In the 

United States Court of Appeals 

For the Seventh Circuit ____________________

No. 13‐2972

EMPRESS CASINO JOLIET CORP., et al.,

Plaintiffs‐Appellants,

v.

JOHN JOHNSTON,

BALMORAL RACING CLUB, INC., and

MAYWOOD PARK TROTTING ASS’N, INC.,

Defendants‐Appellees.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

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

____________________

ARGUED MARCH 31, 2014 — DECIDED AUGUST 15, 2014

____________________

Before WOOD, Chief Judge, and WILLIAMS and HAMILTON,

Circuit Judges.

WOOD, Chief Judge. Deals are the stuff of legislating. Al‐

though logrolling may appear unseemly some of the time, it

is not, by itself, illegal. Bribes are. This case requires us once

again to decide whether some shenanigans in the Illinois
2 No. 13‐2972

General Assembly and governor’s office crossed the line

from the merely unseemly to the unlawful. It involves a sub‐

ject we have visited in the past: two industries that compete

for gambling dollars. See Empress Casino Joliet Corp. v. Bal‐

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

In 2006 and 2008, former Governor Rod Blagojevich signed

into law two bills (to which we refer as the ’06 and ’08 Acts)

that imposed a tax on certain in‐state casinos of 3% of their

revenue and placed the funds into a trust for the benefit of

the horseracing industry. Smelling a rat, the plaintiff casinos

brought suit under the federal Racketeering Influenced and

Corrupt Organizations Act (RICO), 18 U.S.C. § 1964, alleging

that the defendants, all members of the horseracing industry,

had bribed the governor to ensure that the bills were enact‐

ed. Viewing the evidence in the light most favorable to the

plaintiffs (and of course not vouching for anything), we con‐

clude that there was enough to survive summary judgment

on the claim that the governor agreed to sign the ’08 Act in

exchange for a bribe. We therefore reverse in part and re‐

mand for further proceedings on that part of the case.

I

Illinois legalized riverboat casino gambling in 1990. Ever

since, the state’s once‐thriving horseracing industry has been

in decline. In late 2005 and early 2006, the state General As‐

sembly considered legislation to help the horseracers. One

bill would have imposed a 3% tax on casinos earning more

than $50 million annually and deposited the proceeds into a

fund for the benefit of the horseracing industry. It was mod‐

eled on similar initiatives in three other states. Lobbying on

all sides was intense. On the first few votes in the General

Assembly, the bill failed to garner a majority.
No. 13‐2972 3

The bill’s fortunes changed later in the spring of 2006. For

one thing, it was modified so that the tax applied only to ca‐

sinos earning more than $200 million annually, thereby limit‐

ing its effect to the large casinos in northern Illinois near

Chicago. For another, Governor Blagojevich began to take an

interest in the matter after his senior aide and alleged pay‐to‐

play facilitator, Christopher Kelly, met with a horseracing

executive, John Johnston. On the floor of the General As‐

sembly, the bill’s opponents cried foul. “Why are some of

you called down to the Governor’s office, then you come

back up and change your vote?” asked Representative Wil‐

liam Black. Added Representative Brent Hassert, “The Gov‐

ernor has weighed in on [the ’06 bill] ... heavily in the last

night or so, calling people and asking people to vote on this.

It is my understanding ... that there’s promises have been

made to support this bill.” Soon after, the ’06 Act cleared the

House by a vote of 70‐32; a week later, the Senate passed it

40‐16. Governor Blagojevich signed the bill into law the next

day. Johnston and other racing executives thanked the gov‐

ernor for his support of the bill in a personal letter. Using

various subsidiaries, they then contributed $125,000 to his

campaign fund.

The ’06 Act contained a two‐year sunset provision. In ear‐

ly 2008, the General Assembly began to consider its renewal.

Meanwhile, horseracing executive Johnston met with Gov‐

ernor Blagojevich and his chief of staff Alonzo Monk. Blago‐

jevich gave no indication whether he would support the re‐

newed bill, telling Johnston, “Appreciate your support in the

past, hope you can continue to support me in the future.” In

the fall, with the bill stalled in the General Assembly, Blago‐

jevich called Johnston to solicit campaign donations. John‐

ston pledged to give $100,000, but he did not send the mon‐
4 No. 13‐2972

ey. Over the next few months, Monk repeatedly needled

Johnston about following through on the pledge. In one con‐

versation recorded by federal authorities, Johnston told

Monk: “Look, tell the big guy [Blagojevich] I’m good for it.

... I’m just figuring out which accounts to pull the checks

from.”

In November, the General Assembly voted to renew the

Racing Act by a vote of 83‐28; the Senate likewise did so by a

vote of 37‐13. Representative Robert Molaro, a sponsor of the

original Racing Act legislation, testified later that Governor

Blagojevich played no role in the passage of the ’08 Act. But

in contrast to his immediate signing of the ’06 Act, the gov‐

ernor initially did nothing with the ’08 Act. Johnston com‐

plained to Monk in a recorded conversation that the gover‐

nor’s delay in signing the bill was costing him $9,000 per

day. “This is getting goofier,” Johnston told a colleague in an

email, “We are going to have to put a stronger bit in his

mouth!?!” In another recorded conversation, Monk told the

governor that Johnston was breathing down his neck about

the bill. The governor replied that the bill would be signed,

but it was a “timing issue.” Possibly alluding to Johnston’s

$100,000 commitment, the governor explained that he would

“like some separation between that and signing the bill.”

By December, Johnston still had not ponied up the

$100,000 and Governor Blagojevich still had not signed the

’08 Act into law. In recorded conversations, the governor and

Monk strategized about “how [Monk] [could] approach John

Johnston to get the donation of one hundred thousand dol‐

lars.” Monk made clear that Johnston was desperate to have

the Racing Act renewal signed into law. He told the gover‐

nor: “Look, I want to go to [Johnston] without crossing the
No. 13‐2972 5

line and say, give us the fuckin’ money ... give us the money

and one has nothing to do with the other. ... But give us the

fuckin’ money, because they’re losing 9,000 a day ... for eve‐

ry day it’s not signed.” Monk then met with Johnston to de‐

liver a message, as he later recalled it, that “once [Johnston]

made the contribution, the act would be signed.” Johnston

asked Monk: “Do you want me to make some of the pay‐

ment now and some of the payment after the beginning of

the year?” Asked whether Johnston ever directly promised

to deliver the money, Monk later testified: “I think he did to

me.” After the meeting, Monk called the governor to report

that Johnston would soon pay up.

A few days later, federal authorities arrested Blagojevich.

Despite the arrest, Blagojevich later signed the ’08 Act into

law. The charging documents against Blagojevich alleged

that the governor had linked signage of the ’08 Act to a

commitment to donate $100,000 in discussions with an un‐

named representative of the horseracing industry. Regarding

that charge, Johnston admitted, “I didn’t know if anybody

else had given $100,000, but I knew I did.” (Despite this

statement, Johnston never actually delivered the money.)

Johnston signed an immunity agreement which represented

that he “may have information relevant to the [Blagojevich]

investigation” and acknowledged “that such information

may tend to incriminate [himself].” Later, an investigative

report by the General Assembly found that Blagojevich trad‐

ed state action for campaign contributions, including from

“Race Horse Executive 1,” later revealed to be Johnston, in

exchange for enactment of the ’08 Act.

The appellants here are Empress Casino Joliet Corpora‐

tion, Des Plaines Development Limited Partnership, Holly‐
6 No. 13‐2972

wood Casino‐Aurora, Inc., and Elgin Riverboat Resort‐

Riverboat Casino (the Casinos). They are all Illinois casinos

taxed under the ’06 and ‘08 Acts. Their first move was to

challenge the validity of the Acts in state court. The Illinois

Supreme Court rejected their challenge to the ’06 Act under

the state and federal constitutions. Empress Casino Joliet Corp.

v. Giannoulias, 896 N.E.2d 277 (Ill. 2008), cert. denied 556 U.S.

1281 (2009) (Empress I). Illinois courts later rejected a similar

challenge to the ’08 Act. Empress Casino Joliet Corp. v. Gian‐

noulias, 942 N.E.2d 783 (Ill. App. Ct. 2011), app. denied 949

N.E.2d 1097 (Ill. 2011) (Empress II). The appellees here—

horseracing tracks and executives that benefitted from the

’06 and ‘08 Acts (the Racetracks)—intervened and participat‐

ed in both state actions.

The Casinos then filed a federal RICO suit against the

Racetracks and former Governor Blagojevich seeking dam‐

ages and a constructive trust over the tax money received by

the Racetracks under the ’06 and ‘08 Acts. A panel of this

court held that legislative immunity barred the suit against

Blagojevich but that the Tax Injunction Act permitted the

constructive trust. Empress Casino Joliet Corp. v. Blagojevich,

638 F.3d 519 (7th Cir. 2011) (Empress III). Sitting en banc, we

rejected the position that the panel had taken with regard to

the Tax Injunction Act. Empress Casino Joliet Corp. v. Balmoral

Racing Club, 651 F.3d at 726 (Empress IV). On remand, the dis‐

trict court granted summary judgment for the Racetracks on

the Casinos’ claims of a conspiracy to exchange campaign

contributions for state action in violation of RICO, 18 U.S.C.

§ 1962(d). The district court found that the Casinos had of‐

fered evidence from which a reasonable jury could find that

there was a pattern of racketeering activity. It also found that

a jury could find that an enterprise‐in‐fact, consisting of
No. 13‐2972 7

Governor Blagojevich, his associates, and various other par‐

ticipants, existed. The court concluded that there was suffi‐

cient evidence to support a jury finding that the defendants

bribed Blagojevich to secure his signature on the ‘08 Act, but

assumed, without deciding, the sufficiency of the evidence

relating to the ‘06 Act. The court went on to determine that

the Casinos could not show that the alleged bribes proxi‐

mately caused their injury. The only element on which the

Casinos lost was therefore proximate cause. The Casinos ap‐

pealed to this court.

II

We begin with the Racetracks’ argument that the results

of the two prior state actions foreclose the Casinos’ claims

under the claim preclusion branch of res judicata. We apply

the same preclusive effect to a state court judgment as the

state court itself would apply. 28 U.S.C. § 1738; see Marrese v.

Amer. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 380 (1985).  

Under Illinois law, “[f]or the doctrine of res judicata to

apply, the following three requirements must be satisfied: (1)

there was a final judgment on the merits rendered by a court

of competent jurisdiction; (2) there is an identity of cause of

action; and (3) there is an identity of parties or their privies.”

River Park, Inc. v. City of Highland Park, 703 N.E.2d 883, 889

(Ill. 1998).  

Res judicata does not bar the Casinos’ claims here because

the second element is not met: this action does not present

the same claim under the transactional test Illinois adopted

in River Park, id. at 893. In the first state action, the Casinos

asked the court “to determine the constitutionality of [the ’06

Act],” and the Illinois Supreme Court held that “[the ’06 Act]
8 No. 13‐2972

withst[ood] the constitutional challenges raised” under the

state and federal constitutions. Empress I, 896 N.E.2d at 282.

In the second state action, the Casinos “challeng[ed] the con‐

stitutionality of [the ’08 Act],” and the Illinois courts upheld

the new law. Empress II, 942 N.E.2d at 786, 789. Indeed, this is

not the first time we have been asked to consider the res judi‐

cata effects of the earlier litigation. We concluded before that

“the claims ... in the two [state] suits are materially differ‐

ent” than those involved here, see Empress III, 638 F.3d at

537, and we adhere to that assessment. (This conclusion

makes it unnecessary for us to decide whether the cases in‐

volve the same parties.) The two state actions were facial

challenges to the validity of the Racing Acts. Neither state

action considered the question at issue here: whether the

Racetracks are liable to the Casinos for bribing the governor

to sign the ’06 and ‘08 Acts.

III

The circumstances surrounding the enactment of the two

Acts differ significantly, and so we analyze them separately.

We conclude that the Casinos failed to present sufficient evi‐

dence with respect to their allegations about the ’06 Act. The

’08 Act is another matter. For it, the Casinos presented suffi‐

cient evidence on proximate cause to withstand summary

judgment. As we noted earlier, we naturally are not vouch‐

ing for any of the facts on which we rely here; instead, as re‐

quired, we are reviewing the district court’s grant of sum‐

mary judgment de novo and viewing all facts and reasonable

inferences in the light most favorable to the nonmoving par‐

ty. Shaffer v. Amer. Med. Ass’n, 662 F.3d 439, 442 (7th Cir.

2011).
No. 13‐2972 9

The ’06 Act.—We begin with the allegation that the Race‐

tracks bribed Governor Blagojevich to push the ‘06 Act

through the state legislature. Even if a RICO suit could be

based on such an allegation (a questionable proposition), the

Casinos have not presented sufficient evidence to permit a

trier of fact to find that Governor Blagojevich caused the leg‐

islature to pass the ’06 Act.

RICO’s private civil remedy provision states:

Any person injured in his business or property

by reason of a violation of section 1962 of this

chapter may sue therefor ... and shall recover

threefold the damages he sustains and the cost

of the suit, including a reasonable attorney’s

fee ... .

18 U.S.C. § 1964(c). Prohibited activities under RICO include

the “conduct of [an] enterprise’s affairs through a pattern of

racketeering activity,” 18 U.S.C. § 1962(c), as well as a con‐

spiracy to do the same, id. § 1962(d). To state a claim under

this provision, the plaintiff must allege that “an injury to

[his] business or property result[ed] from the underlying

acts of racketeering.” Haroco, Inc. v. Amer. Nat’l B&T Co. of

Chi., 747 F.2d 384, 398 (7th Cir. 1984). Under RICO, the plain‐

tiff “can only recover to the extent that [] he has been injured

in his business or property by the conduct constituting the

violation.” Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496

(1985). Bribery of government officials is one offense that can

serve as a predicate for a RICO violation. 18 U.S.C. § 1961(1);

see also Salinas v. United States, 522 U.S. 52, 62–66 (1997).

RICO borrows the doctrine of proximate cause from anti‐

trust law. Holmes v. Sec. Inv. Prot. Corp., 503 U.S. 258, 267–68
10 No. 13‐2972

(1992). In both the antitrust and RICO contexts, “the focus is

on the directness of the relationship between the [defend‐

ant’s alleged] conduct and the harm.” Hemi Grp., LLC v. City

of New York, N.Y., 559 U.S. 1, 12 (2010); see also Anza v. Ideal

Steel Supply Corp., 547 U.S. 451, 461 (2006) (“[T]he central

question [to] ask is whether the alleged violation led directly

to the plaintiff’s injuries.”); Holmes, 503 U.S. at 268 (RICO re‐

quires “some direct relation between the injury asserted and

the injurious conduct alleged”). As the Supreme Court has

explained:

‘[P]roximate cause’ [serves] to label generically

the judicial tools used to limit a person’s re‐

sponsibility for the consequences of that per‐

son’s own acts, with a particular emphasis on

the demand for some direct relation between

the injury asserted and the injurious conduct

alleged. The direct‐relation requirement avoids

the difficulties associated with attempting to

ascertain the amount of a plaintiff’s damages

attributable to the violation, as distinct from

other, independent factors ... .

Bridge v. Phx. Bond & Indem. Co., 553 U.S. 639, 654 (2008).

The Casinos have not pointed to evidence that would al‐

low a factfinder to conclude that the Racetracks’ alleged

bribery scheme caused the legislature to pass the ’06 Act. To

begin with, the Casinos make no allegation and have no evi‐

dence that the Racetracks ever bribed or attempted to bribe

state legislators. Nor do the Casinos point to evidence that

the governor agreed to exert improper influence over state

legislators in order to win their support of the ’06 Act in ex‐

change for a bribe. See McCutcheon v. Fed. Election Comm’n,
No. 13‐2972 11

134 S. Ct. 1434, 1450 (2014) (“[W]hile preventing corruption

or its appearance is a legitimate objective, Congress may tar‐

get only a specific type of corruption—’quid pro quo’ corrup‐

tion.”). In fact, every legislator who was deposed testified

that the governor had not attempted to induce his vote on

the ’06 Act.

A careful look at the record also reveals that the Casinos’

suggestion that the governor threatened to withhold funding

to various legislators’ districts is unsubstantiated, but to the

extent this was more simple logrolling, it falls short of evi‐

dence that could support a RICO claim. The Casinos refer us

to several exhibits that purportedly show that “Blagojevich

or his staff link[ed] changed votes on the [‘06] Act to capital

expenditures like highway spending in the representatives’

districts.” But this is an exaggeration of the record. Repre‐

sentative Phelps, for example, when asked whether it was

possible that Governor Blagojevich had called him to discuss

the 3% fee, claimed not to remember. At the same time,

when asked if it was possible that the topic came up and he

just did not recall, he answered “no” and said that he would

have remembered something like that. Representative

D’Amico flatly denied that the governor raised the issue of

the 3% fee in a phone call about a different bill. Representa‐

tive Giles’s testimony was the same. Other exhibits refer‐

enced by the Casinos contain nothing but inadmissible hear‐

say on the point. See Ex. 85 (declaration of Maddox); Ex. 86

(email from Maddox) (“Brandon Phelps said ...”); Ex. 87

(email from Satz based on reports he heard); Ex. 88 (emails

from James Morphew) (“Hassert told me this morning ... “).

Finally, an admissible email from one of the defendants says

nothing about the governor’s linkage of the ’06 Act to high‐

way spending or any other improper exertion of influence.
12 No. 13‐2972

See Ex. 89 (email from Tim Carey, president of Hawthorne

Race Course) (“[T]he fact that the Gov was working the

phones for us was a great sign that this could make it to his

desk.”).

The fact that the bill failed to garner a majority on the

first few votes does not suffice to raise a genuine issue of

material fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

250–52 (1986). Numerous reasons, including the change to

the bill restricting its application to the highest‐earning casi‐

nos or just the usual give‐and‐take of legislative lawmaking,

might explain the change in outcome.  

The Casinos also point to statements on the floor of the

General Assembly and in various media reports, but these

statements are not admissible to prove the matters asserted

therein. See FED. R. EVID. 801(c), 802. Even if they were ad‐

missible, they show very little; the fact that the governor met

with unnamed legislators during the months‐long period

when the bill was under consideration does not show any‐

thing untoward. We do not know which legislators met with

the governor, nor what was discussed. The worst comment

the Casinos identify is Rep. Hassert’s obviously inadmissible

statement that it was his “understanding ... [that] promises

[were] made to support this bill.” Not only is that comment

an out‐of‐court statement offered to prove the truth of the

matter asserted; the underlying sentiment is not based on

personal knowledge. See FED. R. EVID. 805. Worse, we have

no idea what promises he was talking about. If the promise

referred to support for re‐election, or a commitment to co‐

sponsor a bill, without any taint of bribery, nothing would be

wrong.
No. 13‐2972 13

We accept for present purposes that, in an appropriate

case, a “finding that bribery of a [government official] prox‐

imately caused a plaintiff’s injury can [] rest on evidence of

that individual’s influence over the proceedings.” Bieter Co.

v. Blomquist, 987 F.2d 1319, 1327 (8th Cir. 1993). But that prin‐

ciple does not apply to the ’06 Act. The record contains no

admissible evidence that Governor Blagojevich unduly pres‐

sured members of the legislature to support the ’06 Act. Nor

is there competent evidence that would permit an inference

that any identifiable group of legislators “voted as a bloc” at

the governor’s behest. No legislator was bribed. It takes

more than the Casinos have shown here to support their

proposed conclusion that the workings of an entire state leg‐

islature were coopted by the bribery of one official.  

The work of state legislatures lies at the heart of the “Re‐

publican Form of Government” that the Constitution man‐

dates. U.S. CONST. art. IV, § 4; see also THE FEDERALIST No. 51

(James Madison) (“In republican government, the legislative

authority necessarily predominates.”). The evidence would

have to be extraordinary to conclude that one corrupt offi‐

cial, whether the governor or anyone else, had hijacked this

foundational institution of state sovereignty. And even if the

evidence were strong, the cure may not lie in civil litigation

in the courts. See Fletcher v. Peck, 10 U.S. 87, 131 (1810) (“[A]

court, sitting as a court of law, cannot sustain a suit brought

by one individual against another founded on the allegation

that the act is a nullity, in consequence of the impure motives

which influenced certain members of the legislature which

passed the law.”). We do not need to explore the outer

boundaries of the Fletcher holding here, because this record

is devoid of admissible evidence that the governor exerted

undue influence on legislators as they considered the ’06
14 No. 13‐2972

Act. The Casinos’ case must fail insofar as it rests on that epi‐

sode.

Evidence is similarly lacking to support a finding that the

Racetracks bribed Governor Blagojevich to sign the ’06 Act

into law. The Casinos point to a meeting between Johnston

and Blagojevich’s aide Chris Kelly in 2006 while the Act was

stalled in the legislature. But they provide no evidence that

Johnston offered Kelly a bribe in exchange for Governor

Blagojevich’s signature during that meeting. The letter from

the Racetracks to Blagojevich after the ’06 Act passed merely

thanked him for his support; it did not suggest that Blago‐

jevich had agreed to sign the bill in exchange for a bribe. The

fact that the Racetracks later made campaign contributions

cannot, without more, support liability for acts of political

corruption. To hold illegal an official’s support of legislation

furthering the interests of some constituents shortly before

or after campaign contributions are solicited and received

“would open to prosecution not only conduct that has long

been thought to be well within the law but also conduct that

in a very real sense is unavoidable so long as election cam‐

paigns are financed by private contributions or expendi‐

tures, as they have been from the beginning of the Nation.”

See McCormick v. United States, 500 U.S. 257, 272 (1991).

Because the evidence the Casinos presented in opposition

to summary judgment with respect to the ’06 Act would not

permit a trier of fact to rule in their favor, the district court

properly granted summary judgment for the Racetracks on

these claims.

The ’08 Act.—The circumstances surrounding the ’08 Act

are another matter. As with the ’06 Act, the record contains

little evidence to show that the Governor’s influence caused
No. 13‐2972 15

the legislature to pass the ’08 Act. But that is not all that the

Casinos alleged. They also asserted that the Racetracks and

the governor agreed to a quid pro quo: in exchange for the

governor’s signature on the ’08 Act, the Racetracks promised

to give $100,000 to his campaign fund.

The summary judgment record contains considerable ev‐

idence that, if credited, would support the allegation of a

quid pro quo between the Racetracks and Governor Blago‐

jevich. When Blagojevich did not immediately sign the ’08

Act into law, Racetracks executive Johnston stated to a col‐

league in an email: “We are going to have to put a stronger

bit in his mouth!?!” Johnston complained to Blagojevich’s

chief of staff Monk that the delays in signing the bill were

costing Johnston $9,000 per day. A factfinder could conclude

that Blagojevich was talking about Johnston’s commitment to

pay $100,000 when he informed Monk that he would “like

some separation between that and signing the bill.” After the

FBI recorded Monk and Blagojevich scheming about getting

Johnston to pay, Monk met with Johnston and, according to

Monk, delivered the message that the bill would not be

signed until he paid. According to Monk, Johnston coun‐

tered with an offer to pay half the money at once and half

later. Monk called Blagojevich immediately after the meeting

with Johnston to report his belief that Johnston would soon

pay. After learning of the criminal allegation that Blagojevich

threatened not to sign the ’08 Act bill unless he was paid

$100,000 by someone in the horseracing industry, Johnston

admitted, “I didn’t know if anybody else had given 100,000,

but I knew I did.” Finally, Johnston signed an immunity

agreement in which he acknowledged that he had infor‐

mation that “may tend to incriminate” him. From this and

other evidence in the record, a reasonable juror could con‐
16 No. 13‐2972

clude that the Racetracks agreed to pay $100,000 to Blago‐

jevich’s campaign fund in return for his signature on the ’08

Act.

Blagojevich’s signature on the bill caused the ’08 Act to

become law. Under Illinois law, bills passed by the General

Assembly must be presented to the governor within 30 days.

ILL. CONST., art. IV, § 9(a). “If the Governor approves the bill,

he shall sign it and it shall become law.” Id. “If the Governor

does not approve the bill, he shall veto it by returning it with

his objections to the house in which it originated.” Id. § 9(b).

If the factfinder believes the evidence supporting the Casi‐

nos’ allegations, it could conclude that the bill was presented

to the governor and he signed it in exchange for a lucrative

campaign contribution. Unlike the allegation that the Race‐

tracks bribed the governor to persuade the 150‐member leg‐

islature to enact the bill, the ’08 Act became law as a direct

result of the alleged agreement to trade money for one per‐

son’s action—the governor’s signature. A jury could find that

the causal chain between the Racetracks’ bribe and the gov‐

ernor’s signing of the bill was not broken by any intervening

acts of third parties. Cf. Hemi Group, 559 U.S. at 11 (“[T]he

City’s harm was directly caused by the customers, not

Hemi.”); id. at 25 (Breyer, J., dissenting) (taking issue with

the majority’s suggestion that “the intervening voluntary

acts of third parties ... cut[] the causal chain”). Only the gov‐

ernor had authority to sign the bill into law, and he did so.

It does not matter that the ’08 Act passed the legislature

by veto‐proof majorities. See ILL. CONST., art. IV, § 9(c). It

cannot be assumed that a veto‐proof majority will hold in

the face of an executive veto. See, e.g., McGrath, Rogowski, &

Ryan, Gubernatorial Veto Powers and the Size of Legislative Coa‐
No. 13‐2972 17

litions (Dec. 11, 2013) (S. Pol. Sci. Ass’n),

https://pages.wustl.edu/files/pages/imce/rogowski/mrr‐

coalitions‐nov13.pdf (demonstrating how the threat of a veto

affects legislative coalitions and influences policymaking);

Steven Dennis & Emma Dumain, ROLL CALL, “The 39 House

Democrats Who Defied Obama’s Veto Threat,” (Nov. 15,

2013), http://blogs.rollcall.com/218/the‐39‐house‐democrats‐

who‐defied‐obamas‐veto‐threat/ (last visited August 15,

2014). Many legislators, especially those in the governor’s

party, may hesitate to override a veto even if they originally

voted for the bill. That the ‘08 Act cleared the General As‐

sembly by a veto‐proof majority does not erase the signifi‐

cance of the governor’s signature. If it did, it would be un‐

necessary to obtain the governor’s signature on a bill that

passed by veto‐proof majorities.

Nor does it matter that the bill would have become law

even if Governor Blagojevich had neither signed nor vetoed

it. See ILL. CONST., art. IV, § 9(b) (“Any bill not so returned by

the Governor within 60 calendar days after it is presented to

him shall become law.”). RICO claims sound in tort. See Beck

v. Prupis, 529 U.S. 494, 501–06 (2000) (discussing historical

relationship between tort and RICO claims and explaining

that “Congress meant to incorporate common‐law principles

when it adopted RICO”); Anza, 547 U.S. at 466–67 (Thomas,

J., concurring in part and dissenting in part) (applying cau‐

sation and damages principles from RESTATEMENT (SECOND)

OF TORTS (1977) to analysis of RICO claims). The alleged

bribery here was an intentional tort. Like an arsonist who

burns down a cabin the day before a natural forest fire, the

Racetracks may be “jointly and severally liable for any indi‐

visible injury legally caused by [their] tortious conduct,” re‐
18 No. 13‐2972

gardless of innocent alternative causes. See RESTATEMENT

(THIRD) OF TORTS: APPORTIONMENT LIABILITY § 12 (2000).

That brings us to the heart of the matter: Was the Race‐

tracks’ alleged agreement to bribe the governor to sign the

’08 Act sufficiently immediate to serve as a legal cause of the

Casinos’ injuries for purposes of RICO? The focus of the in‐

quiry is the directness of the injury resulting from the de‐

fendants’ conduct. The Supreme Court has spoken to RICO’s

proximate‐cause requirement on several occasions, and so

we begin with a look at its guidance.

In Anza, the plaintiff alleged that the defendant, its busi‐

ness competitor, defrauded the State of New York by failing

to charge certain sales taxes. 547 U.S. at 454–55. As a result,

the defendant was able to offer lower prices than the plain‐

tiff; those prices had the foreseeable effect of hurting the

plaintiff’s business. The Court held, however, that the “direct

victim of [the defendant’s] conduct [was] the State of New

York,” not the plaintiff. Id. at 458. The cause of plaintiff’s

harm was “a set of actions (offering lower prices) entirely

distinct from the alleged RICO violation (defrauding the

State).” Id. The plaintiff’s theory in Anza failed because it re‐

quired a multi‐step analysis: from the defendants’ under‐

payment of taxes, to their reduced prices, to the plaintiff’s

loss of sales. The defendants’ misconduct—underpayment of

taxes—did not by itself harm the plaintiffs. That fact, in light

of “the general tendency of the law, in regard to damages ...,

not to go beyond the first step,” Hemi Grp., 559 U.S. at 10,

quoting S. Pac. Co. v. Darnell‐Taenzer Lumber Co., 245 U.S. 531,

533 (1918) (Holmes, J.), doomed the plaintiff’s case. The case

before us, by contrast, exemplifies direct effect. The object of

the conspiracy was to bring the ’08 Act into effect in ex‐
No. 13‐2972 19

change for a cash bribe; the Act harmed the Casinos to the

tune of 3% of their revenue. The Casinos thus sat in the cen‐

ter of the target of the conspiracy.

Hemi Group offers another example of an effect that is too

indirect. There, the plaintiff City alleged that the defendant

fraudulently avoided filing certain tax reports with the State

regarding cigarette sales. 559 U.S. at 4. The City used the re‐

ports to assess back sales taxes against cigarette buyers, and

so the defendant’s fraud against the State ultimately allowed

some buyers to avoid paying taxes they owed the City.

“[T]he conduct directly responsible for the City’s harm was

the customer’s failure to pay their taxes,” not the defendant’s

failure to file reports. Id. at 11. Thus, as in Anza, “the conduct

directly causing the harm was distinct from the conduct giv‐

ing rise to the fraud.” Id. Both Anza and Hemi Group stand

for the same general proposition: only persons injured di‐

rectly by the defendant’s misconduct may recover under

RICO.

Until the Supreme Court’s decision in Lexmark Interna‐

tional, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377

(2014), parties usually discussed this kind of limitation un‐

der the rubric of statutory standing. In Lexmark, however, the

Supreme Court disapproved of the idea of “prudential”

standing. Properly understood, the Court said, whether a

plaintiff may sue “is an issue that requires us to determine,

using traditional tools of statutory interpretation, whether a

legislatively conferred cause of action encompasses a partic‐

ular plaintiff’s claim.” 134 S. Ct. at 1387. The Court had al‐

ready held in Holmes that Congress did not mean “to allow

all factually injured plaintiffs to recover” under RICO. 503

U.S. at 266. But in Bridge, the Court was equally clear that
20 No. 13‐2972

extra‐statutory restrictions on the right to sue have no place.

553 U.S. at 648. It therefore rejected a rule of first‐party reli‐

ance that could be found nowhere in the statute.

We see nothing in RICO, as the Supreme Court has inter‐

preted it, that would bar the Casinos from pursuing their

claim with respect to the ’08 Act. There was no more directly

injured party standing between the Casinos and the alleged

wrongdoer, and thus no one else to whom they could look

for relief; their injuries were not derivative. The money they

paid pursuant to the ’08 Act did not compensate the State of

Illinois for any losses to the state. Rather, the Casinos them‐

selves suffered the only injury resulting from the Racetracks’

alleged conspiracy to enact the ’08 statute.

The Casinos do not occupy the role of disgruntled tax‐

payer here. That, too, would pose a problem for them, as Ill.

ex rel. Ryan v. Brown, 227 F.3d 1042 (7th Cir. 2000), demon‐

strates. There we rejected the plaintiffs’ allegation that the

defendant bribed the state treasurer in exchange for large

deposits of state money. Plaintiffs, acting only in their capac‐

ity as ordinary Illinois taxpayers, sued to recover the state’s

losses. But they had “suffered only in the general way that

all taxpayers suffer when the state is victimized by dishones‐

ty.” Id. at 1045. Only “the State of Illinois itself was directly

injured by the misdirection of its funds into ... the pockets of

miscreants.” Id. Therefore, we held, the “State [was] the

proper party to be suing, not the plaintiffs.” Id. at 1046.

Here, the general limitation on taxpayer standing found

in Article III does not apply. The Casinos do not “challenge

laws of general application where their own injur[ies] [are]

not distinct from that suffered in general by other taxpayers

or citizens.” See Hein v. Freedom from Religion Found., Inc., 551
No. 13‐2972 21

U.S. 587, 598 (2007), quoting ASARCO, Inc. v. Kadish, 490 U.S.

605, 613 (1989) (Kennedy, J.). The ’08 Act taxed only five enti‐

ties in the entire state. Other taxpayers and citizens were un‐

affected. Moreover, the Casinos are not challenging the tax

itself in this litigation, having lost earlier efforts pursuing

that theory. Rather, they seek damages from a private party

for an alleged conspiracy to use the power of state govern‐

ment to take money from them. Their injury is easily meas‐

ured, and it is directly traceable to the Racetracks’ alleged

conduct (bribing the governor to sign the ’08 Act) and reme‐

diable by this court. See Lujan v. Defenders of Wildlife, 504 U.S.

555, 560–61 (1992). They thus face no standing barrier to

their lawsuit under Article III.

In closing, we stress that the only RICO element we are

deciding is the issue of proximate cause. To sustain their sec‐

tion 1962(d) conspiracy claim, the Casinos must ultimately

show “that (1) the defendant[s] agreed to maintain an inter‐

est in or control of an enterprise or to participate in the af‐

fairs of an enterprise through a pattern of racketeering activ‐

ity, and (2) the defendant[s] further agreed that someone

would commit at least two predicate acts to accomplish

these goals.” DeGuelle v. Camilli, 664 F.3d 192, 204 (7th Cir.

2011) (internal quotation marks omitted); see also Roger

Whitmore’s Auto. Servs., Inc. v. Lake Cnty., Ill., 424 F.3d 659,

674 (7th Cir. 2005); Brouwer v. Raffensperger, Hughes & Co., 199

F.3d 961, 964 (7th Cir. 2000). We recognize that our rejection

of the Casinos’ claims based on the ’06 Act may have an im‐

pact on their ability to show that the defendants agreed to

the commission of two predicate acts, see Brouwer, 199 F.3d

at 964, or that the defendants “knowingly agreed to perform

services of a kind [to] facilitate the activities of those ... op‐

erating the enterprise in an illegal manner,” id. at 967. We are
22 No. 13‐2972

reluctant to delve into those issues without a proper adver‐

sary presentation. Instead, because the evaluation of the case

as a whole may be affected by our decision on proximate

cause, we confirm that the district court is free on remand to

revisit its decisions on the other RICO elements should the

parties choose to revisit them in light of this opinion.

IV

If the Casinos are correct, the Racetracks agreed to pay

Governor Blagojevich $100,000 in exchange for his signature

on the ’08 Act. The direct and immediate consequence of that

illegal agreement was to deprive the Casinos of 3% of their

annual revenue. There is “a direct relation between the inju‐

ry asserted and the injurious conduct alleged.” See Bridge,

553 U.S. at 654–55. Accordingly, we REVERSE the district

court’s grant of summary judgment insofar as it relates to the

signing of the ’08 Act and REMAND for further proceedings

consistent with this opinion.