IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

TRIUMPH PACKAGING GROUP, )

an Illinois corporation, )

)

Plaintiff, )

)

v. )

)

SCOTT WARD, et al., ) Case No. 11 C 7927

)

Defendants. ) 

____________________________________)

SCOTT WARD, )

)

Counter-Claimant and )

Third-Party Plaintiff, )

)

v. )

)

TCG PACKAGING SERVICES, LLC )

d/b/a/ TRIUMPH PACKAGING GROUP, )

et al., )

Counterclaim and )

Third-Party Defendants. )

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, District Court Judge:

On November 8, 2011, Plaintiff Triumph Packaging Group (“Triumph”) filed a sevencount Complaint against Scott Ward (“Ward”), Vital-X Associates, LLC (“Vital-X”), and

Creative Design Products, Inc. (“CDP”), alleging actual and threatened misappropriation of trade

secrets under the Illinois Trade Secrets Act, 765 ILCS 1065, et seq. (Count I), a violation of the

Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c) (Count II),

a common law breach of fiduciary duty claim (Count III), an Illinois tortious interference with

prospective economic advantage claim (Count IV), an Illinois civil conspiracy claim (Count V),
a common law breach of contract claim (Count VI), and a common law conversion claim (Count

VII) pursuant to the Court’s original and supplemental jurisdiction. See 28 U.S.C. §§ 1331,

1367(a). On December 3, 2013, the Court entered the parties’ stipulation of dismissal as to

Triumph’s Illinois Trade Secrets Act claim alleged in Count I and its tortious interference with

prospective economic advantage claim alleged in Count IV. Therefore, Triumph’s remaining

claims include its civil RICO claim in Count II and its state law claims in Counts III, V, VI and

VII.

On July 27, 2012, Ward, as Counter-Claimant and Third-Party Plaintiff, filed a First

Amended Counter-Claim and Third-Party Complaint against Triumph and Third-Party

Defendants Randall Cecola (“Cecola”), DTG Services Group, Inc. (“DTG”), Kallahan Marketing

Group, Inc. (“Kallahan”), Darwin Technology (“Darwin”), and Tesoro Realty Group, LLC

(“Tesoro”). Specifically, Ward alleged a common law fraudulent inducement claim (Count I), a

claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §

1962(c) (Count II), a common law breach of fiduciary duty claim (Count III), an Illinois civil

conspiracy claim (Count IV), a common law conversion claim (Count V), and two common law

unjust enrichment claims (Counts VI and VII) pursuant to the Court’s original and supplemental

jurisdiction. See 28 U.S.C. §§ 1331, 1367(a). On October 29, 2012, the Court granted

Triumph’s and the Third-Party Defendants’ motion to dismiss the First Amended Counterclaim

and Third-Party Complaint as to Counts II, III, IV, and V and dismissed these counts with

prejudice.1

 Therefore, Ward’s remaining claims include his common law fraudulent inducement

1

 The Court presumes familiarity with its previous orders in this lawsuit, including the

Court’s denial of Triumph’s motion for a preliminary injunction on December 2, 2011. (R. 47.) 

2
claim as alleged in Count I and his two common law unjust enrichment claims as alleged in

Counts VI and VII. 

Before the Court are Triumph’s motion for summary judgment, the Third-Party

Defendants’ motion for summary judgment, and Ward’s motion for partial summary judgment

all brought pursuant to Federal Rule of Civil Procedure 56(a). (R. 170, 172, & 176.) For the

following reasons, the Court grants in part Ward’s motion for partial summary judgment as to

Triumph’s civil RICO claim as alleged in Count II of Triumph’s Complaint and dismisses Count

II with prejudice. Because the Court is dismissing with prejudice the only claim in this lawsuit

over which the Court has original jurisdiction, see 28 U.S.C. § 1331, the Court declines to

exercise supplemental jurisdiction over the remaining state law claims. See 28 U.S.C. § 1367(c). 

Therefore, the Court dismisses the state law claims alleged in Counts III, V, VI and VII of

Triumph’s Complaint and Counts II, VI and VII of Ward’s First Amended Complaint without

prejudice for lack of subject matter jurisdiction. Last, because the Court considered the parties’

arguments regarding any alleged Local Rule 56.1 violations in the context of determining the

relevant facts, the Court denies Ward’s motions to strike as moot. (R. 190, 199, & 201.) 

BACKGROUND

I. Northern District of Illinois Local Rule 56.1

Local Rule 56.1 “is designed, in part, to aid the district court, ‘which does not have the

advantage of the parties’ familiarity with the record and often cannot afford to spend the time

combing the record to locate the relevant information,’ in determining whether a trial is

necessary.” Delapaz v. Richardson, 634 F.3d 895, 899 (7th Cir. 2011) (citation omitted). Local

Rule 56.1(a)(3) requires the moving party to provide “a statement of material facts as to which

3
the moving party contends there is no genuine issue.” Cracco v. Vitran Exp., Inc., 559 F.3d 625,

632 (7th Cir. 2009). “The opposing party is required to file ‘a response to each numbered

paragraph in the moving party’s statement, including, in the case of any disagreement, specific

references to the affidavits, parts of the record, and other supporting materials relied upon.” Id.

(citing N.D. Ill. R. 56.1(b)(3)(B)). Local Rule 56.1(b)(3)(C) requires the nonmoving party to

present a separate statement of additional facts that requires the denial of summary judgment. 

See Ciomber v. Cooperative Plus, Inc., 527 F.3d 635, 643-44 (7th Cir. 2008). 

In general, the purpose of Local Rule 56.1 statements and responses is to identify the

relevant admissible evidence supporting the material facts, not to make factual or legal

arguments. See Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 2006) (“statement of material

facts did [] not comply with Rule 56.1 as it failed to adequately cite the record and was filled

with irrelevant information, legal arguments, and conjecture”). “When a responding party’s

statement fails to dispute the facts set forth in the moving party’s statement in the manner

dictated by the rule, those facts are deemed admitted for purposes of the motion.” Cracco, 559

F.3d at 632. It is well-established in this Circuit that “district judges are entitled to insist on

strict compliance with local rules designed to promote the clarity of summary judgment filings.” 

Stevo v. Frasor, 662 F.3d 880, 887 (7th Cir. 2011). 

In sum, “[f]or litigants appearing in the Northern District of Illinois, the Rule 56.1

statement is a critical, and required, component of a litigant’s response to a motion for summary

judgment. The purpose of the local rule is to make the summary judgment process less

burdensome on district courts, by requiring the parties to nail down the relevant facts and the

way they propose to support them.” Sojka v. Bovis Lend Lease, Inc., 686 F.3d 394, 398 (7th Cir.

4
2012). With these standards in mind, the Court turns to the relevant facts of this case.

II. Relevant Facts 

Triumph, a manufacturer of food product packaging, is an Illinois corporation with its

principal place of business in Bolingbrook, Illinois. (R. 178, Ward’s Rule 56.1 Stmt. Facts ¶¶ 1,

8.) Triumph has facilities in both Illinois and Georgia. (R. 175, Triumph-Third-Party Rule 56.1

Stmt. Facts ¶ 36.) Randall Cecola (Cecola”) is the owner and Chief Executive Officer (“CEO”)

of Triumph. (Id. ¶ 2.) Ward is the former Chief Operating Officer (“COO”) of Triumph. 

(Ward’s Stmt. Facts ¶ 7.) Vital-X and CPD were Ward’s companies of which he was the sole

actor, owner, and representative. (Id. ¶¶ 4, 32.) Ward created Vital-X on February 16, 2010 and

operated it until August 12, 2011 when the Illinois Secretary of State involuntarily dissolved it. 

(R. 183, Triumph-Third-Party Add’l Facts ¶ 1.) On June 2, 2011, Ward formed CDP and the

parties do not dispute that the Illinois Secretary of State involuntarily dissolved it. (Id. ¶ 4;

Ward’s Stmt. Facts ¶ 4.) Mighty-Pac, Inc. (“Mighty-Pac”) is a Palatine, Illinois business run by

Mike Pastore. (Ward’s Stmt. Facts ¶¶ 35, 36.) Silvestri Sweets, Inc. (“Silvestri Sweets”) is a

candy company based in Geneva, Illinois. (Id. ¶ 40; Triumph-Third-Party Stmt. Facts ¶ 40.) 

As Triumph’s COO, Ward ran Triumph’s day-to-day operations. (Triumph-Third-Party

Stmt. Facts ¶ 20; Ward’s Stmt. Facts ¶ 56.) Triumph gave Ward considerable freedom and

responsibility with respect to the management of Triumph and in his interactions with Triumph’s

customers, vendors, and other key business contacts. (Triumph-Third-Party Stmt. Facts ¶ 20.) 

At Triumph, Ward was also involved with sales, pricing, purchasing raw materials, production,

manufacturing, marketing, and hiring and firing. (Ward’s Stmt. Facts ¶ 57.) In addition to his

responsibilities with respect to operations, Triumph tasked Ward with generating more business

5
for Triumph. (Triumph-Third-Party Stmt. Facts ¶ 21; R. 193, Ward’s Add’l Stmt. Facts ¶ 22.) It

is undisputed that Triumph fired Ward on September 20, 2011. Ward is currently the General

Manager of AGI North America, LLC’s (“AGI”) Indianapolis, Indiana facility. (Ward’s Stmt.

Facts ¶ 10.) AGI, now known as ASG-Shorewood Group, produces paper and plastic packaging. 

(Id. ¶ 12.)

SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate “if the movant shows that there is no genuine dispute

as to any material fact and the movant is entitled to judgment as a matter of law.” Spurling v. C

& M Fine Pack, Inc., 739 F.3d 1055, 1060 (7th Cir. 2014) (quoting Fed.R.Civ.P. 56(a)). A

genuine dispute as to any material fact exists if “the evidence is such that a reasonable jury could

return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,

106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In determining summary judgment motions,

“facts must be viewed in the light most favorable to the nonmoving party only if there is a

‘genuine’ dispute as to those facts.” Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167

L.Ed.2d 686 (2007). The party seeking summary judgment has the burden of establishing that

there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317,

323, 106 S. Ct. 2548, 91 L.Ed.2d 265 (1986). After “a properly supported motion for summary

judgment is made, the adverse party ‘must set forth specific facts showing that there is a genuine

issue for trial.’” Anderson, 477 U.S. at 255 (quotation omitted). 

6
ANALYSIS

I. Triumph’s Civil RICO Claim

In his motion for partial summary judgment, Ward argues that Triumph has failed to

present evidence creating a genuine dispute of material fact in regard to Triumph’s civil RICO

claim against Defendants Ward, Vital-X, and CPD, and thus the Court should dismiss Triumph’s

civil RICO claim as a matter of law. See 18 U.S.C. §§ 1962(c), 1964(c). “Congress passed

RICO in an effort to combat organized, long-term criminal activity.” Jennings v. Auto Meter

Prods., Inc., 495 F.3d 466, 472 (7th Cir. 2007). To that end, “RICO makes it ‘unlawful for any

person employed by or associated with any enterprise engaged in, or the activities of which

affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the

conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of

unlawful debt.’” Boyle v. United States, 556 U.S. 938, 944, 129 S.Ct. 2237, 173 L.Ed.2d 1265

(2009) (quoting 18 U.S.C. § 1962(c)). To establish a civil violation of Section 1962(c), a

plaintiff must show: “(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, 496–97, 105 S.Ct. 3275, 87 L.Ed.2d 346

(1985); see also Rao v. BP Prods. N. Am., Inc., 589 F.3d 389, 399 (7th Cir. 2009). The Court

turns to whether Triumph has presented evidence creating a genuine issue of material fact for

trial regarding whether there was a “pattern” of racketeering activity because it is dispositive. 

See Williams v. Aztar Ind. Gaming Corp., 351 F.3d 294, 298 (7th Cir. 2003) (“The viability of

[plaintiff’s] RICO claim turns on whether he has established a pattern of racketeering activity,

which is an essential element of a claim under the RICO statute.”); Pizzo v. Bekin Van Lines Co.,

258 F.3d 629, 633 (7th Cir. 2001) (“The requirement of proving ‘pattern’ is central to the

7
statute.”).

“A pattern of racketeering activity consists, at the very least, of two predicate acts of

racketeering committed within a ten-year period.” Jennings, 495 F.3d at 472; see also H.J. Inc.

v. Northwestern Bell Tel. Co., 492 U.S. 229, 238, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989)

(“while two acts are necessary they may not be sufficient.”) (citation omitted). “‘Racketeering

activity’ is limited to the specific acts statutorily enumerated in 18 U.S.C. § 1961(1).” DeGuelle

v. Camilli, 664 F.3d 192, 199 (7th Cir. 2011). These acts include mail fraud in violation of 18

U.S.C. § 1341, wire fraud in violation of 18 U.S.C. § 1343, and transporting stolen goods in

interstate commerce in violation of 18 U.S.C. § 2314, among other indictable acts. See id;

Williams, 351 F.3d at 298; 18 U.S.C. § 1961(1). 

“[T]o show a pattern of racketeering activity, a plaintiff must demonstrate a relationship

between the predicate acts as well as a threat of continuing activity.” DeGuelle, 664 F.3d at 199;

see also Roger Whitmore’s Auto. Servs., Inc. v. Lake County, Ill.,424 F.3d 659, 672 (7th Cir.

2005). “A relationship is established if the criminal acts ‘have the same or similar purposes,

results, participants, victims, or methods of commission, or otherwise are interrelated by

distinguishing characteristics and are not isolated events.’” DeGuelle, 664 F.3d at 199 (citation

omitted). “[T]he continuity requirement exists to give effect to Congress’s clear intention that

RICO target long-term criminal behavior.” Jennings, 495 F.3d at 473. “‘Continuity’ is both a

closed- and open-ended concept.” H.J. Inc., 492 U.S. at 241. “Closed-ended continuity refers to

criminal behavior that has ended but ‘the duration and repetition of the criminal activity carries

with it an implicit threat of continued criminal activity in the future.’” DeGuelle, 664 F.3d at

199 (citation omitted). “[O]pen-ended continuity requires a showing of past conduct that ‘by its

8
nature projects into the future with a threat of repetition.’” Id. (quoting H.J., 492 U.S. at 241).

Assuming for purposes of Ward’s motion for partial summary judgment that Triumph has

presented sufficient evidence satisfying the relationship requirement for a “pattern” of

racketeering, the parties dispute whether Triumph has set forth evidence establishing a genuine

factual dispute for trial regarding the continuity requirement. More specifically, Triumph

maintains that it has presented evidence that the actions of the alleged enterprise, involving

Ward, Vital-X, and CDP, as well as Silvestri Sweets and Mighty-Pac, occurred over a period of

22 months, which Triumph argues satisfies the time period requirement for closed-ended

continuity. “In order to demonstrate a pattern over a closed period, a RICO plaintiff must

‘prov[e] a series of related predicates extending over a substantial period of time.’” Vicom, Inc.

v. Harbridge Merch. Servs., Inc., 20 F.3d 771, 779 (7th Cir. 1994) (emphasis added) (quoting

H.J., 492 U.S. at 242). Although the Seventh Circuit has “not employed a bright-line rule for

how long a closed period must be to satisfy continuity,” it has not “hesitated to find that closed

periods of several months to several years did not qualify as ‘substantial’ enough to satisfy

continuity.” Roger Whitmore’s Auto. Servs., 424 F.3d at 673. In determining whether there is

continuity, the Court considers the following factors: “(1) the number and variety of predicate

acts and the length of time over which they were committed, (2) the number of victims, (3) the

presence of separate schemes, and (4) the occurrence of distinct injuries.” Id. (citing Morgan v.

Bank of Waukegan, 804 F.2d 970, 975 (7th Cir. 1986)). The Court’s analysis of “the continuity

prong is fact-specific and undertaken with the goal of achieving a ‘natural and commonsense’

result, consistent with Congress’s concern with long-term criminal conduct.” Roger Whitmore’s

Auto. Servs., 424 F.3d at 673 (citation omitted); see also Hartz v. Friedman, 919 F.2d 469, 472

9
(7th Cir. 1990) (“The pattern requirement is difficult to define and requires courts to use

common sense.”).

In response to Ward’s motion, Triumph argues that starting in November 2009, Ward

utilized his two pre-existing business entities Vital-X and CPD in agreement with two other

companies, Mighty-Pac and Silvestri Sweets, to funnel money away from Triumph for Ward’s

own benefit. Triumph specifically argues that Ward, acting in concert with his two separate

corporate entities and these non-parties, accepted kickbacks from Triumph’s customers and

suppliers and entered into an agreement with a former Triumph customer, Silvestri Sweets, in

which he ran secret packaging orders using Triumph’s facilities, equipment, and employees. 

Viewing the facts and all reasonable inferences in Triumph’s favor, as the Court is

required to do at this procedural process, Triumph sets forth evidence that Ward received

kickbacks from companies, such as Forest Packaging Company, starting in November 2009 and

that these kickbacks were for payments of goods and services that Triumph provided. (TriumphThird-Party Stmt. Facts ¶¶ 32, 33.) Ward, for example, required a kickback from an equipment

supplier, Delta Machine Service, Inc., in June or July 2011, by demanding that Delta Machine

increase the prices it charged Triumph for equipment and then pay Ward a kickback on the

difference. (Id. ¶ 37; Triumph-Third-Party Stmt. Add’l Facts ¶ 9.) These kickbacks to Ward

were routed through Michael Pastore and his company Mighty-Pac or through Vital-X. 

(Triumph-Third-Party Stmt. Facts ¶ 34; Triumph-Third-Party Add’l Facts ¶ 7.) Triumph also

asserts that Ward never disclosed these kickbacks, or as Ward called them “commissions,” to

Triumph. (Triumph-Third-Party Stmt. Facts ¶ 35.) Further, Triumph contends that Vital-X

funneled kickbacks to Ward, although Triumph does not set forth the time period of these

10
kickbacks. (Id. ¶ 36.) 

In addition, in January 2011, Ward offered Triumph’s goods and services to Silvestri

Sweets for his own personal gain. (Id. ¶ 41.) Specifically, Triumph maintains that in 2011,

Ward manufactured packaging for Silvestri Sweets by using Triumph’s resources, equipment,

and employees. (Id. ¶ 43.) In March 2011, for example, Ward shipped twelve pallets of

Triumph-produced boxes from Triumph’s Georgia location to Silvestri Sweets in Illinois. 

(Triumph-Third-Party Add’l Facts ¶ 8.) Triumph further asserts that on at least two occasions

materials and paper necessary to complete Ward’s scheme were shipped between Triumph’s

Georgia and Illinois facilities and required use of Triumph’s employees. (Id. ¶¶ 11, 12.) In June

or July 2011, Ward, through Vital-X, quoted to Silvestri Sweets another project that Triumph

would complete by using Triumph’s resources in Georgia. (Id. ¶ 9; Triumph-Third-Party Stmt.

Facts ¶ 45.) Furthermore, Ward used Triumph’s resources to design and produce additional

packaging for Silvestri Sweets in August 2011. (Triumph-Third-Party Stmt. Facts ¶ 46.) In

total, Ward designed and ran four “secret” packaging runs through Triumph’s facilities causing

Triumph at least $147,086.40 in damages. (Id. ¶ 47; Triumph-Third-Party Add’l Facts ¶¶ 6, 13.)2

Construing these facts and all reasonable inferences in Triumph’s favor for purposes of

Ward’s motion for partial summary judgment, Triumph has not supplied sufficient evidence to

2

 The Court disregards the additional facts Triumph and the Third-Party Defendants have

set forth in their Local Rule 56.1(b) Response to Ward’s Local Rule 56.1(a) Statement of Facts

(R. 183) and Response to Ward’s Local Rule 56.1(b) Statement of Additional Facts (R. 193) as

failing to comply with the local rules. See Schmidt v. Eagle Waste & Recycling, Inc., 599 F.3d

626, 630 (7th Cir. 2010). Under Local Rule 56.1, Triumph and the Third-Party Defendants were

required to respond to the Ward’s proposed findings paragraph by paragraph and put their own

proposed findings of fact in a separate document. See id.; Ciomber v. Cooperative Plus, Inc.,

527 F.3d 635, 643-44 (7th Cir. 2009); Cichon v. Exelon Generation Co., LLC, 401 F.3d 803, 809

(7th Cir. 2005). 

11
satisfy the closed-ended continuity requirement under the multi-factor Morgan test. See Roger

Whitmore’s Auto. Servs., 424 F.3d at 673; Morgan, 804 F.2d at 975. First, according to

Triumph, the time period of the “pattern” of racketeering started in November 2009 — although

it is undisputed that neither Vital-X or CDP were in existence in November 2009. In any event,

the time period ended in September 2011, which is 22 months, and the Seventh Circuit has

concluded that closed periods of several months to several years do not necessarily qualify as

“substantial” enough to satisfy continuity. See id.3 (citing Midwest Grinding Co., Inc. v. Spitz,

976 F.2d 1016, 1024 (7th Cir. 1992) (collecting cases)); see, e.g., Talbot v. Robert Matthews

Distrib. Co., 961 F.2d 654, 663 (7th Cir. 1992) (scheme lasting a “period of years” did not

satisfy closed-ended continuity). In Roger Whitmore’s Auto. Servs., for example, the time period

was “at most about two years.” Id. at 673. As such, the time period of 22 months weighs against

finding close-ended continuity, especially in light of the other relevant Morgan factors discussed

immediately below. See Jennings, 495 F.3d at 473-74 (“The duration of the alleged racketeering

activity is ‘perhaps the most important element of RICO continuity.’”) (quoting Roger

Whitmore’s Auto. Servs., 424 F.3d at 673).

3

 Triumph relies on one of the district court’s decisions in Roger Whitemore’s Auto

Servs. for the proposition that 28 months is a substantial amount of time. See Roger Whitmore’s

Auto. Servs., Inc. v. Lake County, Ill., No. 99 C 2504, 2002 WL 959587, at *4 (N.D. Ill. May 9,

2002). Not only was the district court’s May 9, 2002 decision in the context of a motion to

dismiss pursuant to Rule 12(b)(6), but after plaintiffs appealed the district court’s grant of

defendants’ summary judgment motion, the Seventh Circuit clearly articulated that “[a]lthough

we have not employed a bright-line rule for how long a closed period must be to satisfy

continuity, we have not hesitated to find that closed periods of several months to several years

did not qualify as ‘substantial’ enough to satisfy continuity.” Roger Whitmore’s Auto. Servs.,

Inc. v. Lake County, Ill.,424 F.3d 659, 672 (7th Cir. 2005). As such, Triumph’s reliance on the

district court’s decision is misplaced. 

12
As to the Morgan factor regarding the number of victims, Triumph admits that it is the

only victim of Ward’s alleged scheme when it argues that “Ward conducted a pattern of

racketeering activity to defraud Triumph out of hundreds of thousands of dollars” and that the

allege scheme involved “the same victim (Triumph).” (R. 184, Resp. Mem., at 6-7.) The fact

that there was only one victim further weighs against Triumph’s argument that it has established

closed-ended continuity. See Roger Whitmore’s Auto. Servs., 424 F.3d at 673-74. Furthermore,

“[t]here is no indication that the defendants engaged in any other racketeering scheme before or

after that closed period.” Id. at 674.

The number and variety of predicate acts is also lacking, especially due to the fact that 

“mail and wire fraud allegations are unique among predicate acts because the multiplicity of

such acts may be no indication of the requisite continuity of the underlying fraudulent activity.” 

Midwest Grinding Co., 976 F.2d at 1024 (internal quotations omitted, citation omitted); see also

Vicom, 20 F.3d at 781. Nevertheless, Triumph also argues that the predicate acts included

transporting stolen goods in interstate commerce, 18 U.S.C. § 2314, specifically two shipments

between Georgia and Illinois in relation to the “secret” production jobs for Silvestri Sweets. 

These two predicate acts — along with the mail and wire fraud allegations — comprise a fairly

small number of predicate acts weighing against a showing of closed-ended continuity,

“particularly when a large proportion of the acts involved wire or mail fraud, neither of which

are favored means of establishing a RICO pattern in this circuit.” Roger Whitmore’s Auto.

Servs., 424 F.3d at 673; see also Meier v. Musburger, 588 F.Supp.2d 883, 900 (N.D. Ill. 2008)

(Although RICO “defines a pattern of racketeering activity as consisting of at least two predicate

acts of racketeering committed within a ten-year period, two of anything seldom make out a

13
pattern.”) (internal citations omitted).

Next, the Court looks to the Morgan factors of whether Ward’s alleged misconduct

comprised separate schemes and the schemes’ distinct injuries. See Roger Whitmore’s Auto.

Servs., 424 F.3d at 673-74; see also Vicom, 20 F.3d at 782 (“the number of schemes is still

relevant as to whether continuity exists.”). Construing Triumph’s evidence in its favor, there

were two separate schemes, at best. Specifically, Triumph argues that Ward, acting in concert

with his two separate corporate entities and non-parties Mighty-Pac and Silvestri Sweets, (1)

accepted kickbacks from Triumph’s customers and suppliers, and (2) entered into an agreement

with a former Triumph customer, Silvestri Sweets, to run secret packaging orders using

Triumph’s facilities, equipment, and employees. Although a RICO pattern may be premised on

one or two schemes, Ward’s alleged misconduct lasted approximately 22 months and involved

only one victim, a handful of predicate acts, and just two distinct injuries of approximately

$57,500 from the kickback scheme and $150,000 in relation to the “secret” packaging runs. 

(Triumph-Third-Party Stmt. Facts ¶ 36, 47.) Under these circumstances, using a “natural and

commonsense” approach, the Court would be hard-pressed to concluded that Triumph has

established the continuity requirement to show a “pattern” of racketeering activity. See Roger

Whitmore’s Auto. Servs., 424 F.3d at 673; see also H.J., 492 U.S. at 239 (“A pattern is not

formed by ‘sporadic activity.’”) (citation omitted). Indeed, as the Seventh Circuit teaches,

“[a]lthough § 1964(c) provides a private civil action to recover treble damages for violations of

RICO’s substantive provisions, the statute was never intended to allow plaintiffs to turn

garden-variety state law fraud claims into federal RICO actions.” Jennings, 495 F.3d at 472. 

14
It is well-established that Rule 56 “mandates the entry of summary judgment ... against a

party who fails to make a showing sufficient to establish the existence of an element essential to

that party’s case, and on which that party will bear the burden of proof at trial.” See Celotex

Corp., 477 U.S. at 322. As the Supreme Court further explains, “[i]n such a situation, there can

be ‘no genuine issue as to any material fact,’ since a complete failure of proof concerning an

essential element of the nonmoving party’s case necessarily renders all other facts immaterial.” 

Id. at 322-23 (citation omitted). Here, Triumph has failed to present evidence raising a genuine

issue of material fact for trial that Ward’s conduct — in conjunction with CDP, Vital-X, Silvestri

Sweets, and Mighty Pac — exhibited a “pattern” of racketeering. Accordingly, the Court grants

Ward’s motion for partial summary judgment as to Triumph’s civil RICO claim alleged in Count

II of Triumph’s Complaint and dismisses Count II with prejudice.

II. The Parties’ State Law Claims

The parties’ remaining claims are pursuant to state law and include Counts III, V, VI and

VII of Triumph’s Complaint and Counts II, VI and VII of Ward’s First Amended Complaint. 

Because the Court is dismissing, with prejudice, Triumph’s claim over which the Court has

original jurisdiction, namely, the civil RICO claim pursuant to 18 U.S.C. § 1962(c) as alleged in

Count II of Triumph’s Complaint, the Court declines to exercise supplemental jurisdiction over

the remaining state law claims. See 28 U.S.C. § 1367(c). 

As the Seventh Circuit teaches, “[t]he supplemental-jurisdiction statute provides that the

district court ‘may decline to exercise supplemental jurisdiction” over state-law claims if the

court ‘has dismissed all claims over which it has original jurisdiction.’” RWJ Mgmt. Co., Inc. v.

BP Prods. N. Am., Inc., 672 F.3d 476, 479 (7th Cir. 2012) (quoting 28 U.S.C. § 1367(c)(3)); see

15
also Cortezano v. Salin Bank & Trust Co., 680 F.3d 936, 941 (7th Cir. 2012) (“Generally, when

a court has dismissed all the federal claims in a lawsuit before trial, it should relinquish

jurisdiction over supplemental state law claims rather than resolve them on the merits.”). 

Although the decision to relinquish supplemental jurisdiction is within the district court’s broad

discretion, “[w]hen all federal claims in a suit in federal court are dismissed before trial, the

presumption is that the court will relinquish federal jurisdiction over any supplemental state-law

claims.” RWJ Mgmt. Co., 672 F.3d at 479 (quoting Al’s Serv. Ctr. v. BP Prods. N. Am., Inc.,

599 F.3d 720, 727 (7th Cir. 2010)). Under this well-established precedent, the Court declines to

exercise supplemental jurisdiction over the remaining state law claims and dismisses Triumph’s

claims as alleged in Counts III, V, VI and VII of Triumph’s Complaint and Counts II, VI and VII

of Ward’s First Amended Complaint without prejudice. 

CONCLUSION

For the reasons set forth above, the Court grants in part Ward’s motion for partial

summary judgment as to Count II of Triumph’s Complaint and dismisses Count II with

prejudice. The Court declines to exercise supplemental jurisdiction over the remaining state law

claims and dismisses without prejudice Counts III, V, VI and VII of Triumph’s Complaint and

Counts II, VI and VII of Ward’s First Amended Complaint for lack of subject matter jurisdiction. 

The Court denies Ward’s motions to strike as moot.

Dated: March 11, 2014

ENTERED 

_______________________________

AMY J. ST. EVE

United States District Court Judge

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