By Brandi O. Brown, J.D.
Continuity under RICO was not satisfied in their complaint because once all of the plaintiffs were forced out of their jobs, nine to ten months after they began investigating, the alleged scheme of retaliation ended.
A federal district court in Illinois told a group of plaintiffs, former village police officers, either to go back to the drawing board on their RICO claim and/or to take their other claims to state court. The officers, who alleged they were fired or forced out of their jobs after finding and reporting corruption involving the mayor, a trustee, and a building commissioner/part-time police officer, did not sufficiently allege the continuity element of a RICO claim. Because the court dismissed that claim, it dismissed the state law claims as well on jurisdictional grounds, but it did so without prejudice to the plaintiffs coming back with a restated RICO claim. The defendants’ motion to dismiss was granted (Sciarrone v. Amrich, June 3, 2020, Ellis, S.).
New investigation. In 2018 a former part-time police officer for the Village of Island Lake, also the part-time Building Commissioner/Code Enforcement Officer for the village, applied again to become a part-time officer with the police department. The police chief assigned officers to investigate his background, which uncovered a hornet’s nest of problems. Internal to the department, they learned that the applicant had lied on an earlier successful application with the department and had resigned from the position he obtained as a result of that falsified application after it was determined he had sexually harassed female officers. He was “reinstated” in 2013, after a three year gap in which he served as the mayor’s campaign manager. His reinstatement resulted from what was alleged to be a bogus investigation clearing his name.
Improprieties uncovered. In fact, the applicant’s relationship with the Mayor and a village trustee, and its benefits, ultimately became the focal point of the 2018 investigation. Specifically, the investigators learned that the mayor would “look the other way” with regard to the applicant’s activities as the village’s only Building Commissioner/Code Enforcement Officer. For example, they discovered that the applicant did favors for a village trustee, also a defendant, such as allowing him to violate ordinances and use village-purchased materials for building on his private property. There was also reason to believe that the applicant and trustee had mishandled money.
Backlash. Based on what they learned, the plaintiffs became “[c]onvinced that Defendants had entered into a mutually beneficial corrupt enterprise.” They provided the results of their investigation to the State’s Attorney and the FBI. However, they alleged that once their investigation was discovered, the trustee, applicant, and mayor started pressuring them for details on the investigation. The trustee tried to order the Police Chief to stop the investigation and, along with the applicant, complained to the Village Board. Ultimately, the village terminated the police chief and one of the officers involved in the investigation and forced another to resign. The chief and two officers filed suit, alleging violations of RICO, the Illinois Whistleblower Act, and Illinois common law against the mayor, the applicant, the trustee, and the village. The defendants filed a motion to dismiss.
RICO claim insufficient. With respect to the RICO count, the court granted the motion, without prejudice. In that count, the employees alleged that they lost their jobs as a result of the individual defendants’ RICO violations. However, the court agreed with the defendants that the employees failed to adequately plead the “pattern” element required for that claim because they failed to satisfy the “continuity plus relationship” test. In other words, they needed to identify predicate acts of racketeering activity that were related and posed a danger of continued criminal activity.
No open-ended conduct. They failed to satisfy the “continuity” prong, based on the allegations in their complaint. First, they failed to contend that the individual defendants’ conduct was open-ended, that it was “part of an ongoing and regular way of doing business” or that they “operate a long-term criminal association.” The retaliatory scheme alleged by the plaintiffs had a “clear and terminable goal,” as well as a “natural ending point.” The goal was to remove the plaintiffs from the police force, which was accomplished. Thus, there was no threat of repeated criminal activity to support continuity under an open-ended theory. None of the facts alleged supported the idea that the individual defendants would retaliate against other employees in the future, particularly since there was no none left to retaliate against.
No close-ended continuity either. With regard to continuity based on closed-ended conduct, the factors outlined by the Seventh Circuit in Morgan v. Bank of Waukegan guided the court’s analysis. Duration was the most important aspect of that analysis, the court explained, and in this case the complained-of acts took place over a period of nine to ten months. While there was no “bright-line rule” governing duration, the court explained that nine to ten months did not qualify as sufficiently substantial. The remaining Morgan factors also “cut against” a continuity finding.
The alleged acts affected only a few people and were all done in furtherance of a single scheme with the sole purpose of retaliation against those individuals. Each of the victims suffered the same injury (job loss) as the result of that scheme. The complaint alleged only a handful of retaliatory acts, including the applicant’s false complaints of harassment, the trustee’s authorization to hire a law firm to investigate two of the plaintiffs, the police chief being placed on administrative leave, and the mayor forcing all of the plaintiffs, plus one other investigator to leave their jobs.
Most importantly, however, the employees failed to allege that the individual defendants had engaged in retaliatory misconduct before they became aware of the investigation or that they did so after they were discharged. Thus, the scheme had a “built-in end point” and no further criminal conduct was necessary.
State law claims. The court dismissed the claim without prejudice, declining to foreclose possibility that the plaintiffs could adequately amend it to state a claim. In light of that dismissal, however, the court relinquished jurisdiction over the remaining state law claims.
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