We know former Speaker of the Illinois House of Representatives Michael Madigan has been indicted for RICO violations including “pay to play” schemes. He allegedly has demanded payments to associates in exchange for legislative action. You probably do not know there was a RICO class action filed on behalf of Com Ed electricity customers against the giant utility contending it bribed Madigan in order to secure legislation which makes it easier to raise electric rates in Illinois. Proving the Illinois General Assembly passed legislation because of bribes to the Speaker of the House as opposed to legitimate policy reasons would be difficult at best. The plaintiffs would have to find legislators who would confess to voting for these bills because of the bribes and not what they thought was good public policy. What legislators would admit to that? Certainly not Madigan. He is vigorously defending himself in the federal government’s RICO prosecution.
The district court dismissed the suit largely on this basis, believing it intruded too deeply in the affairs of the legislative branch of government, effectively a separation of powers problem. It reached this conclusion even though the Seventh Circuit had allowed a similar bribery RICO case involving former Governor Blagojevich to move forward. The ratepayers appealed and yesterday they lost. But the Seventh Circuit ruled against them on a different ground than the district court. It relied on the “filed rate doctrine,” which has been used to defeat other RICO cases. Essentially it holds that when a state regulatory body approves a rate that is the equivalent of a statute. So the plaintiffs are essentially asking a court to rewrite a law. Courts do not do that. They interpret laws.
But in the end the Seventh Circuit and other courts that have used the filed rate doctrine to defeat RICO cases are saying is that they just do not want to allow plaintiffs to challenge utility rates even when they are tainted by bribery. This seems unjust. After all RICO makes bribery a predicate offense. But courts just don’t want to give plaintiffs a lot of leeway to delve into sensitive areas, and accusing elected officials of being bribed is very sensitive. The Seventh Circuit also couched this hesitancy in the lingo of proximate causation, citing the Supreme Court’s Anza decision which dealt with proving lost profits caused by unfair competition. Basically, it does not want courts to scrutinize legislatures.
Creative plaintiffs’ lawyers beware: courts are not usually receptive to creative cases which could open a flood of copycat lawsuits. And this one would have done just that if it was able to move forward. There are plenty of corrupt politicians who could be accused of bribery, and one case easily see how cases like this would follow them.
If you have an interesting idea for a RICO case, you should speak to experienced RICO counsel before filing. We are here to help. Call Foster PC, the RICO Authority.