Holmes et al v. City of Racine et al

Filing 93

ORDER signed by Judge J P Stadtmueller on 10/31/14: pursuant to 82 the agreement of the plaintiffs, the plaintiffs' 42 U.S.C. § 1985(3) claims are DISMISSED in their entirety and Khampanes and Nueakeaw's 42 U.S.C. § 1983 claim against Helding is DISMISSED; the Municipal Defendants' 70 motion to dismiss the amended complaint is DENIED; the Political Staff Defendants' 67 motion to dismiss the amended complaint is granted in part, insofar as the Plaintiffs 9; claims against Osterman and Jerger are DISMISSED, and denied in part, insofar as the Court will allow the Plaintiffs to proceed on their claims against Nicholson; Sutherland's 73 Motion to dismiss the amended complaint is granted and the p laintiffs' claims against Sutherland are DISMISSED; the Tavern League's 75 motion to dismiss the amended complaint is granted and the plaintiffs' claims against the Tavern League are hereby DISMISSED; and, Downtown Racine Corporation, Jeffrey Coe, and Cerafin Davalos are terminated as parties in this action. (cc: all counsel)(nm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
THOMAS J. HOLMES d/b/a Park 6 Bar LLC,
OTHA KEITH FAIR d/b/a The Place on 6th LLC,
JOSE MALDONADO d/b/a The Cruise Inn,
MARIA E. MALDONADO d/b/a The Cruise Inn,
WILBUR JONES d/b/a Viper’s Lounge,
PYTHAPHONE KHAMPANE
d/b/a Ginger’s Lounge, and
OMJAI NUEAKEAW d/b/a Ginger’s Lounge

Case No. 14-CV-208-JPS

Plaintiffs,
v.
CITY OF RACINE,
GARY BECKER, JOHN DICKERT,
TAVERN LEAGUE OF RACINE CITY,
KURT S. WAHLEN, JAMES KAPLAN,
GREGORY T. HELDING,
DAVID L. MAACK, ARON WISNESKI,
ROBERT E. MOZOL, DEVIN P. SUTHERLAND,
MARK L. LEVINE, JOSEPH G. LEGATH,
DOUGLAS E. NICHOLSON,
MONTE G. OSTERMAN, MARY OSTERMAN,
and GREGORY S. BACH,

ORDER

Defendants.
The plaintiffs filed their initial Complaint (the “Complaint,” or the
“original Complaint”) in this action on February 25, 2014. (Docket #1
(“Compl.”)). They alleged that the defendants engaged in illegal activities to
eliminate minority-owned bars from downtown Racine, Wisconsin, and sued
the defendants under the Civil Rights Act (“CRA”), 42 U.S.C. §§ 1983,
1985(3), and the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. §§ 1962(b)–(d). (Compl., ¶¶ 4–5).
The defendants then filed four separate motions to dismiss. (Docket
#25, #28, #31, #36). The Court reviewed those motions and determined that
the plaintiffs’ complaint was, indeed, deficient. (Docket #60). The Court was

particularly concerned with the fact that the complaint was extremely vague.
(E.g., Docket #60 at 27–28). In the original Complaint, the plaintiffs had not
adequately distinguished which claims it had intended to assert against
particular defendants. (E.g., Docket #60 at 27–28). Nonetheless, the Court
found that the claims generally had some merit, in spite of the confusing
pleadings, and so allowed the plaintiffs to amend their complaint. (E.g.,
Docket #60 at 3, 27–29).
The plaintiffs amended their complaint, generally clarifying their
allegations. (Docket #62 (“Am. Compl.”)).1 Thereafter the defendants again
filed four separate motions to dismiss. (Docket #67, #70, #73, #75). Those
motions are fully briefed (Docket #82, #84, #86, #88, #89), and the Court now
turns to decide them.
1.

BACKGROUND
The Court begins by addressing the background of this case. In doing

so, it expects the reader to be familiar with its recitation of the factual
background, as appeared in its order dismissing the plaintiffs’ original
Complaint, and so does not provide as detailed an overview as appeared in
that order. (Docket #60 at 3–9). Nonetheless, for ease of reading, the Court
will again provide a short discussion of the parties and their general
allegations. Thereafter, the Court discusses the plaintiffs’ Amended
Complaint, the changes made therein, and the specific claims that now
remain in this case. The Court then discusses, generally, the defendants’
outstanding motions to dismiss and the arguments that form the basis for
those motions. Finally, the Court will discuss, with greater specificity, the

1

The Court will describe the changes to the Amended Complaint in further
detail in Section 1.2, infra.

Page 2 of 36

plaintiffs’ conspiracy- and RICO-related allegations, as the defendants’
motions to dismiss are focused primarily on the dismissal of the plaintiffs’
RICO claims. After providing that background, the Court will turn to its
substantive analysis of the motions to dismiss, in Section 2 of this order.
1.1

Parties and Allegations2

There are seven plaintiffs remaining in this case.3 They are all either
black, Hispanic, or Thai, and owned several bars located in downtown
Racine:
(1)

Thomas Holmes is black and owned and operated the Park 6
Bar from 2008 to 2011 (Am. Compl., ¶ 9);

(2)

Otha Keith Fair is black and owned and operated The Place
on 6th, LLC, from 2009 to 2012 (Am. Compl., ¶ 10);

(3-4)

Pythaphone Khampane and Omjai Nueakeaw are ThaiAmerican and Thai, respectively, and together owned and
operated Ginger’s Lounge from 2008 to 2011 (Am. Compl.
¶¶ 11–12);

(5)

Wilbur Jones is black and owned and operated Viper’s
Lounge from 1998 to 2008 (Am. Compl. ¶ 13);

(7–8) Jose Maldonado and Maria Maldonado are Hispanic and
together owned and operated The Cruise Inn from 2001 to
2006 (Am. Compl. ¶ 14).
They brought suit against a number of defendants, including the City of
Racine and various individuals and groups involved in Racine’s local politics.
(See Compl. ¶¶ 16–35). Those defendants have appeared in several separate
groups, as follows:

2

The Court has drawn large portions of this background material from its
order dismissing the original Complaint, making alterations where necessary to
reflect changes in the Amended Complaint.
3

Cerafin Davalos was named as a plaintiff in the original Complaint, but no
longer is listed as a plaintiff.

Page 3 of 36

(1)

the Municipal Defendants, which includes:
(a)

the City of Racine (hereinafter “Racine” or “the City”)
(Am. Compl. ¶ 15);

(b)

Gary Becker, Racine’s former mayor, who served in
that position from April of 2003 until January 20, 2009
(Am. Compl. ¶ 16);

(c)

John Dickert, Racine’s current mayor, who has held
that position since May of 2009 (Am. Compl. ¶ 18);

(d)

Kurt Wahlen, who served as Racine’s police chief from
September of 2006 until April of 2011 (with a short
additional stint as interim chief between July of 2011
and July of 2012) (Am. Compl. ¶ 19);

(f)

James Kaplan, an alderman sitting on Racine’s
Common Council from April of 2006 through present,
during which time he has served on the City’s Board of
Health and Licensing Committee (Am. Compl. ¶ 20);

(h)

Gregory Helding, an alderman sitting on Racine’s
Common Council from April of 2005 through present,
during which time he served on the City’s Licensing
Committee (Am. Compl. ¶ 21);

(i)

David Maack, an alderman sitting on Racine’s Common
Council from April of 2000 through April of 2010,
during which time he served on the City’s Licensing
Committee (Am. Compl. ¶ 22);

(j)

Aron Wisneski, an alderman sitting on Racine’s
Common Council from April of 2006 through July of
2012, during which time he served on the City’s
Licensing Committee (Am. Compl. ¶ 23);

(k)

Robert Mozol, an alderman sitting on Racine’s
Common Council from April of 2007 through April of
2013, during which time he served on the City’s
Licensing Committee (Am. Compl. ¶ 24);

Page 4 of 36

(l)

(m)

Mark Levine, who serves as the chairman of BID #1 and
also owns property within BID #1 (Am. Compl. ¶ 26);

(n)

(2)

Devin Sutherland, who serves as manager of Racine’s
Downtown Business Improvement District (“BID #1”)
and executive director of the Downtown Racine
Corporation (the Court will discuss both BID #1 and the
Downtown Racine Corporation in further detail, below)
(Am. Compl. ¶ 25);

Joseph (or “Joey”) LeGath, a member of the BID #1
board, who also owns several bars in Racine and serves
as the director of the Racine City Tavern League (which
the Court will discuss further, below) (Am. Compl.
¶ 27);

the Political Staff Defendants, a term the Court has used to
describe the group that includes:
(a)

Doug Nicholson, a member of the Racine City Tavern
League and former campaign worker for current-Mayor
Dickert, who owns several bars within BID #1 and also
serves on the City’s Board of Ethics (Am. Compl. ¶ 28);

(b)

Monte Osterman (“Osterman”), who assisted Mayor
Dickert with his 2009 and 2011 mayoral campaigns,
operates Osterman Granite and Marble (a business
within the BID #1), and is currently the District #3
Racine County Supervisor (Am. Compl. ¶ 29); and

(c)

Mary Jerger Osterman (“Jerger”), who served as Mayor
Dickert’s treasurer for his 2009 and 2011 mayoral
campaigns, owns Copacetic (a business within the BID
#1), and was appointed to the City’s Board of Ethics by
Dickert (Am. Compl. ¶ 30);

Page 5 of 36

(3)

the Downtown Racine Corporation, through Devin
Sutherland,4 a private, non-profit corporation that works to
enhance Downtown Racine’s image and functionality and
contracts with the City to manage BID #1, the Downtown
Racine Corporation is managed by an Executive Director
(Sutherland, who is also one of the Municipal Defendants) and
governed by a Board of Directors (some of whom are named
Municipal Defendants) (See Am. Compl. ¶ 25); and

(4)

the Racine City Tavern League (the “Tavern League”), a nonprofit corporation that, essentially, serves as a lobbying group
for alcohol retailers in Racine, Wisconsin, and currently has
“dozens of members, nearly all of whom are white” (Am.
Compl. ¶ 17).

Stated as generally as possible, the plaintiffs allege that current-Mayor
Dickert conspired with donors (including white business owners),
Alderpersons, the Police Department, the BID #1 board members, and the
Tavern League. Together, that group discriminated against the plaintiffs by
ensuring that the plaintiffs would be subject to a significant number of
complaints and reports to police, which in turn required them to appear
before the Common Council—which, the theory goes, Dickert essentially
controlled—for civil proceedings in which the plaintiffs had to agree to take
expensive remediation steps or face loss of their liquor licenses. Meanwhile,
through this alleged conspiracy, the white-owned bars in the area had similar
or higher number of incidents, but were reported less often or mis-reported

4

Devin Sutherland is represented by Meissner Tierney Fisher & Nichols,
S.C., as one of the Municipal Defendants, but has also apparently personally
retained Wilson Elser Moskowitz Edelman & Dicker, LLP. As the Court will discuss
further in Section 1.2, infra, Downtown Racine Corporation is no longer listed as a
defendant, and so does not need a motion to dismiss filed on its behalf.
Nonetheless, Wilson Elser has filed a brief on Sutherland’s behalf seeking dismissal
of the claims against him; this brief is in addition to the one Meissner Tierney filed
on behalf of the Municipal Defendants, which seeks dismissal of the claims against
Sutherland (in addition to the claims against the remaining Municipal Defendants).

Page 6 of 36

by police so that the white owners would not face the same level of scrutiny
including civil proceedings and potential license-loss. As a result of these
proceedings, the plaintiffs spent large amounts of money on remediation
efforts and/or lost or relinquished their liquor licenses. The plaintiffs allege
that this activity was a racially-motivated plan to rid downtown Racine of
non-white-owned businesses. (See, e.g., Am. Compl. ¶¶ 31–113).
1.2

Amended Complaint

Those general allegations formed the basis for two groups of claims
in the plaintiffs’ original Complaint: the CRA claims (Compl. ¶¶ 139–150)
and the RICO claims (Compl. ¶¶ 151–184). The CRA claims were, of course,
directed at what the plaintiffs perceive to be racially-motivated
discrimination on behalf of the defendants. The RICO claims, on the other
hand, were directed more toward the allegedly corrupt conspiratorial
activity of the defendants. In any event, the claims were all alleged broadly
and seemingly against every defendant by every plaintiff. This lack of
specificity in “who, precisely, [was] claiming what against whom” prevented
any meaningful notice of claim, and so required dismissal of the original
Complaint. (Docket #60 at 3, 27–29).
The Court allowed the plaintiffs to file an amended complaint, and
they chose to do so. In their Amended Complaint, the plaintiffs have made
three significant changes to the parties:
(1)

Cerafin Davalos is no longer listed as a plaintiff;

(2)

Jeffrey Coe is no longer listed as a defendant;

(3)

Downtown Racine Corporation is no longer listed as a
defendant, although the plaintiffs maintain claims against
Devin Sutherland, the director of Downtown Racine
Corporation (and who is also a Municipal Defendant, but has
filed a personal brief) (Am. Compl. ¶ 25).
Page 7 of 36

The plaintiffs having made those changes, the Court will treat those parties
as having been effectively dismissed from this case.
Perhaps more importantly, though, the plaintiffs have made
substantial efforts to clarify their claims. They, like the Court, group their
claims into two broad categories: the CRA claims and the RICO claims.5
Beyond that, the plaintiffs have provided the Court with specific statements
to define what sort of claim each plaintiff brings and who each claim is
against.
(1)

CRA claims:
(a)

Holmes alleges claims against Wisneski, Kaplan,
Helding, Mozol, Maack, and Wahlen, under both 42
U.S.C. §§ 1983 and 1985(3) (Am. Compl. ¶¶ 200–219).

(b)

Fair alleges claims against Wisneski, Kaplan, Helding,
Mozol, and Maack, under both 42 U.S.C. §§ 1983 and
1985(3) (Am. Compl. ¶¶ 183–199).

(c)

Khampane and Nueakeaw allege claims against
Wisneski, Kaplan, Mozol, Maack, Helding, and Dickert
under both 42 U.S.C. §§ 1983 and 1985(3) (Am. Compl.
¶¶ 166–182).

(d)

Jones alleges claims against Becker, Maack, Helding,
Kaplan, Mozol, Wisneski, and Wahlen under both 42
U.S.C. §§ 1983 and 1985(3) (Am. Compl. ¶¶ 148–165).

5

The CRA claims, in turn, come in two flavors: standard deprivation of civil
rights claims, under 42 U.S.C. § 1983; and conspiracy to deprive claims, under 42
U.S.C. § 1985(3). The RICO claims, meanwhile, are of three separate types: a RICO
acquisition claim, under 18 U.S.C. § 1962(b); a RICO conduct claim, under 18 U.S.C.
§ 1962(c); and a RICO conspiracy claim, under 18 U.S.C. § 1962(d). The plaintiffs
allege different permutations of these claims against the defendants, as the Court
will describe in further detail.

Page 8 of 36

(e)

(f)

(2)

the Maldonados allege claims against Becker, Maack,
and Helding under 42 U.S.C.§§ 1983 and 1985(3)6 (Am.
Compl. ¶¶ 114–147).
all of the plaintiffs, jointly, allege 42 U.S.C. § 1983 claims
against the City of Racine, pursuant to Monell v. Dep’t of
Soc. Servs. of the City of New York, 436 U.S. 658 (1978)
(Am. Compl. ¶¶ 220–227).

RICO claims:
(a)

Holmes asserts
(i)

claims against LeGath under 42 U.S.C. §§ 1962(b)
and (d) (Am. Compl. ¶¶ 255–260);

(ii)

claims against Nicholson under 42 U.S.C.
§§ 1962(b) and (d) (Am. Compl. ¶¶ 261–266);

(iii)

claims against the Tavern League under 42
U.S.C. §§ 1962(b) and (d) (Am. Compl.
¶¶ 267–272);

(iv)

claims against Dickert under 42 U.S.C.
§§ 1962(b), (c), and (d) (Am. Compl. ¶¶ 273–278);

(v)

claims against Kaplan, Helding, Mozol,
Wisneski, and Maack, under 42 U.S.C. § 1962 (d)
(Am. Compl. ¶¶ 279–286);

(vi)

a claim against Osterman under 42 U.S.C.
§ 1962(d) (Am. Compl. ¶¶ 287–291);

(vii)

a claim against Jerger under 42 U.S.C. § 1962(d)
(Am. Compl. ¶¶ 292–296);

6

It is not entirely clear that the Maldonados wish to maintain a 42 U.S.C.
§ 1985(3) claim against Becker, Maack, and Helding. The heading of their claim
section reads only “Maldonados/The Cruise Inn v. Becker, Maack, Helding
Pursuant to 42 U.S.C. 1983,” (see Am. Compl. at 30) whereas the claims section
headers for the other defendants also include reference to “42 U.S.C. 1985” (see Am.
Compl. at 36 (Jones), 41 (Khampane/Nueakeaw), 45 (Fair), 49 (Holmes)).
Nonetheless, as the Court will discuss further, all of the plaintiffs have agreed to
dismiss their 42 U.S.C. § 1985(3) claims. Accordingly, this is of little importance.

Page 9 of 36

(viii) a claim against Wahlen under 42 U.S.C. § 1962(d)
(Am. Compl. ¶¶ 297–304);
(ix)
(x)
(b)

a claim against Levine under 42 U.S.C. § 1962(d)
(Am. Compl. ¶¶ 305–308); and
a claim against Sutherland under 42 U.S.C.
§ 1962(d) (Am. Compl. ¶¶ 309–315).

Fair asserts
(i)

claims against LeGath under 42 U.S.C. §§ 1962(b)
and (d) (Am. Compl. ¶¶ 316–321);

(ii)

claims against Nicholson under 42 U.S.C.
§§ 1962(b) and (d) (Am. Compl. ¶¶ 322–327);

(iii)

claims against the Tavern League under 42
U.S.C. §§ 1962(b) and (d) (Am. Compl.
¶¶ 328–333);

(iv)

claims against Dickert under 42 U.S.C.
§§ 1962(b), (c), and (d) (Am. Compl. ¶¶ 334–339);

(v)

claims against Kaplan, Helding, Mozol,
Wisneski, and Maack, under 42 U.S.C. § 1962 (d)
(Am. Compl. ¶¶ 340–346);

(vi)

a claim against Osterman under 42 U.S.C.
§ 1962(d) (Am. Compl. ¶¶ 347–351);

(vii)

a claim against Jerger under 42 U.S.C. § 1962(d)
(Am. Compl. ¶¶ 352–356);

(viii) a claim against Wahlen under 42 U.S.C. § 1962(d)
(Am. Compl. ¶¶ 357–362); and
(ix)
(c)

a claim against Levine under 42 U.S.C. § 1962(d)
(Am. Compl. ¶¶ 363–366).

Khampane and Nueakeaw assert
(i)

claims against LeGath under 42 U.S.C. §§ 1962(b)
and (d) (Am. Compl. ¶¶ 367–372);

(ii)

claims against Nicholson under 42 U.S.C.
§§ 1962(b) and (d) (Am. Compl. ¶¶ 373–378);
Page 10 of 36

(iii)

claims against the Tavern League under 42
U.S.C. §§ 1962(b) and (d) (Am. Compl.
¶¶ 379–384);

(iv)

claims against Dickert under 42 U.S.C.
§§ 1962(b), (c), and (d) (Am. Compl. ¶¶ 385–390);

(v)

claims against Kaplan, Helding, Mozol,
Wisneski, and Maack, under 42 U.S.C. § 1962 (d)
(Am. Compl. ¶¶ 391–396);

(vi)

a claim against Osterman under 42 U.S.C.
§ 1962(d) (Am. Compl. ¶¶ 397–401);

(vii)

a claim against Jerger under 42 U.S.C. § 1962(d)
(Am. Compl. ¶¶ 402–406); and

(viii) a claim against Wahlen under 42 U.S.C. § 1962(d)
(Am. Compl. ¶¶ 407–411).
In sum, each plaintiff alleges CRA claims against Municipal
Defendants alone.7 The plaintiffs do not allege any CRA claims against the
Political Staff Defendants, the Tavern League, the Downtown Racine
Corporation,8 or certain Municipal Defendants (Sutherland, Levine, and
LeGath).
Only Holmes, Fair, Khampane, and Nueakeaw assert any RICO
claims, and they do so against a combination of Municipal Defendants,
Political Staff Defendants, the Tavern League, and Sutherland. Meanwhile,
Jones and the Maldonados do not assert any RICO claims.

7

For any given plaintiff, this is some permutation of Municipal Defendants
including Wisneski, Kaplan, Helding, Mozol, Maack, Wahlen, Dickert, and Becker.
Additionally, each plaintiff alleges a Monell claim against the City of Racine.
8

Again, it appears that there are no claims remaining against the Downtown
Racine Corporation, although Sutherland has filed motions to dismiss the RICO
claims against him, personally.

Page 11 of 36

1.3

Motions to Dismiss

Having described the currently-pending claims, the Court next turns
to briefly describe the nature of the defendants’ respective motions to
dismiss.
The Municipal Defendants have filed what the Court views as the
primary briefs in support of dismissal. (Docket #71, #86). The other
defendants have generally adopted the Municipal Defendants’ arguments.
The Municipal Defendants seek the following relief:
(1)

dismissal of Jones’ 42 U.S.C. § 1983 claims against Helding and
Maack;

(2)

dismissal of Khampane and Nueakeaw’s 42 U.S.C. § 1983
claims against Helding;9

(3)

dismissal of the 42 U.S.C. § 1985(3) claims in their entirety;10
and

(4)

dismissal of the RICO claims in their entirety.

(Docket #71 at 44).
If the Court were to grant that request in its entirety, it would leave
only 42 U.S.C. § 1983 claims outstanding. And, to be clear, the Municipal
Defendants have generally agreed that the 42 U.S.C. § 1983 claims should
proceed (except as the Court just described). (See Docket #71 at 2 (stating that
plaintiffs’ claims “undoubtedly sound in civil rights actions pursuant to 42
U.S.C. § 1983, which they have brought, and which the Municipal Defendants
concede should proceed—except as described…with respect to certain of the
Municipal Defendants who played no role in certain licensing decisions.”)).

9

The plaintiffs have agreed to dismiss this claim. (Docket #82 at 1 n.1).

10

The plaintiffs have also agreed to dismiss this claim. (Docket #82 at 1 n.1).

Page 12 of 36

In the event the Court totally acceded to the Municipal Defendants’
request, the Political Staff Defendants, the Tavern League, the Downtown
Racine Corporation (to the extent it is not already dismissed), Sutherland,
Levine, and LeGath, would be dismissed from the case entirely, because
there are only RICO claims currently pending against them. Given that
enticing possibility, the Political Staff Defendants, the Tavern League, and
Sutherland have all filed their own motions to dismiss and related briefs,
adopting and supplementing the Municipal Defendants’ RICO-related
arguments with the hope of getting all of the RICO claims—and thus
themselves—dismissed entirely from this case. (See Docket #67, #68, #73, #74,
#75, #76, #84, #88, #89).
1.4

RICO-Related Factual Allegations

The Court must, of course, address the arguments in those briefs. But,
before doing so, the Court will first discuss the plaintiffs’ specific RICOrelated allegations. While the Court discussed the plaintiffs’ discriminationrelated allegations in some detail in its order dismissing the original
Complaint, (Docket #60 at 3–9), it has not yet provided a detailed overview
of the RICO-related allegations. And, seeing as the defendants’ motions to
dismiss primarily seek the dismissal of the RICO claims,11 the Court should
detail the allegations that specifically relate to those claims before
determining whether they should be dismissed.
Generally, the plaintiffs allege—and the Court wishes to make clear
that the discussion that follows is based solely on allegations at this

11

Because the plaintiffs have agreed to dismiss their 42 U.S.C. § 1985(3)
claims, the Court will not go into great detail in analyzing the Municipal
Defendants’ argument on that topic.

Page 13 of 36

point12—that Dickert received money from the Tavern League and other
tavern owners and, in exchange, appointed alderpersons who would create
issues for minority bar owners in downtown Racine. (See, e.g., Am. Compl.
¶¶ 231–32). After those minority owners lost their licenses, the tavern owners
who were bribing Dickert (and who are also, presumably, white) gained
access to those licenses. (Am. Compl. ¶ 232).
More specifically, the plaintiffs assert that Dickert accepted thousands
of dollars from “the Financiers”—Nicholson, LeGath, the Tavern League, and
other unidentified tavern owners—during and after his 2009 and 2011
mayoral campaigns. (Am. Compl. ¶¶ 230, 235).
The first incidents of bribery occurred prior to the April 2009 mayoral
primary election. (Am. Compl. ¶ 249(a)). At that time, LeGath provided
Dickert’s finance director with $300.00 to $400.00 in cash, informing him that
the money was for Dickert’s campaign, but that LeGath could not be
identified in the campaign finance report. (Am. Compl. ¶ 249(a)). LeGath
then sent two additional unidentified individuals to carry out similar
transactions prior to the primary election, each time providing $200.00 to
Dickert’s campaign coffers with instructions not to identify the source of the
cash in finance reports. (Am. Compl. ¶ 249(b)).
Also prior to the primary, Nicholson paid $1,000.00 to the Dickert
campaign. (Am. Compl. ¶ 249(e)). He provided that payment to Dickert’s
finance director in the form of ten bankwrapped $100.00 bills. (Am. Compl.
¶ 249(e)). In doing so, Nicholson explained that the money had come from
12

The Court must accept those allegations as true, at this stage of the
proceedings. See, e.g., Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (complaint must
“contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’”) (emphasis added; quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007))

Page 14 of 36

a fundraiser at his bar at which he had set out a jar for donations. (Am.
Compl. ¶ 249(e)). Dickert’s finance director, however, had been present at the
fundraiser and did not remember seeing a donation jar. (Am. Compl.
¶ 249(e)). This precise sequence of events occurred again shortly thereafter.
(Am. Compl. ¶ 249(g)). In total, the Dickert campaign received $2,000.00 from
Nicholson prior to the primary election. (Am. Compl. ¶¶ (e, g)). Dickert
instructed his finance director to mis-report those funds as having come from
Nicholson, Nicholson’s wife, the finance director, and other unknown
individuals. (Am. Compl. ¶¶ 249(f, h)).
Dickert won the primary election, and thereafter the course of bribery
continued. LeGath again personally provided $300.00 to $400.00 and had
unidentified accomplices provide $200.00 to Dickert’s finance director with
instructions that the finance reports not reflect those amounts. (Am. Compl.
¶¶ 249(c–d)).
Dickert arranged a meeting with another business owner (who is
known, but unnamed in the Amended Complaint) and enticed him to “do
the same thing” as Nicholson—namely provide bribes. (Am. Compl. ¶ 249(j)).
That business owner complied, providing Dickert’s finance director with
$1,200.00 in large bills that he said he had received from a donation jar. (Am.
Compl. ¶ 249(k)). The business owner apparently made this statement and
took this action entirely at Dickert’s bidding, in an attempt to secure favor to
redevelop a section of downtown Racine. (Am. Compl. ¶ 249(k)). That
support lasted only so long as the bribes: when the business owner refused
to pay any additional money, Dickert’s administration terminated his
support for the redevelopment project. (Am. Compl. ¶ 249(l)).

Page 15 of 36

Then, before Dickert’s 2011 re-election, the Tavern League, Nicholson,
and LeGath, held an additional fundraiser at which Tavern League members
were called upon to provide bribes to Dickert.
Throughout this time, knowing that this system of bribes was illegal,
Dickert, together with the Financiers and his allies, developed a system to
“wash” the bribes. (Am. Compl. ¶¶ 237–238). Specifically, Dickert
encouraged Jerger, his campaign treasurer, to report the bribes as campaign
contributions and attribute them to people other than the Financiers. (Am.
Compl. ¶¶ 238, 240). Jerger allegedly complied and reported the
contributions as having come from unrelated individuals for varying
amounts. (Am. Compl. ¶¶ 238, 240). This method worked until the bribes
became so large that Dickert could no longer include them on his finance
reports without causing alarm. (Am. Compl. ¶ 239). So Dickert and Jerger
simply stopped reporting the bribes entirely. (Am. Compl. ¶ 239). The
re-election bribes from 2011 simply were not reported on Dickert’s campaign
finance reports. (Am. Compl. ¶ 249(m)). Dickert and Jerger then filed these
false finance reports. (Am. Compl. ¶¶ 251).13
Having received those bribes, Dickert took action in the Financiers’
favor, appointing alderpersons who would focus undue negative attention
on Racine’s minority bars and encouraging the Police Department to harass
those bars. (Am. Compl. ¶¶ 236, 241). The alderpersons, through their
appointed positions on the Licensing Committee, demanded that the
plaintiffs pay exorbitant fines or comply with expensive security directives
(“side agreements”); they also recommended revocation of certain liquor

13

They also allegedly used out-of-state companies, the U.S. mail, and phone
lines and other wire services to solicit donations. (See, e.g., Am. Compl.
¶¶ 252(c)(i–ix)).

Page 16 of 36

licenses. (See, e.g., Am. Compl. ¶¶ 250(d, f–l). As to any licenses that were not
revoked, the Licensing Committee hoped that the burdensome fines and side
agreements would cause the plaintiffs to choose to relinquish their licenses;
thereafter, the Financiers and other preferred white individuals would be
able to access those licenses for their own benefit. (Am. Compl. ¶ 236).
In order to maintain control over the alderpersons so that they would
continue to take the actions he desired, Dickert engaged in a system of
intimidation. (See Am. Compl. ¶ 243). The plaintiffs allege various instances
of such intimidation. (See Am. Compl. ¶ 243). For example, Dickert appointed
alderperson Eric Marcus to the Licensing Committee in 2010. (Am. Compl.
¶ 243(a)). Marcus shortly thereafter began to voice concerns about unfair
treatment of minority bar owners and voted against taking disciplinary
action against some of the plaintiffs in this case. (Am. Compl. ¶ 243(a)).
Thereafter, Dickert declined to re-appoint Marcus to the Licensing
Committee and went so far as to actively campaign in favor of Marcus’
opponent in the next election. (Am. Compl. ¶ 243(a)). Marcus lost that
election and Dickert promptly promoted the victorious opponent to the
Licensing Committee. (Am. Compl. ¶ 243(a)). Another similar incident
occurred in 2013, when Dickert appointed Henry Perez to the Licensing
Committee. (Am. Compl. ¶ 243(b)). Perez also voiced concerns about unfair
treatment of minority bar owners, whereafter Dickert refused to re-appoint
him to the Licensing Committee. (Am. Compl. ¶ 243(b)).
Meanwhile, the Police Department was playing a significant role in
channeling primarily minority-owned establishments to the Licensing
Committee for hearings. (See Am. Compl. ¶ 244). Wahlen, himself, filed
complaints against minority-owned businesses. (Am. Compl. ¶ 244(a)). He
also told his officers to target those businesses while turning a blind eye to
Page 17 of 36

troubles occurring at Financier-owned (read: white-owned) establishments.
(Am. Compl. ¶¶ 244(b–f)). Specifically, he told his officers to prevent and
underreport crimes at Financier-owned establishments; meanwhile, he
placed them in areas where they would be able to observe disturbances at
minority-owned establishments, but would be unlikely to deter or stop such
occurrences, and thereafter would report those disturbances. (Am. Compl.
¶¶ 244(b–d)). He also instructed his officers to report disturbances that
occurred in the vicinity of a minority-owned bar as having actually occurred
at that bar and to exaggerate any incidents at those locations; conversely,
white-owned bars received the benefit of having disturbances at their
locations mis-reported. (Am. Compl. ¶¶ 244(b, e–f)).
Osterman, Sutherland, and Levine also assisted in this scheme.
Osterman threatened Racine business owners with similar harassment by the
police and Licensing Committee if they did not pay bribes to Dickert (or use
Osterman’s own granite contracting company). (Am. Compl. ¶¶ 244(g–h),
250(a–c)). Sutherland recruited witnesses to testify against the minority
business owners, and Levine even provided discounts to tenants in his
properties who would complain about the minority-owned businesses. (Am.
Compl. ¶¶ 244(i–j)).
2.

DISCUSSION
The Court will begin by discussing the claims that the plaintiffs have

agreed to dismiss from their amended complaint. Thereafter, it will examine
the substance of the defendants’ arguments in favor of dismissal of the
remaining claims.
2.1

Plaintiffs’ Agreements to Dismiss

The plaintiffs have agreed to dismiss their 42 U.S.C. §§ 1985(3) civil
rights conspiracy claims in their entirety. (Docket #82 at 1 n.1). They have
Page 18 of 36

also agreed to dismiss Khampane and Nueakeaw’s 42 U.S.C. § 1983 claim
against Helding. (Docket #82 at 1 n.1). The Court will dismiss those claims in
accordance with the plaintiffs’ request.
2.2

Remaining Claims

This leaves only two groups of claims that remain subject to the
defendants’ motions to dismiss: (1) the RICO claims in their entirety; and (2)
Jones’ 42 U.S.C. § 1983 claims against Helding and Maack. The Court will
address each in turn.
In doing so, the Court must accept all of the plaintiffs’ well-pleaded
factual allegations as true to determine whether the complaint states “‘a
claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 663 (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. at 570). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678. This plausibility requirement helps “to protect
defendants from having to undergo costly discovery unless a substantial case
is brought against them.” United States v. Vaughn, 722 F.3d 918, 926 (7th Cir.
2013).
2.2.1

RICO Claims

Holmes, Fair, Khampane, and Nueakeaw assert combinations of RICO
claims against a variety of Municipal Defendants, Political Staff Defendants,
the Tavern League, and Sutherland. In the Court’s prior order, it described
the RICO claims as falling into three separate groups:
(1)

RICO acquisition claims, pursuant to 18 U.S.C. § 1962(b), under
which the plaintiffs allege that certain defendants targeted
them and obtained power or control over their businesses
through a scheme of corrupt and illegal activities.

Page 19 of 36

(2)

RICO conduct claims, pursuant to 18 U.S.C. § 1962(c), under
which the plaintiffs allege that the defendants conducted
corrupt and illegal activities through their businesses or the
Racine municipal government.

(3)

RICO conspiracy claims, pursuant to 18 U.S.C. § 1962(d), under
which the plaintiffs allege that the defendants conspired in
carrying out the corrupt and illegal activities.

To help the Court and the parties keep straight which plaintiffs are suing
which defendants and under which theories, the Court has prepared several
tables to list the various claims:
HOLMES CLAIMS
TYPE OF CLAIM

DEFENDANTS

18 U.S.C. § 1962(b) acquisition

LeGath, Nicholson, Tavern League, Dickert

18 U.S.C. § 1962(c) conduct

Dickert

18 U.S.C. § 1962(d) conspiracy

LeGath, Nicholson, Tavern League, Dickert, Kaplan,
Helding, M ozol, W isneski, M aack, Osterman, Jerger,
W ahlen, Levine, Sutherland

FAIR CLAIMS
TYPE OF CLAIM

DEFENDANTS

18 U.S.C. § 1962(b) acquisition

LeGath, Nicholson, Tavern League, Dickert

18 U.S.C. § 1962(c) conduct

Dickert

18 U.S.C. § 1962(d) conspiracy

LeGath, Nicholson, Tavern League, Dickert, Kaplan,
Helding, M ozol, W isneski, M aack, Osterman, Jerger,
W ahlen, Levine

KHAMPANE/NUEAKEAW CLAIMS
TYPE OF CLAIM

DEFENDANTS

18 U.S.C. § 1962(b) acquisition

LeGath, Nicholson, Tavern League, Dickert

18 U.S.C. § 1962(c) conduct

Dickert

18 U.S.C. § 1962(d) conspiracy

LeGath, Nicholson, Tavern League, Dickert, Kaplan,
Helding, M ozol, W isneski, M aack, Osterman, Jerger,
W ahlen

Page 20 of 36

The defendants argue that all of these claims should be dismissed. The
Court will address each group of defendants’ arguments, beginning with the
Municipal Defendants’.
2.2.1.1 Municipal Defendants
As already noted, the Municipal Defendants’ motion to dismiss is the
primary motion before the Court. Though there are multiple RICO
provisions at issue—18 U.S.C. §§ 1962(b), 1962(c), 1962(d)—the Municipal
Defendants attack the plaintiffs’ claims under each provision in related ways.
To begin with, the Court notes that the plaintiffs’ 18 U.S.C. § 1962(d)
claims rest entirely on the existence of their 18 U.S.C. §§ 1962(b) and 1962(c)
claims. That is because the Court cannot find a violation of 18 U.S.C.
§ 1962(d) without a separate violation of 18 U.S.C. §§ 1962(b) or 1962(c). So,
the Municipal Defendants focus primarily on undermining the plaintiffs’ 18
U.S.C. §§ 1962(b) and 1962(c) claims. Their efforts in that regard are threefold.
2.2.1.1.1 Causation
First, they attack the plaintiffs’ amended complaint for not adequately
alleging causation. (Docket #71 at 13–26; Docket #86 at 3–10). To state a RICO
claim, a “plaintiff must allege that ‘an injury to [his] business or property
resulte[ed] from the underlying acts of racketeering.’” Empress Casino v. Joliet
Corp. v. Johnston, 763 F.3d 723, 728–29 (7th Cir. 2014) (alterations in original)
(quoting Haroco, Inc. v. Amer. Nat’l B & T Co. of Chi., 747 F.2d 384, 398 (7th Cir.
1984); citing 18 U.S.C. § 1964(c)). “Under RICO, the plaintiff ‘can only recover
to the extent that [ ]he has been injured in his business or property by the
conduct constituting the violation.’” Empress Casino, 763 F.3d at 729
(alterations in original) (quoting Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S.
479, 496 (1985)). This causation requirement—essentially proximate cause—is

Page 21 of 36

the same for both RICO and antitrust cases, and focuses “‘on the directness
of the relationship between the defendant’s alleged conduct and the harm.’”
Empress Casino, 763 F.3d at 729 (quoting Hemi Grp., LLC v. City of New York,
N.Y., 559 U.S. 1, 12 (2010); citing 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 v. Sec. Inv. Prot. Corp., 503 U.S.
258, 267–68 (1992) (RICO requires “some direct relation between the injury
asserted and the injurious conduct alleged”).
The Seventh Circuit recently decided Empress Casino, which dealt
directly with the issue of proximate cause at the summary judgment stage of
RICO proceedings. See Empress Casino, 763 F.3d at 727–730. The Empress
Casino court considered two separate pieces of legislation—the ‘06 Act and
the ‘08 Act—to determine whether RICO activities by Illinois’ former
governor caused those pieces of legislation to pass and, hence, proximately
caused the Empress Casino plaintiffs’ damages.
In examining the ‘06 Act, the Empress Casino court determined that the
plaintiffs had “not pointed to evidence that would allow a factfinder to
conclude that the [defendants’] alleged bribery scheme cause the legislature
to pass,” a piece of legislation that negatively affected the plaintiffs. Id. at 729.
Likewise, the plaintiffs had not shown “evidence that the [allegedly corrupt]
governor agreed to exert improper influence over state legislators in order
to win their support,” of the legislation. Id. (citing McCutcheon v. Fed. Election
Comm’n, --- U.S. ----, 134 S.Ct. 1434, 1450 (2014) (“[W]hile preventing
corruption or its appearance is a legitimate objective, Congress may target
only a specific type of corruption—‘quid pro quo’ corruption.”). Meanwhile,
a finding of causation was not supported by the admissible evidence—which
fell somewhere on the spectrum between corrupt threats to induce votes and
Page 22 of 36

“simple logrolling.” Empress Casino, 763 F.3d at 730 (certain inadmissible
evidence may have gone to corruption, but the Seventh Circuit brushed it
aside with little discussion). The Seventh Circuit accepted that “in an
appropriate case, a ‘finding that bribery of a [government official]
proximately caused a plaintiff’s injury can [ ] rest on evidence of that
individual’s influence over the proceedings.’” Id. at 730 (quoting Bieter Co. v.
Blomquist, 987 F.2d 1319, 1327 (8th Cir. 1993)). But, at least as to the ‘06 Act,
there was no evidence of bribery or of the legislators voting as a bloc at the
governor’s behest, and so RICO causation was not present. 763 F.3d at 730.
The ‘08 Act was an entirely different story. In that instance, there was
clear evidence that the defendants had agreed to provide $100,000.00 to the
governor in exchange for his support of the ‘08 Act. Id. at 731. In turn, the
governor’s “signature on the bill caused the ‘08 Act to become law.” Id. at
732.
Unlike the allegation that the [defendants] bribed the governor
to persuade the 150-member legislature to enact the bill, the ‘08
Act became law as a direct result of the alleged agreement to
trade money for one person’s action—the governor’s signature.
A jury could find that the causal chain between the
[defendants’] bribe and the governor’s signing of the bill was
not broken by any intervening acts of third parties.
Id. The Empress Casino court surveyed Supreme Court case law on the topic
and concluded that the plaintiffs’ evidence was sufficient to escape summary
judgment. Id. at 732–34 (citing Lexmark Int’l, Inc. v. Static Control Components,
Inc., --- U.S. ----, 134 S. Ct. 1377, 1387 (2014); Holmes, 503 U.S. at 266; Hemi
Grp., 559 U.S. at 4, 10, 11; Anza, 547 U.S. at 454–55, 58; S. Pac. Co. v. Darnell
Taenzer Lumber Co., 245 U.S. 531, 533 (1918)). The plaintiffs “suffered the only
injury resulting from” the alleged RICO activity. Empress Casino, 763 F.3d

Page 23 of 36

at734.14 Accordingly, there was evidence of proximate cause between the
alleged RICO activity and the plaintiffs’ injury.
To be sure, Empress Casino differs slightly from this case in its posture:
Empress Casino was decided at summary judgment and on the basis of lack
of evidence, see 763 F.3d at 729–730; this case, on the other hand, comes
before the Court on motions to dismiss under Rule 12(b)(6) of the Federal
Rules of Civil Procedure, and without any real evidence before the Court.
Nonetheless, Empress Casino is instructive as to the components of RICO
causation: “‘a direct relation between the injury asserted and the injurious
conduct alleged.’” Id. at 735 (quoting Bridge v. Phx. Bond & Indem. Co., 553
U.S. 639, 654–55 (2008)). From the Seventh Circuit’s differentiation between
the ‘06 Act and the ‘08 Act, it is also clear that the Court cannot find
proximate cause where the RICO activity could not have brought about the
injury in question. See Empress Casino, 763 F.3d at 729–735 (where evidence
did not support any influence over ‘06 Act by governor, there was not
proximate causation; where evidence established some influence over ‘08
Act, there was proximate causation). As to the difference in posture between
Empress Casino and this case, the Court must simply be sure that it is
applying the Twombly/Iqbal plausibility standard, instead of looking for
evidence, as the Empress Casino court was required to do at the summary
judgment stage.
So, the question before the Court on causation is whether the
plaintiffs’ Amended Complaint alleges facts that plausibly establish
causation. It clearly does. The plaintiffs’ alleged injuries—fines, side

14

The Seventh Circuit also discussed the fact that the Empress Casino
plaintiffs had not sued as taxpayers; nor do the plaintiffs in the immediate case, so
that analysis is not relevant.

Page 24 of 36

agreements, license revocations, and voluntary license revocations resulting
from the burdensome fines and side agreements—are directly related to the
RICO predicate acts.15 The plaintiffs have alleged a general scheme in which
Dickert accepted bribes from defendants and others; he thereafter: (1) made
appointments to the Licensing Committee that would bow to his interests
(and removed unfriendly appointees); and (2) exerted control over the Police
Department to target the plaintiffs’ businesses. In control of both the
Licensing Committee and police, Dickert and his Financiers (LeGath,
Nicholson, and the Tavern League) ensured that the plaintiffs’ businesses
were targeted and suffered financial burdens, resulting in revocation. Just as
the governor in Empress Casino did not have total control over passage of the
‘08 Act, Dickert and his Financiers did not have total control16 here; but the
allegations, if proved, would still be sufficient to establish RICO causation,
because there is a direct relation between the activity and the injury and the
injury is the one resulting from the alleged RICO activity. See Empress Casino,

15

The Court will discuss the sufficiency of the allegations relating to the
RICO predicate acts, but assumes arguendo for this portion of the discussion that
they are sufficiently pled.
16

And, as to 18 U.S.C. § 1962(b), control under that statute need not rise to
the level of formal control; all that is necessary is that “Plaintiffs must allege that
Defendants agreed to manipulate Plaintiffs’ activities through predicate acts which
would cause Plaintiffs to make decisions it would not have otherwise made.” Titan
Intern., Inc. v. Becker, 189 F. Supp. 2d 817, 830 (C.D. Ill. 2001) (citing Sutliff, Inc v.
Donovan Cos., Inc., 727 F.2d 648, 653 (7th Cir. 1984); Ikuno v. Yip, 912 F.2d 306, 310
(9th Cir. 1990)). There, of course, remain additional questions about this form of
liability (including whether the defendants could have obtained an “interest” under
18 U.S.C. § 1962(b)), and it is quite possible that these claims will be dismissed at
some point for lack of “interest.” But, because the Court ultimately determines that
this matter must proceed to discovery, and 18 U.S.C. § 1962(b) discovery and
defendants will be co-extensive with the other RICO discovery, the Court will not
dismiss the 18 U.S.C. § 1962(b) claims at this juncture.

Page 25 of 36

763 F.3d at 731–34 (detailing the governor’s lack of total control over passage
of legislation but ultimately finding proximate cause). Indeed, according to
the plaintiffs’ theory, this was the precise object of the scheme.
Accordingly, the Court finds that the plaintiffs have adequately
pleaded RICO causation.
2.2.1.1.2 Predicate Acts
Second, the Municipal Defendants argue that the plaintiffs have not
adequately alleged predicate acts. While 18 U.S.C. §§ 1962(b), 1962(c), and
1962(d) each have distinct elements, they all require the existence of a
“pattern of racketeering activity.” See 18 U.S.C. §§ 1962(b–d) (the terms of
subsection (d) may not specifically mention a pattern requirement, but in
requiring a violation of subsection (a), (b) or (c), it effectively imports those
sections’ pattern requirement). A pattern of racketeering activity requires at
least two “predicate acts” of racketeering activity. 18 U.S.C. § 1961(5). This
means that the plaintiffs have to have pleaded at least two “act[s] or threat[s]
involving…” racketeering activity, as enumerated in 18 U.S.C. § 1961(1), in
order to state a claim under 18 U.S.C. §§ 1962(b), 1962(c), and 1962(d). See,
e.g., 18 U.S.C. §§ 1961(1, 5), 1962(b–d); DeGuelle v. Camilli, 664 F.3d 192, 199
(7th Cir. 2011).
The plaintiffs have attempted to comply with this requirement by
alleging violations of various Wisconsin and United States statutes that they
assert would qualify as racketeering activity under 18 U.S.C. § 1961(1). The
Municipal Defendants disagree.
The first area of disagreement comes with the plaintiffs’ assertion that
the RICO defendants’ activities violated Wis. Stat. § 946.10 and/or 18 U.S.C.
§§ 201(b–c). (Docket #71 at 27–31). A violation of Wis. Stat. § 946.10, which
prohibits bribery, would certainly qualify as a RICO predicate act, see 18
Page 26 of 36

U.S.C. § 1961(1)(A)(“‘racketeering activity’ means…any act or threat…
involving…bribery…which is chargeable under State law and punishable by
imprisonment for more than one year), as would a violation of 18 U.S.C.
§ 201, seeing as that latter statute is explicitly listed as racketeering activity.
So, if the plaintiffs have adequately pled violations of either of those statutes,
then they have sufficiently pleaded predicate acts.
Unfortunately for the plaintiffs, 18 U.S.C. § 201 does not cover the
situation in this case, because no one in this case “occupie[d] a position of
public trust with official federal responsibilities,” and nothing involved
federal duties. E.g., Dixson v. United States, 465 U.S. 482, 496 (1984); 18 U.S.C.
§ 201(a)(1).
The plaintiffs have adequately alleged Wis. Stat. § 946.10 violations,
though. The Municipal Defendants argue that the plaintiffs fail to plead
sufficient bribery allegations. They are simply incorrect: the plaintiffs allege
that various individuals, including Nicholson and LeGath, on behalf of the
Tavern League, made payments to Dickert for the express purpose of
ensuring that minority bar owners would be targeted. (E.g., Am. Compl.
¶¶ 235, 249). Dickert, in turn, appointed (or re-appointed) Licensing
Committee members who would participate in this scheme, discouraging any
dissent. (E.g., Am. Compl. ¶¶ 243, 250). These allegations plausibly state a

Page 27 of 36

violation of Wis. Stat. § 946.10, and so constitute RICO predicate acts, which
is enough to allow the RICO claims to proceed.17
2.2.1.1.3 Continuity
Third, the Municipal Defendants argue that the alleged predicate acts
do not satisfy RICO’s continuity requirement. “[T]he continuity requirement
exists to give effect to Congress’ clear intention that RICO target long-term
criminal behavior…, as opposed to more discrete acts of fraud.” Jennings v.
Auto Meter Products, Inc., 495 F.3d 466, 473 (7th Cir. 2007) (citing H.J., Inc. v.
Northwestern Bell Tel. Co., 492 U.S. 229, 242 (1989)). Continuity can be closedor open-ended. DeGuelle, 664 F.3d at 199 (citing 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
(citing Jennings v. Auto Meter Prods., Inc., 495 F.3d 466, 473 (7th Cir. 2007)).

17

The parties engage in substantial discussion of the plaintiffs’ allegations
of “honest services” fraud and wire fraud; those would also constitute appropriate
allegations of RICO predicate acts, given the allegations concerning bribery and use
of the mail, telephones, and other wire services. See, e.g., Huff v. First Energy Corp.,
972 F. Supp. 2d 1018, 1034 (N.D. Ohio 2013) ("claim of honest-services fraud must
allege the fraudulent deprivation of honest services through a bribery…scheme";
bribery scheme is present here). (See, e.g., Am. Compl. ¶ 252).
On the other hand, the alleged extortion of other business people,
purportedly executed by Osterman (Am. Compl. ¶¶ 250(a–c)), is not predicate to
the plaintiffs’ RICO claims. Those acts were not “related” to the alleged RICO
scheme against the plaintiff—they involved other victims, who it is not clear were
white, and in one case did not result in the closure of a business; moreover, the acts
were committed by Osterman who has little other role in the alleged scheme and
involved direct demands for bribes, which is not alleged to have happened to the
plaintiffs. (See, e.g., Am. Compl. ¶¶ 250(a–c)). Thus, there would seem to be
different purposes, results, victims, perpetrators, and methods of commission,
meaning the extortion acts are not “related” and cannot be treated as predicate acts.
See H.J., Inc., 492 U.S. at 237–38.

Page 28 of 36

Open-ended continuity involves “a course of criminal activity which lacks
the duration and repetition to establish continuity,” but “by its nature
projects into the future with a threat of repetition.” Midwest Grinding Co., Inc.
v. Spitz, 976 F.2d 1016, 1019 (7th Cir. 1992) (citing H.J., Inc., 492 U.S. at 242).
At the very least, there is open-ended continuity, here. Dickert
remains mayor, and many of the other actors continue to be involved in
Racine politics. Moreover, the alleged scheme is allegedly continuing to
produce fruit: in recent months, Nicholson received a liquor license that had
previously been denied to minority applicants, has received various grants
from the City, and has not been called in front of the Licensing Committee
despite incidents at his bars. (See Am. Compl. ¶ 254). Dickert and the other
actors allegedly engaged in racketeering activity over the course of two
mayoral terms, and the scheme allegedly continues to this day. This comes
within the ambit of Congress’ intent to prevent long-term criminal behavior,
and so the Court is obliged to find that open-ended continuity is adequately
pled.
2.2.1.1.4

Conclusion on Municipal
Defendants’ RICO Arguments

Having disagreed with each of the Municipal Defendants’ arguments
in favor of dismissal of the RICO claims, the Court is obliged to deny the
Municipal Defendants’ motion in that regard.
2.2.1.2

Political Staff Defendants

Together, the Political Staff Defendants—Osterman, Jerger, and
Nicholson—argue that the 18 U.S.C. § 1962(d) claims against them should be
dismissed. To state a claim under 18 U.S.C. § 1962(d), the plaintiffs must
allege “that (1) the defendant[s] agreed to maintain an interest in or control
of an enterprise or to participate in the affairs of an enterprise through a
Page 29 of 36

pattern of racketeering activity, and (2) the defendant[s] further agreed that
someone would commit at least two predicate acts to accomplish these
goals.” DeGuelle, 664 F.3d at 204. “[T]he touchstone of liability under
§ 1962(d) is an agreement to participate in an endeavor which, if completed,
would constitute a violation of the substantive statute.” Goren v. New Vision
Int’l, Inc., 156 F.3d 721, 732 (7th Cir. 1998). “A conspiracy to violate RICO
may be shown by proof that the defendant, by his words or actions,
objectively manifested an agreement to participate, directly or indirectly, in
the affairs of an enterprise, through the commission of two or more predicate
crimes.” Roger Whitmore’s Auto Servs., Inc. v. Lake Cty., Ill., 424 F.3d 659, 674
(7th Cir. 2005). Under DeGuelle, the Court notes that it can “infer[ ] from the
facts of the complaint…that [defendants’] actions…were part of the original
conspirators’ agreement.” 664 F.3d at 206.
The Court agrees with the Political Staff Defendants that the plaintiffs
have not sufficiently pled those two elements as to Osterman and Jerger. As
to Osterman, there are only conclusory allegations that he agreed to join the
enterprise, but those allegations seem to be based entirely on his alleged
participation in activities that the Court found were not RICO predicate acts
in footnote 17, supra. (See, e.g., Am. Compl. ¶¶ 250(a–c), 289, 290, 349, 350,
399, 400). The Court, therefore, finds that it would be inappropriate to infer
an agreement against him. The allegations of an agreement against Jerger are
even weaker. Her only involvement was as Dickert’s treasurer, allegedly
filing campaign finance statements that were reported to her by another
individual. (Am. Compl. ¶¶ 249(f, h), 296, 356, 406). She had a duty to file
those statements and there is no indication or allegation that she had any

Page 30 of 36

idea that anything included in those reports was incorrect. So, the Court also
cannot infer an agreement as against her.18
Nicholson, on the other hand, is alleged to have paid bribes to Dickert
in exchange for favorable action. That is a direct part of the alleged RICO
scheme, and so the Court can infer that he agreed to participate therein. As
such, the Court cannot dismiss the 18 U.S.C. § 1962(d) claim against him.
Likewise, the Court cannot dismiss the 18 U.S.C. § 1962(b) claim
against him. In discussing the Municipal Defendants’ arguments, supra, the
Court largely addressed his arguments in favor of dismissing that claim
(predicate acts, causation). Those arguments do not form the basis for
dismissal.
Accordingly, the Court will grant in part the Political Staff
Defendants’ motion to dismiss, insofar as it seeks dismissal of Osterman and
Jerger, and deny it in part, insofar as it seeks dismissal of Nicholson.
2.2.1.3 Sutherland
The Court begins by pointing out that Sutherland is separately
represented as a Municipal Defendant. Moreover, Downtown Racine
Corporation, which Sutherland directed, is no longer a defendant in this case.
Therefore, it was not necessary for Sutherland to file an extra motion and
corresponding set of briefs. Nonetheless, the Court accepts those documents
and has reviewed them.
There is only one claim remaining against Sutherland: an 18 U.S.C.
§ 1962(d) claim asserted against him by Holmes. There is absolutely nothing
alleged in the Amended Complaint that would establish that Sutherland

18

If discovery proves differently, the Court will reconsider this decision
upon motion and submission of evidence by the plaintiffs.

Page 31 of 36

participated in any of the predicate acts. (See, e.g., Am. Compl. ¶¶ 244, 250(h),
309–315). Nor is there any indication that he agreed to participate in the
conspiracy. (See, e.g., Am. Compl. ¶¶ 244, 250(h), 309–315). At most, he
approved surveillance of Holmes’ bar and secured the participation of
community members in a hearing against Holmes’ bar. (See, e.g., Am. Compl.
¶¶ 244, 250(h), 309–315). But there is no indication that he performed these
activities as part of the alleged RICO scheme. (See, e.g., Am. Compl. ¶¶ 244,
250(h), 309–315). Simply put, there is no basis to find or infer an agreement
on Sutherland’s behalf.19
Accordingly, the Court will grant Sutherland’s separate motion to
dismiss, and dismiss the plaintiffs’ complaints against Sutherland.
2.2.1.4 Tavern League
The Tavern League argues that the Court must dismiss the claims
against it, because the plaintiffs have not alleged that the Tavern League,
itself, participated in any RICO activity.
The Tavern League is correct. To find a corporation liable, the Court
must find that the Tavern League, itself, took some action. See, e.g., SK Hand
Tool Corp. v. Dresser Indus. Inc., 852 F.2d 936, 941 (7th Cir. 1988) (corporation
“cannot be held vicariously liable under RICO for the independent acts of its
employees.”); see also Kovian v. Fulton Cty. Nat. Bank & Trust Co., 100
F. Supp. 2d 129, 133 (N.D.N.Y. 2000) (“As courts have noted, plaintiffs face
a substantial burden, as ‘vicarious liability has been held to be at odds with
Congressional intent in enacting RICO [because] the statute was designed to
protect corporations from criminal infiltration rather than hold them liable.’”)

19

Again, if discovery proves differently, the Court will reconsider this
decision upon motion and submission of evidence by the plaintiffs.

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(quoting Qatar Nat'l. Navigation & Transp. Co. Ltd. v. Citibank, N.A., No. 89CV-464, 1992 WL 276565, at *7 (S.D.N.Y. Sep. 29, 1992) (citations omitted);
citing Schmidt v. Fleet Bank, 16 F. Supp. 2d 340, 351 (S.D.N.Y. 1998)). That is,
“[i]t is clear that liability under RICO is limited to persons who have
‘personally committed’ at least two predicate acts of racketeering.” Emery v.
American General Finance, Inc., 938 F. Supp. 495, 499 (N.D. Ill. 1996) (citing
Dudley Enterprises, Inc. v. Palmer Corp., 822 F. Supp. 496, 502 (N.D. Ill. 1993)).
Thus, the Court looks to find some alleged activity by the Tavern
League. Here, there is none. Indeed, there is no allegation that LeGath was
acting as the Tavern League’s agent or that his activities had been authorized
by the Tavern League. The unnamed individuals who paid small bribes to
Dickert’s finance director all attributed the bribes to LeGath “as President
and/or Director of the Tavern League.” Aside from it being extremely
unlikely that those individuals would have been so specific about LeGath’s
capacity when providing the bribes, these allegations simply do not show
any activity by the Tavern League. The Tavern League’s organizational
structure is not pled, so the Court cannot know—even if LeGath had directed
the bribes as president of the organization—whether he was actually acting
on the organization’s behalf or whether his activity was ultra vires. None of
the allegations plausibly allege that the Tavern League took any action, itself,
through LeGath or any other individuals. There is no reason to find that the
Tavern League “personally committed” any racketeering activities or agreed
to participate in a RICO scheme.20

20

Again, if discovery proves differently, the Court will reconsider this
decision upon motion and submission of evidence by the plaintiffs.

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For these reasons, the Court is obliged to grant the Tavern League’s
motion to dismiss, and dismiss the plaintiffs’ claims against the Tavern
League.
2.2.2

Jones’ 42 U.S.C. § 1983 Claims

The Municipal defendants also argue that Jones’ 42 U.S.C. § 1983
claims against Helding and Maack must be dismissed. In support, they argue
that Jones was not subject to any activity beyond general calls before the
Licensing Committee during Helding’s and Maack’s tenure. (See Docket #86
at 26). Thus, Jones was treated in the same way as the other white individuals
who were called before the Licensing Committee. (See Docket #86 at 26).
This may ultimately prove to be the case, but the Court will not
dismiss Jones’ claims at this stage. He alleges that he was called before the
Licensing Committee on ten separate occasions; perhaps this number was far
above the number of times any white individuals were called before the
Licensing Committee, and was intended to harass Mr. Jones. This could
plausibly state a claim for relief, and so the Court declines to dismiss the
claims.
For that reason, the Court will deny the Municipal Defendants’ motion
to dismiss Jones’ 42 U.S.C. § 1983 claims against Helding and Maack.
3.

CONCLUSION
In sum, the Court will dismiss the plaintiffs’ 42 U.S.C. § 1985(3) claims,

because the plaintiffs have agreed to their dismissal. Likewise, the Court will
dismiss Khampane and Nueakeaw’s 42 U.S.C. § 1983 claim against Helding,
pursuant to the plaintiffs’ agreement.
The Court will deny the Municipal Defendants’ motion to dismiss the
RICO claims. While those claims may not be strong, they should proceed to
discovery. If the evidence does not establish support those claims, then the
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Court will certainly be prepared to dismiss them upon motion from the
parties. The Court will also deny the Municipal Defendants’ motion to
dismiss Jones’ 42 U.S.C. § 1983 claims against Helding and Maack.
The Court will grant in part and deny in part the Political Staff
Defendants’ motion to dismiss, dismissing the claims against Osterman and
Jerger but not the claims against Nicholson. The Court also grants
Sutherland’s and the Tavern League’s respective motions to dismiss.
This results in the Tavern League, Sutherland, Osterman, and Jerger
being dismissed from the action. The Court will also direct the Clerk of Court
to terminate Downtown Racine Corporation, Jeffrey Coe, and Cerafin
Davalos, given that the plaintiffs have not named those individuals in their
Amended Complaint.
This leaves only the Municipal Defendants (with the exception of
Sutherland) and Nicholson as defendants.
Accordingly,
IT IS ORDERED that, pursuant to the agreement of the plaintiffs
(Docket #82 at 1 n.1), the plaintiffs’ 42 U.S.C. § 1985(3) claims be and the same
are DISMISSED in their entirety, and Khampane’s and Nueakeaw’s 42
U.S.C. § 1983 claim against Helding be and the same is hereby DISMISSED;
IT IS FURTHER ORDERED that the Municipal Defendants’ motion
to dismiss the amended complaint (Docket #70) be and the same is hereby
DENIED;
IT IS FURTHER ORDERED that the Political Staff Defendants’
motion to dismiss the amended complaint (Docket #67) be and the same is
hereby GRANTED in part, insofar as the plaintiffs’ claims against Osterman
and Jerger are hereby DISMISSED, and DENIED in part, insofar as the
Court will allow the plaintiffs to proceed on their claims against Nicholson;
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IT IS FURTHER ORDERED that Sutherland’s motion to dismiss the
amended complaint (Docket #73) be and the same is hereby GRANTED and
the plaintiffs’ claims against Sutherland are hereby DISMISSED;
IT IS FURTHER ORDERED that the Tavern League’s motion to
dismiss the amended complaint (Docket #75) be and the same is hereby
GRANTED and the plaintiffs’ claims against the Tavern League are hereby
DISMISSED; and
IT IS FURTHER ORDERED that the Clerk of Court shall terminate
Downtown Racine Corporation, Jeffrey Coe, and Cerafin Davalos, as parties
in this action.
Dated at Milwaukee, Wisconsin, this 31st day of October, 2014.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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