals.” Empress Casino III, 763

F.3d at 734–35 (internal quotation marks and citations omit‐

ted; alteration in original). Courts have further fleshed out

those requirements. A RICO conspirator need not agree to

commit personally two predicate acts in furtherance of the en‐

terprise; rather, he must agree that someone will commit

them. Salinas, 522 U.S. at 65. And to agree to control or partic‐

ipate in the affairs of an enterprise through a pattern of rack‐

eteering activity, one need not agree to “personally participate

in the operation or management of the enterprise.” Brouwer v.

Raffensperger, Hughes & Co., 199 F.3d 961, 967 (7th Cir. 2000).

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8 No. 15‐2526

Rather, one must “knowingly agree to perform services of a

kind which facilitate the activities of those who are operating

the enterprise in an illegal manner.” Id.  

The racetracks argue that a rational jury could not have

found from the evidence presented at trial: (1) that they

agreed to facilitate a RICO enterprise; (2) that the racetracks

made a quid pro quo agreement with Blagojevich; (3) that the

racetracks agreed that someone would commit two RICO

predicate acts; or (4) that the agreed‐on scheme would form a

pattern of racketeering activity. We address these challenges

in turn. The first issue was waived by failure to raise it in the

Rule 50 motion. The evidence supports a finding of a quid pro

quo agreement that extended to at least two predicate acts of

racketeering, but that evidence does not support a finding of

an agreement to engage in a pattern of racketeering activity.

A. Facilitating a RICO Enterprise

The racetracks did not properly preserve for appeal their

argument that the evidence did not support a finding that the

racetracks agreed to facilitate the Blagojevich racketeering en‐

terprise. To preserve a sufficiency‐of‐the‐evidence challenge

for appeal in a civil case, a party must move for judgment as

a matter of law under Federal Rule of Civil Procedure 50(a)

and renew that motion under Rule 50(b) after the jury’s ver‐

dict. Ortiz v. Jordan, 562 U.S. 180, 189 (2011). In their Rule 50(a)

and (b) motions, the racetracks challenged the sufficiency of

the evidence on the other grounds we address below. In a

footnote in their Rule 50(b) motion, the racetracks did “incor‐

porate by reference” their entire earlier supplemental motion

for summary judgment, which included an argument about

facilitation. However, the racetracks did not argue in their

Rule 50 motions that there was insufficient evidence that they

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No. 15‐2526 9

knowingly facilitated the activities of the racketeering enter‐

prise.

To avoid the Rule 50 problem, the racetracks suggest that

we review instead whether the district court erred in denying

their supplemental motion for summary judgment. But denial

of summary judgment is an interlocutory matter subsumed

by a final judgment. Once a jury has rendered its verdict, “the

full record developed in court supersedes the record existing

at the time of the summary‐judgment motion.” Ortiz, 562 U.S.

at 184; see also Lawson, 791 F.3d at 761 (“summary judgment

relies on evidentiary predictions, which are unnecessary once

a jury has found the actual facts”). After trial, the summary

judgment denial is ancient history and not subject to appeal.

The racetracks argue that, even after the jury has rendered

its verdict, we should review the denial of summary judg‐

ment as to purely legal issues. See Lawson, 791 F.3d at 761–62

& n.2 (contract interpretation issue was reviewable, but not‐

ing circuit split on issue); Chemetall GmbH v. ZR Energy, Inc.,

320 F.3d 714, 718–20 (7th Cir. 2003) (same). This controversial

exception for purely legal issues does not apply here. The

racetracks’ argument regarding facilitation challenges the suf‐

ficiency of the evidence supporting the jury’s verdict, so their

failure to raise the argument in Rule 50(a) and (b) motions

blocks that particular argument on appeal. See Brown v. Smith,

No. 15‐1114, — F.3d —, —, 2016 WL 3536619, at *3 (7th Cir.

June 28, 2016) (factual issue not properly preserved for appel‐

late review after trial absent Rule 50(b) motion).4

                                                 

4 In any event, we are satisfied that there was no independent merit to the

racetracks’ facilitation argument, based on the evidence of the quid pro quo

agreement to bribe Blagojevich.

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10 No. 15‐2526

B. Quid Pro Quo Agreement

We proceed to the racetracks’ properly preserved chal‐

lenges to the sufficiency of the evidence supporting the jury’s

findings of a quid pro quo agreement encompassing at least

two predicate acts as part of a pattern of racketeering activity.

The racetracks’ liability in this case depends on evidence

sufficient to enable a jury to find that there was a quid pro quo

agreement. An agreement forms the core of liability for RICO

conspiracy under 18 U.S.C. § 1962(d). See Salinas, 522 U.S. at

63–64. A quid pro quo agreement to trade a campaign contribu‐

tion for the governor’s signature is the foundation of the casi‐

nos’ claim for a RICO conspiracy, as well as for their state‐law

claims for civil conspiracy and unjust enrichment.

The parties presented sufficient evidence at trial to allow

a rational jury to find a quid pro quo agreement between John‐

ston and Blagojevich. First, ample evidence shows that Monk

and Blagojevich communicated to Johnston that Blagojevich

would trade his signature on the 2008 Act for a campaign con‐

tribution. Second, the jury could conclude that Johnston

agreed to this arrangement on behalf of the racetracks.  

The casinos argue that Blagojevich first delivered the mes‐

sage that he was looking for a bribe in an April 2008 meeting.

In that meeting, Johnston met with Blagojevich at the gover‐

nor’s campaign fundraising office. Among other things, the

two discussed the expiration of the 2006 Act. At the end of the

meeting, Blagojevich told Johnston that he appreciated John‐

ston’s past support and hoped he would continue his support

in the future. Johnston testified that he did not respond to the

comment because he and his father had already decided not

to contribute to Blagojevich in 2008. Johnston agreed that he

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No. 15‐2526 11

understood that “what Mr. Blagojevich was looking for in that

meeting was a contribution.”

We need not decide whether the evidence of that meeting

alone provided sufficient evidence to infer an illegal agree‐

ment. Soliciting a campaign contribution, even from a constit‐

uent pushing an agenda, is legal and “in a very real sense is

unavoidable so long as election campaigns are financed by

private contributions or expenditures.” McCormick v. United

States, 500 U.S. 257, 272 (1991). Exchanging a campaign con‐

tribution for state action, however, is not legal. Id. at 272–73.

Juxtaposing the discussion of the two topics so closely is dan‐

gerous, walking close to the edge of thin legal ice. But the ev‐

idence does not show that Johnston agreed to the proposed

exchange in that April meeting with Blagojevich.

Later events provide more evidence from which the jury

could have found that Johnston agreed to exchange the cam‐

paign contribution for the governor’s signature sometime in

August or September 2008. Sometime in that period, Blago‐

jevich called Johnston. Johnston testified that he received the

only phone call he ever received from Blagojevich in August,

and he denied that Blagojevich asked him for a $100,000 con‐

tribution in that call. But Monk testified that in September

2008, Governor Blagojevich called Johnston and secured a

commitment for a $100,000 campaign contribution. A Blago‐

jevich campaign list on September 12, 2008 indicated that

Blagojevich expected a $100,000 contribution from Johnston

in October. And Monk testified that he had “five or six” con‐

versations with Johnston about the “timing” of Johnston pay‐

ing the contribution during October and November 2008.

Monk’s several calls with Robert and Rod Blagojevich in

November 2008 reassuring them that Johnston’s contribution

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12 No. 15‐2526

would be forthcoming provide additional evidence that John‐

ston had agreed to make the contribution in an unlawful ex‐

change for Blagojevich’s support for the 2008 Act. For exam‐

ple, on November 13, 2008, Robert Blagojevich called Monk,

who reported that Johnston had said to him to “tell the big

guy I’m good for it.” Monk reported telling Johnston to “get

it to us as soon as you can.” Monk also tied the contribution

to the 2008 Act, at least obliquely, in the conversation with

Robert Blagojevich. He said that he wanted to talk to the gov‐

ernor about the timing of the contribution “because there’s ab‐

solutely no connection between the two but there is a legisla‐

tive issue down here that  I don’t want to get in the

way  of  .” Monk testified that the “legislative issue” was

the 2008 Act. Still, this evidence was from Monk, not from

Johnston.

But when we add in the evidence of events after the legis‐

lature passed the 2008 Act, the jury had a solid basis for infer‐

ring that Johnston had agreed to a quid pro quo scheme. On

November 24, 2008, the same day the bill was presented to

Blagojevich for his signature, Johnston responded to an email

chain reporting that the governor would likely sign the 2008

Act before mid‐December. He wrote to his internal lobbying

team: “This is getting goofier. We are going to have to put a

stronger bit in his mouth!?!” Although Johnston testified to

the contrary, the jury was entitled to disbelieve him and infer

that the “stronger bit” referred to the campaign contribution.

Further evidence of an illegal quid pro quo agreement came

from the events of December 3, 2008, when Monk and Rod

Blagojevich met at a Blagojevich campaign office. Govern‐

ment tapes captured Monk and Blagojevich discussing what

to tell Johnston about the timing of the bill signing relative to

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No. 15‐2526 13

Johnston’s contribution. Monk said: “I wanna go to him with‐

out crossing the line and say, give us the f***in’ money.  give

us the money and one has nothing to do with the other  but

give us the f***in’ money. Because they’re losin’, they’re losing

9,000 a day.  For every day it’s not signed.” Monk planned

to tell Johnston that he was concerned that Johnston would

“get skittish” about the campaign contribution if Blagojevich

signed the bill. Monk agreed in his testimony that he under‐

stood from that conversation that “Governor Blagojevich was

exchanging the signing of the [2008 Act] quickly for that cam‐

paign contribution.” Monk then called Johnston and arranged

to go see him immediately.  

Monk initially met with Johnston and Johnston’s father,

Billy. The three discussed the 2008 Act and the racetracks’ ea‐

gerness for Blagojevich to sign it. There was no talk of a cam‐

paign contribution at that point. After the meeting, Monk

asked Johnston to walk him out to the parking lot. On their

way out, Monk told Johnston that the governor “has a concern

that if he signs the racing legislation, you might not be forth‐

coming with a contribution.” Johnston’s account of this en‐

counter shows him as innocent. He testified that he did not

react kindly to the suggestion. He said he “flew off the handle

a little bit,” and told Monk that “your suggestion of a contri‐

bution at this time is wrong and inappropriate,” due to the

apparent tie between the contribution and signing the bill.  

But Monk’s very different account of Johnston’s reaction

provides ample evidence from which a jury could find that

Johnston had agreed to the quid pro quo arrangement. Later

that day, Monk called Blagojevich to report the result of the

meeting with Johnston. Monk reported that Johnston said he

would make the contribution within two weeks. Monk also

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14 No. 15‐2526

relayed that Johnston had offered to put off part of the contri‐

bution into the next quarter in response to Monk voicing con‐

cerns that Johnston might get “skittish” if Blagojevich signed

the bill. Monk declined that offer. At trial, Monk testified that

what he had told Blagojevich about the conversation with

Johnston was accurate. Monk’s testimony about the December

3 conversation with Johnston gave the jury sufficent evidence

that Blagojevich had proposed a quid pro quo exchange and

that Johnston had agreed to it.

The racetracks point out correctly that Monk and Johnston

both testified that there was no “agreement.” For example,

Monk testified about the December 3 meeting: “I thought he

was going to make a donation. I don’t think we had an agree‐

ment.” But it is easy to read this disclaimer as a merely seman‐

tic argument by experienced operatives who know that an

agreement is a crime. Monk agreed in his testimony that the

“message” he intended to deliver on December 3 was “that

once the hundred thousand dollar contribution was made, the

2008 Racing Act would be signed.” That is a quid pro quo agree‐

ment. Johnston also confirmed in his testimony that he knew

“Mr. Blagojevich was looking for a contribution before the bill

would be signed.” And Monk testified that Johnston had re‐

assured him that he would make the contribution.

Monk and Johnston did not have to use the word “agree‐

ment” in their testimony to allow a jury to find a quid pro quo

agreement. The jury was entitled to put two and two together.

See United States v. Blagojevich, 794 F.3d 729, 738 (7th Cir. 2015)

(“Few politicians say, on or off the record, ‘I will exchange of‐

ficial act X for payment Y.’ Similarly persons who conspire to

rob banks or distribute drugs do not propose or sign contracts

in the statutory language.”). The evidence, viewed in the light

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No. 15‐2526 15

most favorable to the casinos, allowed the jury to find that

Blagojevich conditioned his quick signature on the 2008 Act

on Johnston’s campaign contribution, that Monk communi‐

cated that to Johnston, and that Johnston agreed to that ar‐

rangement. The evidence supported the jury’s finding of a

quid pro quo agreement.5  

C. Two Predicate Acts

The racetracks next challenge the sufficiency of evidence

that they agreed to the commission of two RICO predicate

acts. Liability for a § 1962(c) RICO conspiracy requires an

agreement that someone conduct an enterprise through a pat‐

tern of racketeering activity. 18 U.S.C. § 1962(c), (d); Salinas v.

United States, 522 U.S. 52, 65–66 (1997). Racketeering activity

is defined to include any of a long list of crimes. 18 U.S.C.

§ 1961(1). A pattern of racketeering activity requires two or

more predicate acts. 18 U.S.C. § 1961(5). For the sake of clarity,

we analyze the two‐predicate‐acts requirement in this section

and whether those predicate acts were enough to form a pat‐

tern in the next section.

A rational jury could find that Johnston committed or

agreed to the commission of several RICO predicate acts.

Johnston’s agreement to bribe Blagojevich would count. See

18 U.S.C. §§ 1951(b)(2), 1961(1); 720 ILCS 5/33‐1; see Evans v.

United States, 504 U.S. 255, 260–61 (1992) (Hobbs Act extortion

                                                 

5

To whatever extent the racetracks seek a new trial on the theory that the

manifest weight of the evidence was that there was no quid pro quo agree‐

ment, we reject that request for the reasons stated in this section. See

Whitehead v. Bond, 680 F.3d 919, 928–29 (7th Cir. 2012) (discussing legal

standard for granting new trial because a verdict was against the manifest

weight of the evidence).

Case: 15-2526 Document: 42 Filed: 08/02/2016 Pages: 37
16 No. 15‐2526

encompasses “taking a bribe”). And agreeing that Blagojevich

would commit official misconduct by signing the bill in ex‐

change for a bribe was also an agreed‐upon predicate act. See

18 U.S.C. § 1961(1)(A); 720 ILCS 5/33‐3(a)(4).  

“Honest services” wire fraud is also a RICO predicate. See

18 U.S.C. §§ 1343, 1346, 1961(1)(B). Each use of the wires, such

as a cellphone call, to arrange the bribe would count, as long

as Johnston agreed to it or it was foreseeable in carrying out

his agreement. See Skilling v. United States, 561 U.S. 358, 405–

08 (2010) (bribery is at the core of “honest services” wire

fraud); see also United States v. Sheneman, 682 F.3d 623, 630 (7th

Cir. 2012) (foreseeable use of wires is crime even if not actually

intended by defendant); United States v. Radomski, 473 F.3d

728, 729 (7th Cir. 2007) (“cellphone to cellphone conversations

involve communications over wires at some point in the

transmission”). Using the wires for lobbying and political log‐

rolling is not honest services wire fraud, but arranging and

paying a quid pro quo bribe certainly is. See Blagojevich, 794

F.3d at 736. It is also possible that the casinos’ daily tax pay‐

ments might have counted as honest services wire fraud. See

Sheneman, 682 F.3d at 629–30 (“Moreover, it is not necessary

for the use of the wires to contain any false or fraudulent ma‐

terial, and even a routine or innocent use of the wires may

satisfy this element so long as that use is part of the execution

of the scheme.”).

Each use of the wires can be an individual count of wire

fraud and an individual RICO predicate for the purpose of

establishing two predicate acts. See, e.g., Midwest Grinding Co.

v. Spitz, 976 F.2d 1016, 1024–25 (7th Cir. 1992); see also United

States v. Garlick, 240 F.3d 789, 792 (9th Cir. 2001) (“each use of

the wires constitutes a separate violation of 18 U.S.C. § 1343”).

Case: 15-2526 Document: 42 Filed: 08/02/2016 Pages: 37
No. 15‐2526 17

The jury rationally could have found that Johnston agreed to

a bribery scheme that would foreseeably include at least two

acts of racketeering.

D. Pattern of Racketeering Activity

The casinos run into trouble, however, in showing that the

parties agreed to predicate acts forming a pattern of racket‐

eering activity. RICO provides that a “pattern of racketeering

activity requires at least two acts of racketeering activity,” 18

U.S.C. § 1961(5), but case law shows that two predicate acts

are not always sufficient. H.J. Inc. v. Northwestern Bell Telephone

Co., 492 U.S. 229, 237 (1989). To form a pattern, the predicate

acts must exhibit “continuity plus relationship.” Id. at 239 (ci‐

tation and internal quotation marks omitted; emphasis re‐

moved). Related predicate acts have “the same or similar pur‐

poses, results, participants, victims, or methods of commis‐

sion, or otherwise are interrelated by distinguishing charac‐

teristics and are not isolated events.” Id. at 240 (citation and

internal quotation marks omitted). The predicate acts’ rela‐

tionship is not disputed here. Our focus is on continuity.  

Continuity is “centrally a temporal concept.” Id. at 242.

The continuity requirement ensures that RICO targets “long‐

term criminal conduct,” one classic example being a protec‐

tion racket, in which a criminal extracts monthly “insurance”

payments from businesses. Id.; see also Gamboa v. Velez, 457

F.3d 703, 705 (7th Cir. 2006) (“RICO, nonetheless, does not

cover all instances of wrongdoing. Rather, it is a unique cause

of action that is concerned with eradicating organized, long‐

term, habitual criminal activity.”). Continuity limits RICO to

schemes meant to exist over a period of time, not one‐off

crimes.  

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18 No. 15‐2526

The Supreme Court has divided continuity into two ana‐

lytical types: “‘Continuity’ is both a closed‐ and open‐ended

concept, referring either to a closed period of repeated con‐

duct, or to past conduct that by its nature projects into the fu‐

ture with a threat of repetition.” H.J. Inc., 492 U.S. at 241. Here,

the agreed predicate acts lacked the requisite continuity to

form a pattern under either analysis.  

1. Closed‐End Continuity

The racetracks’ scheme does not exhibit closed‐end conti‐

nuity, and the casinos admit that they did not rely at trial on

a closed‐end argument. Closed‐end continuity is satisfied by

“a series of related predicates extending over a substantial pe‐

riod of time.” H.J. Inc., 492 U.S. at 242. To determine closed‐

end continuity, we examine “the number and variety of pred‐

icate acts and the length of time over which they were com‐

mitted, the number of victims, the presence of separate

schemes and the occurrence of distinct injuries.” Morgan v.

Bank of Waukegan, 804 F.2d 970, 975 (7th Cir. 1986); see also

Vicom, Inc. v. Harbridge Merchant Services, Inc., 20 F.3d 771, 780

(7th Cir. 1994). Here, the arrangements for the bribe began no

earlier than the April 2008 meeting about the bill at the

Friends of Blagojevich office and ended in December 2008,

when Blagojevich signed the bill. One quid pro quo agreement,

one planned campaign contribution for one bill, one tax im‐

posed, and acts over at most eight months to arrange the

scheme do not show closed‐end continuity. See, e.g., Vicom,

Inc., 20 F.3d at 780 (nine‐month‐long scheme insufficient for

closed‐end continuity); Midwest Grinding Co. v. Spitz, 976 F.2d

1016, 1024 (7th Cir. 1992) (same). The three‐percent tax was

Case: 15-2526 Document: 42 Filed: 08/02/2016 Pages: 37
No. 15‐2526 19

also time‐limited and does not provide the type of distinct in‐

juries or variety of predicate acts that would form closed‐end

continuity. See Vicom, Inc., 20 F.3d at 781–82.

2. Open‐Ended Continuity

The casinos rely instead on a theory of open‐ended conti‐

nuity and the “threat of continuity.” H.J. Inc., 492 U.S. at 242

(emphasis in original). Open‐ended continuity is satisfied by

“past conduct that by its nature projects into the future with

a threat of repetition.” Id. at 241. Our circuit has noted three

situations that satisfy open‐ended continuity: “when (1) ‘a

specific threat ofrepetition’ exists, (2) ‘the predicates are a reg‐

ular way of conducting [an] ongoing legitimate business,’ or

(3) ‘the predicates can be attributed to a defendant operating

as part of a long‐term association that exists for criminal pur‐

poses.’” Vicom, Inc., 20 F.3d at 782 (alteration in original), quot‐

ing H.J. Inc., 492 U.S. at 242–43.

The evidence here does not demonstrate a threat of repe‐

tition. This case is about one quid pro quo agreement to ex‐

change one campaign contribution for Blagojevich’s signature

on one bill. Once Blagojevich signed the bill, the scheme was

over. After we affirmed summary judgment on claims regard‐

ing the 2006 Act, the evidence of bribery in this trial related

only to the 2008 Act. See Empress Casino III, 763 F.3d at 731

(“Evidence is similarly lacking to support a finding that the

Racetracks bribed Governor Blagojevich to sign the ‘06 Act

into law.”).

We have repeatedly held that schemes fail to satisfy open‐

ended continuity where they have a “natural ending point.”

In Roger Whitmore’s Automotive Services, Inc. v. Lake County, we

affirmed summary judgment for defendants on RICO claims

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20 No. 15‐2526

alleging that the Lake County Sheriff had cut a towing com‐

pany’s assigned towing area because the owner had sup‐

ported the sheriff’s opponent in an election. 424 F.3d 659, 665–

66 (7th Cir. 2005). We rejected open‐ended continuity because

all of the predicate acts alleged related to campaign fundrais‐

ing from the 1998 election campaign. “[T]he alleged scheme

had a natural ending point when Del Re was elected sheriff

and he retired the debt accrued in that campaign.” Id. at 674.  

We have applied this logic in other cases involving simi‐

larly limited criminal schemes. See, e.g., Gamboa v. Velez, 457

F.3d 703, 708 (7th Cir. 2006) (holding on pleadings that alleged

scheme to frame murder suspect did not satisfy continuity be‐

cause scheme was “a one‐time endeavor to wreak havoc upon

all matters linked to a single murder investigation” that “had

a built‐in end point: once the frame‐up was put to rest, the

scheme was over”); Vicom, Inc., 20 F.3d at 783 (affirming dis‐

missal on pleadings; no open‐ended continuity because

fraudulent scheme to inflate company’s value in the eyes of

prospective purchaser “had a natural ending point” with

company’s sale); Uni*Quality, Inc. v. Infotronx, Inc., 974 F.2d

918, 919–920, 922 (7th Cir. 1992) (affirming dismissal on plead‐

ings; scheme not to pay for software project did not satisfy

continuity because it had a “natural end point: the completion

of the [project]”).  

In Roeder v. Alpha Industries, Inc., the First Circuit applied

this reasoning to affirm a district court’s Rule 12(b)(6) dismis‐

sal of a similar RICO claim involving a one‐time bribe. 814

F.2d 22, 23 (1st Cir. 1987). The plaintiff alleged that Alpha In‐

dustries had bribed an employee of another company so that

Alpha would be included as a subcontractor in a defense con‐

tract. Id. Alpha paid the bribe in three installments, and there

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No. 15‐2526 21

were eleven phone calls and eight letters associated with it. Id.

at 31. The First Circuit reasoned: “A bribe, which by any real‐

istic appraisal is solitary and isolated, is not transformed into

the threatening ‘pattern of racketeering activity’ with which

Congress was concerned simply because the bribe is imple‐

mented in several steps and involves a number of acts of com‐

munication.” Id. Although the First Circuit decided Roeder be‐

fore H.J. Inc., in which the Supreme Court developed the con‐

tinuity analysis framework, Roeder’s reasoning is consistent

with H.J. Inc. and applies directly here.  

In contrast, schemes exhibiting open‐ended continuity are

not “inherently terminable.” See Heinrich v. Waiting Angels

Adoption Services, Inc., 668 F.3d 393, 400, 410–11 (6th Cir. 2012)

(noting that in fraudulent adoption scheme “there is no inher‐

ent limit to the number of couples seeking to adopt or to the

number of children that the defendants could hold out as

available for adoption”). RICO does not require more than

one scheme, H.J. Inc., 492 U.S. at 240, but a scheme must in‐

clude some threat of continuing into the future to satisfy

open‐ended continuity.

Applying the reasoning from these cases to the Blago‐

jevich‐Monk‐Johnston bribery agreement in 2008, a reason‐

able jury could not have found a scheme with open‐ended

continuity. No specific threat of repetition existed. Once the

bill was signed, the scheme was at its natural end point, at

least on the evidence presented at trial. The tax payments un‐

der the 2008 Act, of course, continued for a limited time after

the bill’s signing, but that is not enough to support open‐

ended continuity. See Vicom, Inc., 20 F.3d at 781 (“Mail fraud

and wire fraud are perhaps unique among the various sorts

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22 No. 15‐2526

of ‘racketeering activity’ possible under RICO in that the ex‐

istence of a multiplicity of predicate acts  may be no indica‐

tion of the requisite continuity of the underlying fraudulent

activity.”) (alteration in original), quoting Lipin Enterprises Inc.

v. Lee, 803 F.2d 322, 325 (7th Cir. 1986) (Cudahy, J., concurring).

The casinos argue that they satisfied the continuity re‐

quirement based on the possibility that the racetracks would

again employ bribery when the 2008 Act was scheduled to

sunset in 2011. In denying the racetracks’ Rule 50(b) motion,

the district court adopted this theory, noting that the jury

could have found a threat of repetition from evidence that

“the 2008 Act included a sunset provision, and Johnston and

other members of the horse racing industry considered what

would happen when the Act expired in 2011  along with the

testimony that Blagojevich regularly traded state action for

campaign contributions  .” Such suspicions are understand‐

able but are too close to speculative to support a finding of

continuity. There would be a gubernatorial election in 2010.

No one in 2008 could know who would be governor in 2011,

much less whether illegal tactics would be needed or even

welcome in securing reenactment in 2011.  

The evidence regarding the racetracks’ consideration of

the 2008 Act’s sunset provision does not show any plans to

use illegal means to secure renewal. The racetracks rely on a

September 2008 email exchange. The email exchange shows

the racetracks planning to have the 2008 Act run for a longer

period so that they could get a replacement act passed before

the 2008 Act expired. Those emails are about the minutiae of

drafting the 2008 Act, not a criminal scheme for getting a fu‐

ture bill enacted. The email chain opened with this message:

“Draft of extension bill amendment. We will need to change

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No. 15‐2526 23

page 5, line 10 to reflect repeal effective 3 years after effective

date of law.” The reply email said: “We should just make it the

end of 2011 so we don’t have the possibility of it falling

through the cracks. Similar to what happened when [the 2006

Act] expired on May 24th and we were still trying to get the

extension passed at the end of May. In 2011 the veto session

could end up being later than three years after the effective

date. Then again, that would be a nice problem to have to

worry about.” That message was forwarded with a message

reading: “See Jack’s comments below, with which I agree. Jack

are you having [redacted] review the findings to add any‐

thing in finding 5? [When we hear] from you we will have

Andrea redraft to fix this expiration problem.” Jack replied:

“Yes. I need to give him a call to discuss.”

In their closing argument, the casinos told the jury that

these emails showed that “this pattern is going to happen

again, and it would have but for” the government arresting

and prosecuting Blagojevich. We are not convinced this is a

reasonable reading of this email chain. The emails reflect the

racetracks’ awareness that new legislation would be needed

in the future and their intent to pursue it. But that is all the

emails show. There is no indication that the racetracks consid‐

ered how to get the later act through the legislature or how to

get the governor to sign it, let alone that they were planning

or even contemplating another bribe to an as‐yet‐unknowable

governor or legislators.  

The evidence certainly shows that Blagojevich’s regular

way of conducting business involved bribery. And Johnston

knew about the criminal investigation into Blagojevich by late

2007. But Blagojevich is not the defendant here. The question

is the scope of what Johnston and the racetracks agreed to.

Case: 15-2526 Document: 42 Filed: 08/02/2016 Pages: 37
24 No. 15‐2526

Monk and Johnston both testified that Johnston was not

aware of the various other Blagojevich schemes mentioned at

trial. Johnston and the racetracks’ liability for RICO conspir‐

acy cannot be based on “mere association with an enterprise.”

Brouwer v. Raffensperger, Hughes & Co., 199 F.3d 961, 965–66

(7th Cir. 2000). The standard, rather, is whether these defend‐

ants agreed that someone would commit two predicate acts

and whether these defendants agreed “to maintain an interest in

or control of an enterprise or to participate in the affairs of an

enterprise through a pattern of racketeering activity.” Empress

Casino III, 763 F.3d at 734–35 (citations and internal quotation

marks omitted). There is no evidence that Johnston agreed to

participate in any corrupt scheme except for the one to have

Blagojevich sign the 2008 Act. A one‐time bribe to a corrupt

public official is criminal and wrong, but without more it is

not enough to prove a pattern of racketeering activity.

This case contrasts with H.J. Inc., for example, where plain‐

tiffs alleged a six‐year scheme where defendants “with some

frequency” bribed public utility commissioners to approve

unreasonable rates. 492 U.S. at 250. Those plaintiffs could

have shown open‐ended continuity because “the alleged

bribes were a regular way of conducting [defendant’s] ongo‐

ing business, or a regular way of conducting or participating

in the conduct of the alleged and ongoing RICO enterprise,

the [utility commission].” Id. Here, the evidence of unlawful

activity related to only the 2008 Act. The casinos did not pre‐

sent evidence that would allow a reasonable jury to find that

the racetracks agreed to conduct their business regularly

through quid pro quo bribery or agreed to participate regularly

in Blagojevich’s larger corrupt scheme through bribery, or that

there was a threat of such activity.

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No. 15‐2526 25

It is, of course, possible that the racetracks might have

tried to use bribery again in 2011, if Blagojevich had not been

removed from office and had run successfully for a third term.

That speculative possibility is not enough to support the jury

finding of a conspiracy to engage in a RICO pattern of racket‐

eering activity. Rather, the evidence shows a scheme with a

“natural ending point.” Blagojevich signed the 2008 Act into

law. There is insufficient evidence to support a jury finding of

a pattern of racketeering activity, so we reverse the district

court’s denial of the racetracks’Rule 50(b) renewed motion for

judgment as a matter of law on this issue.  

III. Leave to Amend

We next address the racetracks’ claim that the district court

abused its discretion by allowing the casinos to add state‐law

claims for civil conspiracy and unjust enrichment to their

complaint after we affirmed summary judgment regarding

the 2006 Act but let claims regarding the 2008 Act move for‐

ward. Leave to amend pleadings is left to the sound discretion

of the district court. McCoy v. Iberdrola Renewables, Inc., 760

F.3d 674, 684 (7th Cir. 2014); Trustmark Insurance Co. v. Gen‐

eral & Cologne Life Re of America, 424 F.3d 542, 553 (7th Cir.

2005). Because the casinos sought to amend their complaint

after the deadline set by the district court’s original schedul‐

ing order, Federal Rule of Civil Procedure 16(b)(4) required

them to show good cause for amendment, a standard that

“primarily considers the diligence of the party seeking

amendment.” Trustmark Insurance, 424 F.3d at 553 (citation

and internal quotation marks omitted).

We find no abuse of discretion here. The amendment was

a prompt response to the altered landscape of the case after

we affirmed summary judgment on the 2006 Act claims but

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26 No. 15‐2526

allowed the 2008 Act claims to go forward. We issued our rul‐

ing on summary judgment on August 15, 2014, in which we

signaled there might well be a problem in showing a pattern

based on only the 2008 Act. Empress Casino III, 763 F.3d at 735.

The casinos moved for leave to amend their complaint on Oc‐

tober 2, 2014.  

We regularly affirm district courts’ decisions to deny un‐

duly delayed requests to amend pleadings. See, e.g., McCoy,

760 F.3d at 687 (affirming district court denial, under Rule 15,

of leave to amend counterclaims six months after original

counterclaims had been dismissed, noting “the unexplained

delay looks more like procedural gamesmanship than legiti‐

mate ignorance or oversight”). But affirming discretionary de‐

nial of leave to amend does not suggest that we would also

hold that a court would have abused its discretion in granting

leave to amend, even in similar circumstances. In their appel‐

late briefing on amendment issue, the racetracks have not

cited a case in which we reversed a district court’s exercise of

discretion to grant leave to amend. Such cases are exceedingly

rare. Cf. Venters v. City of Delphi, 123 F.3d 956, 969 (7th Cir.

1997) (reversing district court’s decision to consider statute of

limitations defense never asserted in pleading and first raised

in reply brief on summary judgment).

With a late motion for leave to amend, the “underlying

concern is the prejudice to the defendant rather than simple

passage of time.” McCoy, 760 F.3d at 687. As the district court

held, since the new state‐law claims relied on the same facts

as the RICO claim, the amendments did not unfairly prejudice

the racetracks. Both state‐law theories, civil conspiracy and

unjust enrichment, depended on the quid pro quo agreement

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No. 15‐2526 27

between Blagojevich and Johnston, brokered by Monk. The Il‐

linois civil conspiracy claim was based on the agreement be‐

tween Johnston and Blagojevich. See Fritz v. Johnston, 807

N.E.2d 461, 470 (Ill. 2004) (defining elements of civil conspir‐

acy). Unjust enrichment under Illinois law requires a plaintiff

to show that a defendant has “unjustly retained a benefit to

the plaintiff’s detriment, and that defendant’s retention of the

benefit violates the fundamental principles of justice, equity,

and good conscience.” HPI Health Care Services, Inc. v. Mt.

Vernon Hospital, Inc., 545 N.E.2d 672, 679 (Ill. 1989). Here, the

unjust benefits were the payments received as a result of the

agreed bribe to sign the 2008 Act.

The racetracks argue that the additional claims unfairly

prejudiced them because they were unable to conduct suffi‐

cient discovery on a potential unclean hands defense to the

unjust enrichment claim. We are not persuaded. The district

court enforced many of the racetracks’ document and deposi‐

tion requests related to the casinos’ lobbying on the 2006 and

2008 Acts. For example, the court enforced the racetracks’mo‐

tion to compel production of documents “evincing any com‐

munications” between the casinos and legislators or the gov‐

ernor “relating to the Racing Acts.” The court also required

production of “documents sufficient to show all contributions

made to Mr. Blagojevich or to members of or candidates for

the Illinois General Assembly between 2005 and 2008.” The

court also enforced a Rule 30(b)(6) deposition notice regard‐

ing all “communications between [Plaintiff] and any member

of the Illinois General Assembly regarding  the 2006 and

2008 Racing Acts  .” Although the court did not enforce

every discovery request the racetracks made, they still con‐

ducted substantial discovery into the casinos’ political activi‐

ties. The racetracks have not demonstrated unfair prejudice

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28 No. 15‐2526

here such that we could conclude that the district court

abused its discretion in granting leave to amend.6

IV. Claims of Trial Error

The racetracks also appeal the denial of their Rule 59 mo‐

tion for a new trial based on several alleged trial errors. We

review the denial of a Rule 59 motion for a new trial for an

abuse of discretion. Davis v. Wisconsin Dep’t of Corrections, 445

F.3d 971, 979 (7th Cir. 2006). An appellate court will order a

new trial in a civil case “only when the record shows that the

jury’s verdict resulted in a miscarriage of justice or where the

verdict, on the record, cries out to be overturned or shocks our

conscience.” Id. (citation and internal quotation marks omit‐

ted). We find no abuse of discretion in the district court’s con‐

clusion that the alleged errors do not warrant a new trial. We

examine the claims of error in turn.

A. Evidence of 2002–2007 Campaign Contributions

The racetracks argue that the district court erred by admit‐

ting evidence of their contributions to Rod Blagojevich from

                                                 

6 The racetracks argue on appeal that leave to amend unfairly prejudiced

them because it introduced the possibility of punitive damages into the

case. The racetracks did not make this argument to the district court, so it

is forfeited. Even if it were not forfeited, it is unconvincing. First, this was

a civil RICO case in which the defendants already faced the threat of treble

damages under 18 U.S.C. §1964(c). Also, the racetracks cite cases affirming

denials of leave to amend to add punitive damage claims. See Knapp v.

Whitaker, 757 F.2d 827, 849 (7th Cir. 1985); Orix Credit Alliance, Inc. v. Taylor

Machine Works, Inc., 125 F.3d 468, 481 (7th Cir. 1997); Hartis v. Chicago Title

Ins. Co., 694 F.3d 935, 948–49 (8th Cir. 2012). A late attempt to add punitive

damages might give a district court a sound basis to deny leave to amend,

at least if RICO trebling were not already in the case, but that would not

mean the court lacked discretion to allow the amendment.

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No. 15‐2526 29

2002 to 2007 and also erred by not instructing the jury that

those contributions were legal. We review the district court’s

decision to admit the evidence of the 2002 to 2007 contribu‐

tions to Blagojevich for abuse of discretion. Geitz v. Lindsey,

893 F.2d 148, 150 (7th Cir. 1990). We find none here.  

The district court’s ruling on the racetracks’ motion in

limine admitted evidence of the 2002 to 2007 contributions be‐

cause the evidence “tends to support the notion that [John‐

ston] would have agreed to make a significant contribution in

2008 and that Blagojevich and his agents would have sought

a significant contribution from Johnston at that time.” The ev‐

idence at trial confirmed the district court’s theory of rele‐

vance. In one recorded telephone conversation, Monk re‐

ported that Johnston said he was not worried about the prom‐

ised contribution because he had “a history of giving these

amounts  .” The history of contributions also gave context

to Blagojevich’s statement at the April 2008 meeting that he

appreciated Johnston’s past support and would appreciate

more.

The district court did not abuse its discretion by declining

to exclude the contributions as “propensity” evidence under

Federal Rule of Evidence 404(b)(1). It is hard to see why the

casinos would be using the racetracks’past legal contributions

to Blagojevich to prove the racetracks’ “propensity to behave

in a certain way,” as Rule 404(b)(1) prohibits. See United States

v. Gomez, 763 F.3d 845, 855 (7th Cir. 2014) (en banc). The casi‐

nos were trying to prove the opposite of a legal contribution.

Rather, it makes more sense that the past legal contributions

were used to show “opportunity” to engage in an illegal quid

pro quo scheme. See Fed. R. Evid. 404(b)(2). Consistent with

that reasoning, the district court limited the contributions’use

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30 No. 15‐2526

to showing that the racetracks “had a regular practice of mak‐

ing significant contributions to Rod Blagojevich’s campaigns”

and “as support for the proposition that Blagojevich would

have sought a significant contribution from Johnston in 2008.”

The evidence of the contributions also was not so unfairly

prejudicial in linking the racetracks to Blagojevich that the ev‐

idence should have been kept out under Federal Rule of Evi‐

dence 403. Plenty of other evidence linked Johnston and

Blagojevich, some of it in much more damning fashion. And

evidence of the earlier contributions was not entirely harmful

to the racetracks: on the stand, Johnston himself brought up

his contribution to Blagojevich from 2002 and 2006 in re‐

sponse to questions about media reports in 2008 that an un‐

named racetrack executive had promised Blagojevich a

$100,000 contribution for the governor’s signature on legisla‐

tion. The district court also gave a proper limiting instruction,

which would have mitigated any risk of unfair prejudice. Ab‐

sent indications to the contrary, we presume that juries heed

limiting instructions. United States v. Mallett, 496 F.3d 798, 802

(7th Cir. 2007).

We also disagree with the racetracks that the district court

erred by refusing to instruct the jury that the 2002 to 2007 con‐

tributions were legal and not bribes. The judge actually in‐

structed the jury: “You have heard evidence that the defend‐

ants made campaign contributions to Friends of Blagojevich

in the years 2002 through 2007. It is common for citizens and

corporations to donate to political campaigns, and there is

nothing illegal about this practice.” This instruction was a lit‐

tle weaker than the instruction the court was originally plan‐

ning to give, which would have said that the 2002 to 2007 con‐

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No. 15‐2526 31

tributions “were legal campaign contributions.” We are confi‐

dent, though, that the jury would not have been confused

about the legality of the 2002 to 2007 contributions. The dis‐

trict court did not abuse its discretion in wording the instruc‐

tion as it did.7

B. The Fifth Amendment and the Adverse Inference Instruc‐

tion

The government’s letter offering Johnston immunity from

prosecution in exchange for information on Blagojevich said:

“Your attorney has represented that such information may

tend to incriminate you.” The judge instructed the jury: “In a

civil case like this one, you may infer that Mr. Johnston had

information that would have incriminated him. You are not

required to draw this inference.” The racetracks argue that the

district court erred by giving this instruction. They point out

that Johnston testified before the grand jury and in the Blago‐

jevich trials, albeit subject to immunity, and assert that he an‐

swered every question in this case.8

                                                 

7

To the extent the casinos also complain about evidence of Johnston’s con‐

tributions to former Illinois Governor Jim Edgar, the district court did not

abuse its discretion in finding that the racetracks had opened the door to

that evidence by attempting to minimize their contributions to Blago‐

jevich.

8 In this trial, Johnston first testified that he had told the government what

he knew before receiving immunity from prosecution. As Johnston’s law‐

yers admitted the next morning, that was incorrect. First Johnston re‐

ceived his immunity letter. Only then did he answer the government’s

questions. Johnston’s lawyers agreed that he would correct this misstate‐

ment in his later testimony. Yet on redirect examination by the casinos’

lawyer, Johnston still stuck to his false story from the previous day. Fi‐

nally, after still more questioning, Johnston admitted that he had signed

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32 No. 15‐2526

“We review a district court’s choice of jury instruction de

novo when the underlying assignment of error implicates a

question of law ; however, general attacks on jury instruc‐

tions are reviewed for an abuse of discretion.” United States v.

Macedo, 406 F.3d 778, 787 (7th Cir. 2005); see also United States

v. Tavarez, 626 F.3d 902, 904 (7th Cir. 2010).

The district court did not abuse its discretion in giving the

adverse inference instruction, which was legally accurate and

permissible. The Fifth Amendment allows adverse inference

instructions against parties in civil actions. Baxter v. Pal‐

migiano, 425 U.S. 308, 318 (1976). The instruction here did not

tell the jury to give Johnston’s silence “more evidentiary value

than was warranted by the facts surrounding his case.” Id. at

318. Johnston told the jury that he testified before a grand jury

and at both of Blagojevich’s trials and never refused to answer

a question. He also testified that he had told the jury the same

story about the events of December 3, 2008 that he had testi‐

fied to in the Blagojevich trials and that he did not believe any

of his testimony incriminated him. Johnston’s counsel argued

to the jury that Johnston had disclosed everything to the gov‐

ernment and that there were no adverse inferences to be

made.

Reversing course and testifying after invoking the Fifth

Amendment privilege does not remove the relevance of a wit‐

ness’s prior silence as one piece of evidence a jury may con‐

sider. See Harris v. City of Chicago, 266 F.3d 750, 755 (7th Cir.

2001) (abuse of discretion to bar evidence of prior invocation

of Fifth Amendment right by defendant who later waived the

                                                 

the immunity letter before answering questions. This sequence could not

have reflected well on Johnston’s credibility with the jury.

Case: 15-2526 Document: 42 Filed: 08/02/2016 Pages: 37
No. 15‐2526 33

right and testified at trial); cf. Evans v. City of Chicago, 513 F.3d

735, 745 (7th Cir. 2008) (no abuse of discretion in excluding

evidence of prior invocation of Fifth Amendment while also

allowing defendants who had previously invoked Fifth

Amendment to testify, because judge allowed further discov‐

ery after defendants elected to testify, although it was a “close

call”). Johnston’s credibility was at the core of this trial. The

jury had to choose between competing accounts from Monk

and Johnston. The jury could properly consider Johnston’s in‐

vocation of his Fifth Amendment rights and his delay in an‐

swering questions. For example, it would not have been un‐

reasonable to view his initial refusal to answer questions as a

tactic to get his story straight before doing so, and his reluc‐

tance to be candid about the timing adds support for that in‐

terpretation.9

C. Exclusion of Victim Impact Letter

The racetracks offered as evidence a victim impact letter

the U.S. government sent to Johnston in connection with

Blagojevich’s criminal case. The form letter told Johnston that

the “judge is interested in knowing the impact this crime has

                                                 

9

The racetracks point to the Ninth Circuit’s statement in Doe ex rel. Rudy‐

Glanzer v. Glanzer, 232 F.3d 1258, 1265 (9th Cir. 2000), that “no negative

inference can be drawn against a civil litigant’s assertion of his privilege

against self‐incrimination unless there is a substantial need for the infor‐

mation and there is not another less burdensome way of obtaining that

information.” The circumstances in Doe were very different from this case,

and the Ninth Circuit also noted that the propriety of an adverse inference

instruction had to be judged “on a case‐by‐case basis under the micro‐

scope of the circumstances of that particular civil litigation.” Id. at 1265.

The district judge here did so and did not abuse his discretion by giving

the adverse‐inference instruction.

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34 No. 15‐2526

had on you and your family,” and solicited a Victim Impact

Statement.  

The district court excluded the letter because the “only

conceivable purpose” for admitting it would have been to

show that the government viewed Johnston as a victim. We

find no abuse of discretion. The district court was correct that

the letter, if offered to prove that Johnston was a victim rather

than a participant, is hearsay, and it had minimal probative

value. Using the letter to prove that Johnston was a victim

would be using an out‐of‐court statement for the truth of the

matter asserted.

The fact that the government included Johnston, perhaps

just to ensure it did not leave anyone out, in its efforts to com‐

ply with the Crime Victims’ Rights Act, 18 U.S.C. § 3771, also

offers no evidence of probative value. Imagine an effort to get

around the hearsay problem by calling a prosecutor to testify

in the civil case. The racetracks’lawyers would have asked her

whether she believed Johnston was a victim or a participant.

Her answer would have been an opinion, and it would have

been based on a set of information different from what the

civil jury would hear. Any fairresponse to an opinion in either

direction would quickly devolve into an argumentative exam‐

ination that would almost certainly generate more heat than

light. This would not have been a useful contribution to the

trial. In contrast, Johnston’s immunity letter was both specific

to Johnston and relevant to his actions, as discussed above.

D. Damages Argument

Finally, the racetracks tried to argue in closing that Illi‐

nois’s “60‐day” rule mitigated the damages caused by their

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No. 15‐2526 35

planned bribery of Blagojevich. Under the Illinois Constitu‐

tion, Art. 4 § 9(b), a bill passed by the General Assembly that

the governor does not veto becomes law 60 days after it is pre‐

sented to the governor. The racetracks wanted to argue that

they should be liable, at most, for the taxes levied in the days

between the day Blagojevich signed the 2008 Act and the day

the bill would have become law anyway under the 60‐day

rule. The judge sustained the casinos’ objection because the

argument was contrary to the jury instructions.  

The district judge did not abuse his discretion in not al‐

lowing a closing argument contrary to the jury instructions.

“Broad discretion is reposed in the trial court to control clos‐

ing arguments and its discretion in this area will not be over‐

turned absent a showing of clear abuse.” United States v.

Sands, 815 F.3d 1057, 1063 (7th Cir. 2015), quoting United States

v. Grabiec, 563 F.2d 313, 319 (7th Cir. 1977). The instructions

allowed the jury to consider the 60‐day rule with regard to the

racetracks’ motives. “With regard to causation,” the jury in‐

structions read, “this evidence does not matter. The defend‐

ants may be held liable for any injury proximately caused by

the alleged agreement to pay a bribe to Governor Blagojevich

regardless of any events that could have happened in the fu‐

ture.” And the district court instructed the jury that damages

should be “the amount of money that will fairly compensate

plaintiffs for any loss to their business or property that you

find was proximately caused by” the racetracks’ unlawful ac‐

tions (emphasis added).

The district court was on solid ground here because the

racetracks never mentioned using the 60‐day rule in relation

to damages in the argument surrounding the 60‐day rule’s ad‐

missibility. Before trial, the racetracks argued that the 60‐day

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36 No. 15‐2526

rule was relevant to whether the casinos had carried their bur‐

den of showing proximate cause. When that argument did not

work, they argued it was relevant to their lack of motivation

to bribe Blagojevich. They never mentioned damages. The

district court’s ruling on the motions in limine admitted evi‐

dence of the 60‐day rule on a “motive theory of relevance,”

and on the condition that the racetracks make an offer of proof

that they were aware of the rule at the relevant time.

The racetracks now deny that their appellate argument is

a challenge to the district court’s jury instruction on proximate

cause. They assert that their argument related only to dam‐

ages stemming from Blagojevich’s signature of the 2008 Act,

not whether the racetracks’ actions caused Blagojevich to sign

the 2008 Act. The racetracks argue that the casinos’ injury is

easily divisible so that the damages argument does not con‐

tradict our previous rejection of the 60‐day rule as a bar to

proving proximate causation, which the district court cited in

its ruling on the motions in limine. See Empress Casino III, 763

F.3d at 733 (“the Racetracks may be ‘jointly and severally lia‐

ble for any indivisible injury legally caused by [their] tortious

conduct,’ regardless of innocent alternative causes”) (altera‐

tion in original), quoting Restatement (Third) of Torts: Appor‐

tionment of Liability § 12.  

Perhaps these might have been good arguments to make

to the district court before trial or while hammering out jury

instructions. As the district court pointed out, though, “at no

point did defendants suggest that even if the Court accepted

the plaintiffs’ proposed proximate cause definition as to lia‐

bility, a different instruction was warranted for damages.”

The district court did not abuse its discretion in disallowing

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No. 15‐2526 37

at closing a surprise use of evidence that contradicted the jury

instructions.

*    *    *

To sum up, we affirm the decisions and judgment of the

district court in all respects except one: the jury did not have

a legally sufficient basis in the evidence to allow them to find

that there was a pattern of racketeering activity. Accordingly,

we AFFIRM the district court’s denial of the Rule 59 motion

for a new trial, REVERSE the district court’s denial of the race‐

tracks’Rule 50(b) renewed motion for judgment as a matter of

law as to the RICO count, and REMAND this case for entry of

a modified judgment consistent with this opinion. The plain‐

tiff casinos remain entitled to the $25,940,000 in damages for

the state‐law claims, but they are not entitled to have those

damages trebled under RICO.

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