In the

United States Court of Appeals

For the Seventh Circuit

Nos. 10-3062, 10-3068

BCS SERVICES, INC., et al.,

Plaintiffs-Appellants,

v.

HEARTWOOD 88, LLC, et al.,

Defendants-Appellees.

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

Nos. 05 C 4095, 07 C 1367—James F. Holderman, Chief Judge.

ARGUED FEBRUARY 24, 2011—DECIDED MARCH 24, 2011

Before BAUER, POSNER, and MANION, Circuit Judges.

POSNER, Circuit Judge. These consolidated appeals are

from judgments in two suits seeking damages under the

Racketeer Influenced and Corrupt Organizations Act

(RICO), 18 U.S.C. §§ 1961 et seq., for mail fraud. (The

suits are materially identical so we’ll pretend that

they’re one case and that the two appeals are also one.)

The district court dismissed the case more than five

years ago on the ground that the plaintiffs lacked

standing to sue because they hadn’t relied on the fraud
2 Nos. 10-3062, 10-3068

and therefore “at best were indirect victims of the alleged

fraud.” Phoenix Bond & Indemnity Co. v. Bridge, 2005 WL

3527232, at *5 (N.D. Ill. Dec. 21, 2005). We reversed, 477

F.3d 928 (7th Cir. 2007), and the Supreme Court affirmed

our decision. 553 U.S. 639 (2008). The case returned to

the district court, which has again dismissed, this time

by granting summary judgment for the defendants on

the ground that the plaintiffs can’t prove that the fraud

was a “proximate cause” of their alleged losses. Although

that sounds like a different ground from the first

dismissal, it’s actually pretty close. The district judge’s

second opinion states that “any number of reasons

wholly unrelated to Defendants’ alleged violations of the

SSBR [the rule that the defendants are alleged to have

violated to effectuate the fraud] could impact the value

of Plaintiffs’ lien portfolios: [among others,] the Treasurer’s determination of whether to bar Defendants

from the sales, and if so for how long; the actions of thirdparty bidders, including how quickly they bid; the auctioneers’ subjective awarding of liens; and the property

owners’ decision to redeem the property.” 2010 WL

3526469, at *14 (N.D. Ill. Sept. 1, 2010). The only significant difference between the two opinions is that in

round one the judge dismissed the suit because the plaintiffs were (he ruled) only indirect victims of the fraud

and in round two he granted summary judgment for

the defendants because he thought that although we

and the Supreme Court had held that the plaintiffs were

direct victims, they had not been injured directly; the

causal link between the fraud and the injury was “tenuous.” Id. at *13. The case is again before us on appeal by

the plaintiffs.
Nos. 10-3062, 10-3068 3

When an owner of property in Cook County, Illinois,

fails to pay his property tax on time, the amount of tax

that is due (which is to say past due) becomes a lien on

the property. The county sells its tax liens at auctions.

The bids at the auctions are stated as percentages of

the taxes past due. The percentage, multiplied by the

amount of past-due taxes (plus any interest due on

them, which we’ll ignore), is the “penalty” that the bidder

demands from the owner to clear the lien. The winning

bidder is the bidder who bids (that is, is willing to accept) the lowest penalty—often zero percent of the tax

due, meaning that the bidder is just offering to pay the

County the past-due taxes and receive in exchange the

lien. The taxpayer has two to three years in which to

erase the lien by paying the winner of the auction (and

hence new owner of the lien) the past-due taxes that the

winner had paid the County, plus the penalty (if any). If

the taxpayer fails to redeem by paying what he owes, the

purchaser of the lien can obtain a tax deed to the

property and thus become the property’s owner. In

deciding which tax liens being auctioned to bid for, and

how much to bid (whether a zero-percent penalty, or a

5 percent penalty, or any other percent), the would-be

tax lienor is looking for properties, (1) whose owners are

unlikely to redeem them by paying the past-due taxes

during the redemption period and (2) are worth more

than the past-due taxes on them.

The auctions are conducted in rapid-fire fashion in a

room in which the bidders bid by raising a card with

their bidder ID number and shouting out their penalty

percentage (usually “zero!”). Almost 85 percent of the
4 Nos. 10-3062, 10-3068

winning bids are at the zero-percent penalty level, which

implies that most bids are identical bids (identical zeropercent bids). How is the auctioneer to pick the winner

in such a case? It’s difficult! Suppose fifteen bidders

bid zero percent on a particular lien being auctioned. The

bids being identical, the auctioneer will try to award the

lien to the bidder who raised his hand first. But if many

bidders raised their hands as soon as the bidding began,

the auctioneer may find it impossible to determine

who raised his hand first, in which event he’ll probably

pick one of the zero bidders at random.

Bidders use a variety of tactics to attract the auctioneer’s attention, such as by lobbying to be given a seat

closer to the auctioneer so that the bidder’s raised hand

is more likely to be noticed first. A few of the auctioneers

claim improbably that they can always tell who raised

his or her hand first, no matter how many hands shoot

up all over the room, while others say that when there

are multiple identical bidders they try to allocate the

awards “fairly,” whatever that means—probably it just

means not awarding too many liens to the same bidder

at the same auction. So on the one hand liens are not

awarded on a strict rotational basis but on the other

hand a jury could find that most zero-percent awards

are the random product of guesswork.

The County’s rules permit only one agent of a potential

buyer, or of a group of cooperating buyers (“related

entities”), to bid. Otherwise a potential buyer could

increase the likelihood of winning by packing the room.

Suppose that a potential buyer, call him “BidCo,” was
Nos. 10-3062, 10-3068 5

represented by 10 persons—but the auctioneer thought

they were 10 different bidders—and all the other

potential buyers were represented by one person each,

as they’re supposed to be. BidCo would have a big advantage. If for example there were 21 potential buyers

and all bid zero percent for a particular tax lien,

30 hands would be shooting up but 10 of them would

belong to one buyer. Whether the auctioneer was able

to pick the bidder who raised his hand first, or as is

more likely there was simply a distribution of handraising speeds and well-sited seats, the buyer who had

10 hands in the room would have an advantage over

each of the other 20 potential buyers. He would be

likelier to have some fast hands and some ringside seats,

as well as having an advantage just by virtue of the

number of hands, when the auctioneer threw up his

hands and awarded liens randomly among the zeropercent bidders, or tried to rotate them among the

bidders in the interest of “fairness.” If BidCo’s violation

of the prohibition against related entities’ multiple

bidding were concealed, so that his scheme operated as

a fraud on the one-armed bidders, BidCo would have

engaged in a pattern of mail fraud in violation of RICO

because, as we explained in our first opinion, “the tax-sale

process employs the mail—perhaps to send affidavits, and

certainly to send notices to owners that the liens have

been sold and the taxes must be paid or the property

forfeited,” and “any fraud that affects which bidders

obtain how many liens is ‘mail fraud.’ ” 477 F.3d at 930.

The case is a little more complicated than we’ve let on

so far because three separate groups (whose members
6 Nos. 10-3062, 10-3068

are the defendants) of allegedly related entities are

accused of the fraud. As a result, instead of having just

three arms the defendants had between 11 and 39, with

up to 13 being used in a given auction session during

the six years in which the conspiracies are alleged to

have been operating. In each of the three conspiracies

a kingpin financed the bidding activity of the group’s

members and when the kingpin agent’s bidder would

win a lien the kingpin would buy it from him.

For purposes of this appeal (only), the defendants

concede that they committed a fraud actionable under

RICO if the plaintiffs can prove both proximate cause

and damages. The district judge granted summary judgment for the defendants because he thought that the

plaintiffs—two of the one-armed bidders at the auctions—had failed to produce evidence that the fraud

was a proximate cause of their losing any of the bidding

rounds.

The injection of the term “proximate cause” into this

litigation has muddied the waters. It was injected for

no better reason—and it is not a good reason—than that

it has figured in several RICO cases decided recently

by the Supreme Court, none comparable to this case.

You cannot obtain damages for fraud or any other

tort, whether you are litigating under common law or

the RICO statute, without proving that the fraud caused

a loss to you, such as a financial loss, for which

damages can be awarded. The problem is that there may

be multiple causes of your loss, obscuring the effect of

the defendant’s wrongful act. Sometimes the causes are
Nos. 10-3062, 10-3068 7

joint. For example, a passerby drops a match in a puddle

of oil created by a leak from a tanker truck, and the oil

explodes. HK Systems, Inc. v. Eaton Corp., 553 F.3d 1086,

1090 (7th Cir. 2009); Leposki v. Railway Express Agency, Inc.,

297 F.2d 849 (3d Cir. 1962); Overseas Tankship Ltd. v. Miller

Steamship Co., [1967] 1 A.C. 617 (P.C.) (The Wagon Mound

No. 2). Without both match and leak—hazards created

by separate persons—there would be no explosion and

so no harm. Who should be liable?

Sometimes causes are alternative: a person is stabbed

by two knife-wielding assailants, and either stab wound

would have been fatal. Should both be excused from

liability because neither was necessary for the injury

to occur? United States v. Johnson, 380 F.3d 1013, 1016

(7th Cir. 2004). And likewise when each of two wrongdoers could have caused the plaintiff’s injury and it is

unclear which did and each points at the other and says

let me off because the other guy may have done it.

Summers v. Tice, 199 P.2d 1 (Cal. 1948).

Or sometimes—and here is where the doctrine of proximate cause does its work—too many unexpected things

had to happen between the defendant’s wrongdoing

and the plaintiff’s injury, in order for the injury to

occur—so many unexpected things that the defendant

couldn’t have foreseen the effect of his wrongdoing and

therefore couldn’t have been influenced, in deciding

how much care to employ in the activity that produced

the wrongful act, by the prospect of inflicting such an

injury as occurred. See, e.g., Gallick v. Baltimore & Ohio

R.R., 372 U.S. 108, 118 and n. 7 (1963); HK Systems, Inc. v.
8 Nos. 10-3062, 10-3068

Eaton Corp., supra, 553 F.3d at 1090. And then holding

him liable would have little effect in deterring wrongful

conduct.

A better name for the application of the doctrine of

proximate cause in such a case would be “for want of a

nail the kingdom was lost”:

For want of a nail the shoe was lost.

For want of a shoe the horse was lost.

For want of a horse the rider was lost.

For want of a rider the battle was lost.

For want of a battle the kingdom was lost.

And all for the want of a horseshoe nail.

Suppose the blacksmith had been negligent in failing

to fasten the horseshoe to the horse’s hoof with enough

nails to hold it securely. His negligence was therefore

a cause of the loss of the kingdom because it led to the

loss of one of the riders, which led in turn to the defeat

of the king’s army. (And not just any rider: Shakespeare

in Richard III attributed Richard’s loss of the Battle of

Bosworth Field, and thus of his life and his crown, to

his falling off his horse because the horse was not

properly shod; in fact the horse had gotten mired in

the mud of the field, for reasons unrelated to his shoe.)

But had the blacksmith been told ahead of time that if

he didn’t fasten the shoe properly he could be responsible for the end of the York dynasty, the warning

would not have induced him to use additional care

in fastening the shoe to the hoof because the probability

that his negligence would have such a consequence

would have seemed slight. An injury will sometimes
Nos. 10-3062, 10-3068 9

have a cascading effect that no potential injurer could

calculate in deciding how carefully to act. The effect is

clear in hindsight—but only in hindsight.

A more realistic modern example would be a suit

against the defendants in our case by someone who lost

his job because the one-armed bidder who employed

him didn’t win enough tax liens at the auctions to be

able to afford to keep him on its payroll. The employee

would have suffered a loss caused by the defendants

(assuming their fraud was indeed what impelled the onearmed bidder to reduce his staff), but as in a literal wantof-a-nail case their conduct would not be deemed a

“proximate cause” of the employee’s loss of his job, and

so his suit would fail. Evans v. City of Chicago, 434 F.3d

916, 926-29 (7th Cir. 2006); Mid-State Fertilizer Co. v. Exchange Nat’l Bank, 877 F.2d 1333, 1335-36 (7th Cir. 1989);

Frank v. D’Ambrosi, 4 F.3d 1378, 1385 (6th Cir. 1993);

Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 23-24

(2d Cir. 1990). Similarly, a creditor who suffers a

default because his debtor was injured by a tort cannot

sue the tortfeasor for the damages resulting from the

default. In re Teknek, LLC, 563 F.3d 639, 645-50 (7th Cir.

2009); Koch Refining v. Farmers Union Central Exchange,

Inc., 831 F.2d 1339 (7th Cir. 1987). If the creditor could sue,

why not the creditor’s son who had to borrow for his

tuition because his father could no longer afford to pay

it? Or the college, if the son was turned down for a

loan and had to withdraw? Or the bookstore at which the

son would have bought the books for his courses had he

remained a student? Or the publisher of the books sold
10 Nos. 10-3062, 10-3068

by the bookstore? Or the companies that sold paper to

the publishers? Or the authors?

Notice how allowing any of those secondary or tertiary

or even more remote tort victims to obtain a judgment

would dim the primary victim’s prospects of obtaining

redress for his injury. Any tortfeasor’s resources are

limited. The more plaintiffs there are clamoring for

relief, the less in damages each one may be able to recover. That is a further reason, along with a desire

to limit the amount of litigation arising from a single

wrongful act and to confine tort liability to foreseeable

(as distinct from so improbable as to be unforeseeable)

consequences, for limiting the right to relief to the

initial victims of the wrong, as in James Cape & Sons Co.

v. PCC Construction Co., 453 F.3d 396 (7th Cir. 2006),

on which our defendants rely. The plaintiff, a competing bidder as in this case (hence the defendants’

reliance), sued the winning bidders on the ground

that they had agreed among themselves not to bid

less on state construction contracts than an agreed

amount, so as to maximize their profits from a

winning bid. (Probably they also agreed to rotate submission of the winning bid among the members of the

group, so that each would share in the profit opportunity that the conspiracy created.) The primary victim

was the State of Wisconsin, which had solicited the

bids; it had paid more for the construction contracts

obtained by the winning bidders than if there had been

no conspiracy. The plaintiff, in contrast, probably hadn’t

been injured at all and might well have benefited from

the conspiracy because the higher his competitors’ bids
Nos. 10-3062, 10-3068 11

the likelier he was to be the low bidder and win the

contract. See Phoenix Bond & Indemnity Co. v. Bridge, supra,

477 F.3d at 932.

There is still another reason for worrying about

imposing liability when the defendant’s conduct and the

plaintiff’s injury are separated by intermediate pairs

of cause and effect. The horseshoe was missing a nail,

yes, but it might have fallen off anyway, in the heat of

battle; and how likely is it that one downed rider (unless

it really was the king) made the difference between

victory and defeat? (And mightn’t he have fallen anyway?) And in the employment case, might not other

factors have doomed the employee’s job? There is plenty

of employee turnover even when the employer is not a

victim of fraud.

The “indirect purchaser” rule of Illinois Brick Co. v.

Illinois, 431 U.S. 720, 730-36 (1977), is a notable example

of the evidentiary concerns that lead courts to disregard

secondary causal relations. Suppose competing manufacturers conspire to raise the prices of their products,

in violation of federal antitrust law. The buyers—suppose

they’re retail dealers—pay the higher prices, but turn

around and raise the prices they charge their purchasers, the consumers, in an effort to minimize the

impact on their profits of the manufacturers’ higher

prices. The injury caused by the price-fixing conspiracy

is likely to be shared between the direct purchasers

from the conspirators and the indirect ones (the consumers in the example). But to determine the relative

hurt would require a complex inquiry, and so the

indirect purchasers, though harmed, are not allowed to
12 Nos. 10-3062, 10-3068

sue. This may seem a harsh result, but is mitigated by

the fact that the antitrust violators are not allowed to

offset against their liability the amount of loss that the

direct purchasers, the dealers, who are allowed to sue,

were able to pass on to their customers in the form of

higher prices. By allowing a windfall to the direct purchasers—they can sue for the full markup over the competitive price for the manufacturers’ product even if

they passed on much of the higher price to consumers—the

law gives them a greater incentive to sue, which should

increase deterrence, which should benefit the indirect

purchasers indirectly.

The doctrine of proximate cause thus protects the

ability of primary victims of wrongful conduct to obtain compensation; simplifies litigation; recognizes

the limitations of deterrence (unforeseeable consequences of a person’s acts will not influence his decision

on how scrupulously to comply with the law); and eliminates some actual or possible but probably minor causes

as grounds of legal liability. All this is true in RICO cases

just as in other tort cases whether common law or statutory. Holmes v. Securities Investor Protection Corp., 503

U.S. 258 (1992); HK Systems, Inc. v. Eaton Corp., supra, 553

F.3d at 1090.

The doctrine has no application to this case, at least on

the record compiled to date. The defendants’ aim was to

obtain a larger share of tax liens. The larger share came

from other bidders, the bidders we’re calling one-armed.

The only injury was to those bidders, who included the

two plaintiffs. The County’s rule limiting related entities
Nos. 10-3062, 10-3068 13

to a single bidding agent was intended for the benefit

of unrelated bidders rather than for its own benefit

(except very indirectly, insofar as the rule encouraged

bidding). It was a matter of indifference to the County

who bought the tax liens, for whoever it was would have

to pay the County the taxes on the properties subject to

the liens. The one-armed bidders were thus the only

victims of the fraud—and the plaintiffs were one-armed

bidders.

The defendants stole a business opportunity from the

plaintiffs by flooding the auction room with raised

hands that shouldn’t have been there. The only intermediate cause and effect pair was the raising of hands

(cause) and the auctioneer’s determination of the

winning bid (effect), and this pair doesn’t weaken the

inference that by having more hands in the air the defendants stole tax liens from the other bidders. That

would be obvious if the auctioneers awarded tax liens

in identical-bid cases on a strictly rotational basis, as the

Supreme Court assumed when, in its opinion affirming

our previous decision, it characterized the plaintiffs’

theory of causation as “straightforward.” 553 U.S. at 647;

see also Hemi Group, LLC v. City of New York, 130 S. Ct. 983,

992 (2010). Straightforward it was and after discovery

straightforward it remains because, as we shall see,

random awards—the character of many of the awards in

identical zero-percent bidding—are similar to awards

made on a strictly rotational basis.

The defendants argue that if there is any possible slip

‘twixt cup and lips (to continue law by proverb), the
14 Nos. 10-3062, 10-3068

plaintiff must prove that it did not occur. Not so. The

plaintiff doesn’t have to prove a series of negatives;

he doesn’t have to “’offer evidence which positively

exclude[s] every other possible cause of the accident.’ ”

Carlson v. Chisholm-Moore Hoist Corp., 281 F.2d 766, 770

(2d Cir. 1960) (Friendly, J.), quoting Rosenberg v. Schwartz,

183 N.E. 282, 283 (N.Y. 1932). In technical legal terms

the burden of proving an “intervening cause”—something

which snaps the “causal chain” (that is, operates as a

“superseding cause,” wiping out the defendant’s liability, see Restatement (Second) of Torts § 440 (1965))

that connects the wrongful act to the defendant’s injury—is on the defendant. Roberts v. Printup, 595 F.3d

1181, 1189-90 (10th Cir. 2010).

The district judge required the plaintiffs to prove the

nonexistence of potential superseding causes rather

than requiring the defendants to present evidence to

support their conjectured superseding causes. He said

that otherwise “a jury would be forced to speculate as

to whether Defendants violating the [related-entities

rule] would [if the Treasurer, who administers the taxlien auctions, had learned of the violation before or

during the complaint period] have been permanently

barred from the County tax lien sales, excluded for only

a day or a year, or faced some other unknown consequence.” 2010 WL 3526469, at *8. This possibility would

cancel the effect of the defendants’ fraud on the number

of liens won by the plaintiffs only if whatever sanction

the Treasurer imposed would have allowed the defendants to continue violating the related-entities rule:

for example if she would have barred them from bidding
Nos. 10-3062, 10-3068 15

for one day but allow them to resume their collusive

activity the day after. That is beyond unlikely, and

hardly “evidence” of a superseding cause that the plaintiffs would have to rebut in order to withstand summary judgment. And so the plaintiffs can’t be faulted, as

the defendants argue, for having failed to depose the

Treasurer—the defendants, who had the burden of

proving that the Treasurer would have let them off scot

free, didn’t do so either. Had the Treasurer forced the

defendants to stop colluding in violation of the relatedentities rule (and in violation as well of the oath they

had sworn, when they signed up to bid in the auction,

to comply with the related-entities rule), the one-armed

bidders would have obtained more liens than they did.

The defendants present other implausible speculations

concerning possible superseding causes, and demand

that the plaintiffs refute them. They argue that the “plaintiffs’ failure to obtain more liens than they actually won could have been the result of competition from

third-party bidders, the auctioneers’ subjective perceptions, or failures of Plaintiffs’ bidders to keep pace with

the auction and to bid on liens they may have intended

to bid on.” The defendants note that one of the plaintiffs

complained to the Treasurer’s Office that it was being

“relegated” to “seats in the back of the room where it

was difficult for the bidders to be recognized, and the

auctioneers to view them” and that a bidder for the

other plaintiff admitted that she might have been

slower at raising her hand than other bidders on some

occasions. But so far as yet appears—for of course there

has been no trial—these were isolated instances over the
16 Nos. 10-3062, 10-3068

course of six years. And as for whether the plaintiffs

were outbid by bidders who were not members of the

conspiracies, this is unlikely since the case is only about

identical zero-percent bids (so there are only low bidders,

rather than a lowest bid), and the defendants presented

no evidence to establish such a superseding cause of

the plaintiffs’ injury.

The defendants were throwing sand in the district

judge’s eyes. The object of their conspiracies was to

obtain liens that would otherwise go to one-armed

bidders—there could be no other reason for wanting to

pack the room in violation of the County’s rule. The

plaintiffs were major bidders. They bid for many thousands of liens. How likely is it that they lost no bids to

bidders who had 13 arms in the room but should have

had only three?

Once a plaintiff presents evidence that he suffered the

sort of injury that would be the expected consequence

of the defendant’s wrongful conduct, he has done

enough to withstand summary judgment on the ground

of absence of causation. Liriano v. Hobart Corp., 170 F.3d

264, 271-72 (2d Cir. 1999); Kingston v. Chicago & N.W. Ry.,

211 N.W. 913, 915 (Wis. 1927); Martin v. Herzog, 126 N.E.

814, 816 (N.Y. 1920) (Cardozo, J.) (“evidence of a collision

occurring more than an hour after sundown between a

car and an unseen buggy, proceeding without lights, is

evidence from which a causal connection may be

inferred between the collision and the lack of signals”). The

causal relation between a defendant’s act and a plaintiff’s injury, like that required to establish standing under
Nos. 10-3062, 10-3068 17

Article III of the Constitution, need only be probable.

Clinton v. City of New York, 524 U.S. 417, 432-33 (1998);

MainStreet Organization of Realtors v. Calumet City, 505

F.3d 742, 744-45 (7th Cir. 2007); Village of Elk Grove

Village v. Evans, 997 F.2d 328, 329 (7th Cir. 1993). Otherwise how could a person obtain a judgment for medical

malpractice based on a failure to diagnose a disease

that proved fatal but had it been diagnosed earlier might

have been cured? Matsuyama v. Birnbaum, 890 N.E.2d

819, 828-31 and n. 23 (Mass. 2008); Holton v. Memorial

Hospital, 679 N.E.2d 1202, 1213 and n. 2 (Ill. 1997); Doll

v. Brown, 75 F.3d 1200, 1205-07 (7th Cir. 1996). And how

could four equally qualified employees who were discriminated against when a company made a single promotion obtain any relief? Yet we’ve held that the plaintiff in such a discrimination case is entitled to damages

equal to 25 percent of the pay he would have received

had he gotten the promotion. Biondo v. City of Chicago, 382

F.3d 680, 688-89 (7th Cir. 2004); see also Griffin v.

Michigan Department of Corrections, 5 F.3d 186, 189 (6th

Cir. 1993). That is the nature of the relief—statistical,

probabilistic—sought by the plaintiffs in this case.

We gave our most exotic example of probabilistic

injury in Milam v. Dominick’s Finer Foods, Inc., 588 F.3d 955,

958 (7th Cir. 2009): “Suppose you’re playing roulette on

a 37-number wheel (18 red, 18 black, and 1 green) at the

Casino de Monte-Carlo, and after you have placed

your $1,000 bet on red, which will pay you $2,000 if the

ball lands on red, the casino collapses through the negligence of a building contractor, destroying not only the

roulette wheel but also your chips, and you cannot get
18 Nos. 10-3062, 10-3068

the money you paid for them back because all the

casino’s records were destroyed when it collapsed. You’ve

suffered a loss equal to a 48.6 percent chance of winning

$2,000. So $972.73 would be your damages.” That is

the type of probabilistic loss that the plaintiffs claim to

have suffered in this case.

If a trier of fact finds causation according to the

standard just explained, which requires merely a probability of a harm attributable to the defendant’s wrongful act, the only remaining issue is the amount of

damages to be awarded to the plaintiff. On that phase

of the case the plaintiff has a more relaxed burden of

proof than on the issue of causation, especially if as in

this case the defendants’ conduct has made it difficult

for the plaintiff to prove the precise extent of his damages.

J. Truitt Payne Co. v. Chrysler Motors Corp., 451 U.S. 557,

566-67 (1981); Bigelow v. RKO Radio Pictures, Inc., 327

U.S. 251, 264-65 (1946); Story Parchment Co. v. Paterson

Parchment Paper Co., 282 U.S. 555, 562-66 (1931); Haslund

v. Simon Property Group, Inc., 378 F.3d 653, 657-59 (7th

Cir. 2004); BE&K Construction Co. v. Will & Grundy

Counties Building Trades Council, 156 F.3d 756, 769-70 (7th

Cir. 1998); Computer Systems Engineering, Inc. v. Qantel

Corp., 740 F.2d 59, 67 (1st Cir. 1984). “Once the plaintiff

proves injury, broad latitude is allowed in quantifying

damages, especially when the defendant’s own conduct

impedes quantification. But the injury itself must be

proved in the usual way, without speculation or burden

shifting.” Haslund v. Simon Property Group, Inc., supra,

378 F.3d at 658. (The distinction between proof of cause

and proof of damages is also well explained in Justice
Nos. 10-3062, 10-3068 19

Thomas’s separate opinion in Anza v. Ideal Steel Supply

Co., 547 U.S. 451, 465-67 (2001).) Even “speculation has

its place in estimating damages, and doubts should be

resolved against the wrongdoer.” Mid-America Tablewares,

Inc. v. Mogi Trading Co., 100 F.3d 1353, 1365 (7th Cir.

1996), quoting Olympia Equipment Leasing Co. v. Western

Union Telegraph Co., 797 F.2d 370, 383 (7th Cir. 1986).

Otherwise “the more grievous the wrong done, the less

likelihood there would be of a recovery.” Bigelow v. RKO

Radio Pictures, Inc., supra, 327 U.S. at 265.

In this case, for example, the plaintiffs do not have

good records of which tax liens they bid for unsuccessfully. The only reason they would have needed such

records was to prove damages in a lawsuit. Since they

didn’t know they were victims of fraud, they had no

reason to think they needed good records of their unsuccessful bids—for of what use would such records have

been had there been no fraud? The judge missed this

point because he confused proof of causation with proof

of amount of damages and so denied the plaintiffs

the benefit of the easier burden of proving damages than

of causation.

The defendants must know they’re skating on thin ice.

For (to mix our metaphors) they have not put all their

eggs in the basket labeled “proximate cause” but instead

have also argued that the plaintiffs cannot prove

damages and we can therefore affirm on that alternative ground. Given the lightened burden of proof in the

damages phase of a tort case, the argument fails. It’s true

as we just noted that the plaintiffs’ records of their unsuccessful bids are poor. The defendants ask us to infer
20 Nos. 10-3062, 10-3068

that maybe the plaintiffs didn’t bid on any of the tax liens

that the defendants bid on. (Another possibility, but the

defendants don’t argue it, is that with fewer arms in

the air, more buyers would be attracted to the auction

because their chances of being awarded a tax lien by the

auctioneer would have been greater, and perhaps in the

end the total number of arms in the air at each auction

would have been the same even if there had been no

violation of the related-entities rule.) Yet it’s undisputed

that the two plaintiffs submitted many thousands of zeropercent bids—they presented evidence that they bid on

between 72 and 92 percent of the tax liens that were won

by the defendants during the complaint period—and

ended up with only 7 percent of the 96,000 zero-percent awards during the six years in which the alleged

conspiracy was in force, while the defendants, who

often had more than four times as many arms in the air

as they should have had (13 versus three), won a total of

41 percent of the zero-percent liens. It seems highly

likely that at least part of this dramatic difference in

success was attributable simply to more hands in the

air. To the extent that awards of zero-percent bids are

distributed randomly among the bidders—and many

undoubtedly are—the three defendant groups would be

expected to win 50 percent more awards than the two

plaintiffs if everyone was playing by the rules, and this

would be 10.5 percent of the awards (7 percent plus

3.5 percent)—not 41 percent.

The defendants argued and the district judge appears

to have been persuaded that unless the liens had been

awarded on a strictly rotational basis when identical

bids were submitted, there could be no confidence that
Nos. 10-3062, 10-3068 21

each of the plaintiffs would have obtained a proportionately equal share of the zero-percent liens had the defendants not packed the auction room. This reasoning

reflects a misunderstanding of statistical theory. In a

large sample, random selection produces with a high

degree of confidence (certainly a high enough degree for

a damages award in a fraud case) the same proportions

as strict rotation would. Suppose an urn contains 1,000

white balls and 1,000 black ones. The urn’s owner

wants each of two visitors to have 500 of each type of

ball. He patiently removes the balls one by one, being

careful to give exactly the same number of white and

black balls to each visitor. That is strict rotation. But by

the time he is halfway through, and each visitor has 250

white balls and 250 black balls, he becomes bored and

impatient. So he blindfolds the visitors and tells each

to draw the same number of balls from the urn, of course

without being able to determine which are white and

which black. Hence the remaining 500 white and black

balls are distributed randomly between the two visitors,

rather than in strict rotation as the first 500 balls were. Yet

on average each visitor will end up with the same number

of white and black balls, just as when there was strict

rotation between white and black. That’s just on

average; in any actual drawing there is likely to be some

deviation from equality. Such a deviation would matter

in this case if the victim of a fraud had to prove his

loss with mathematical exactitude. He does not.

The statistical evidence in this case would be enough,

when combined with evidence also presented by the

plaintiffs of the average profit they made on the zeropercent liens that they won, to carry their burden of
22 Nos. 10-3062, 10-3068

proving an amount of damages with sufficient (which

is not to say with great) precision to justify an award

of that amount. The evidence was summarized in two

expert-witness reports that the defendants take a

number of potshots at. The criticisms may be substantial, but they are premature because the district

judge never ruled on the admissibility of the expert

evidence previewed in the reports. On the record as

it stands the plaintiffs made a prima facie case of

damages in the amount ($5 million before trebling) that

they seek, and so the defendants cannot prevail on

their alternative, zero-damages defense of the district

court’s decision without a trial.

So much for the RICO claim. The plaintiffs have a

supplemental claim as well, which the district judge

also dismissed on summary judgment. The claim is for

intentional interference with a business opportunity, in

violation of Illinois common law. The judge rejected it

on the ground that the plaintiffs “cannot prove that they

had an actual expectancy of winning a specific lien.”

2010 WL 3526469, at *14. (In rejecting “proximate causation” in regard to the RICO claim, the judge, mistaking

the significance of statistical evidence, also fastened on

the inability, as he thought, of the plaintiffs to identify

“specific liens” that they had failed to win.) It is true

that the plaintiff must prove an interference with “a

business expectancy with a specific third party.” Schuler v.

Abbott Laboratories, 639 N.E.2d 144, 147 (Ill. App. 1993); see

also O’Brien v. State Street Bank & Trust Co., 401 N.E.2d

1356, 1358 (Ill. App. 1980); Crinkley v. Dow Jones & Co., 385

N.E.2d 714, 720-22 (Ill. App. 1978); Parkway Bank & Trust
Nos. 10-3062, 10-3068 23

Co. v. City of Darien, 357 N.E.2d 211, 214-15 (Ill. App. 1976).

But that requirement is satisfied. The plaintiffs’ business expectancy was the expectancy of receiving liens

from their owner, the County, at auctions uncontaminated by fraud by competing bidders. The County

was the third party to the competition for tax liens

between the plaintiffs (and the other one-armed bidders)

and the defendants.

The judgment is reversed and the case remanded

for further proceedings consistent with this opinion. As

this is the second reversal of the district judge in the

same case, we think it best to spread the pain and invoke

our Rule 36, so that the trial will be before a different

judge.

REVERSED AND REMANDED.

3-24-11