The opinion of the court was delivered by: JAMES MORAN, Senior District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Gayler Cobbs brought this action against defendants
alleging that they unlawfully retaliated against her when she
refused to support defendant Michael Sheahan's re-election
campaign for Cook County Sheriff, in violation of her First
Amendment rights and the Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. §§ 1961-1968. Defendants seek
to dismiss plaintiff's action, arguing that she fails to state a
claim for relief. For the following reasons, defendants' motion
is granted in part and denied in part.
For purposes of defendants' motion to dismiss, the following
facts are viewed in plaintiff's favor. Jang v. A.M. Miller &
Assocs., 122 F.3d 480, 483 (7th Cir. 1997). Plaintiff began
working for the Cook County Sheriff's Department in 1985, and
rose through the ranks until July 11, 2001, when she was removed
from her position as the assistant director of the boot camp
program and assigned to the position of sergeant in the
Department of Corrections. Plaintiff believes that she was
demoted in retaliation for refusing to support defendant Citizens
for Sheahan, defendant Sheahan's political campaign committee.
She contends that sometime in early 2001 defendant Patrick Durkin, director of the boot camp
program, asked her to sell tickets for a fundraiser event, and
that defendant Thomas Dourdy, superintendent of that program,
asked her to buy fundraiser tickets, and that she refused both
requests. After she told Dourdy that she does not buy tickets,
Dourdy allegedly asked her, "where is your loyalty?" and told her
that the incident would not reflect well on her record. Plaintiff
then alleges that defendant James Ryan, director of operations at
the sheriff's department, ordered her demotion.
Seeking relief from the allegedly unlawful demotion, plaintiff
claimed that defendants violated section 1962(c) of RICO, her
right to contract under 42 U.S.C. § 1981, and her First Amendment
and equal protection rights under 42 U.S.C. § 1983. Defendants
sought to dismiss all counts, and in our memorandum opinion and
order dated April 14, 2004, we denied defendants' motion in its
entirety (Cobbs v. Sheahan, 319 F. Supp. 2d 865 (N.D. Ill.
2004)). Plaintiff then amended her complaint, adding counts under
§§ 1962(a) and (d) of RICO, and a count under 18 U.S.C. § 2 for
aiding and abetting violations of §§ 1962(a) and (c). She also
added class allegations, seeking to represent a class of
employees at the sheriff's department who refused to contribute
money or services to defendants and suffered negative
consequences. Plaintiff's amended complaint does not include the
right to contract and equal protection claims.
Defendants raise a host of arguments in support of their motion
to dismiss the amended complaint. First, they argue that
plaintiff lacks standing to bring the § 1962(a) claim because she
never made any campaign contributions and her injury does not
flow from defendants' investment of RICO income. They further
contend that plaintiff fails to state a § 1962(c) claim because
her injury was not caused by any predicate RICO activity.
Defendants argue that plaintiff has failed to show a pattern of racketeering activity
sufficient to support her RICO charges. Next, they argue that
there is no aiding and abetting liability for §§ 1962(a) and (c).
Defendants also assert that plaintiff's failure to state claims
under either § 1962(a) or (c) forecloses her § 1962(d) conspiracy
claim. Finally, defendants claim that plaintiff fails to state a
First Amendment retaliation claim.
A Rule 12(b)(6) motion to dismiss tests the sufficiency of the
complaint and not the merits of the case. General Electric
Capital Corp v. Lease Resolution Corp., 128 F.3d 1074, 1080
(7th Cir. 1997); Gibson v. City of Chicago, 910 F.2d 1510,
1520 (7th Cir. 1990). We accept plaintiff's factual
allegations as true and draw all reasonable inferences in her
favor. Leatherman v. Tarrant County Narcotics Intelligence &
Coordination Unit, 507 U.S. 163, 164 (1993); Travel All Over
the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1428
(7th Cir. 1996). A claim survives a motion to dismiss if
"relief is possible under any set of facts that could be
established consistent with the allegations" (Bartholet v.
Reishauer A.G., 953 F.2d 1073, 1078 (7th Cir. 1992)), and is
dismissed only if it appears beyond a doubt that there exist no
facts to support the allegations. Conley v. Gibson,
355 U.S. 41, 45-46 (1957).
The court concluded in its April 14, 2004, order that plaintiff
stated a § 1962(c) claim, and denied defendants' arguments to the
contrary. In addition to finding that plaintiff adequately
alleged that defendants played roles in an enterprise, we noted
that "the alleged demand for a political contribution in return
for a patronage job" constituted extortion, which § 1961 lists as
a predicate RICO act. Cobbs, 319 F. Supp. 2d at 869-70. We also
rejected defendants' arguments to dismiss the First Amendment
claim because there existed factual issues that exceeded the
scope of the motion to dismiss. We review these points because plaintiff strenuously argues that the law of the case doctrine
bars defendants' arguments. Under the law of the case doctrine,
"a ruling made in an earlier phase of a litigation controls the
later phases unless a good reason is shown to depart from it."
Tice v. Am. Airlines, Inc., 373 F.3d 851, 853 (7th Cir.
2004); see also Payne v. Churchich, 161 F.3d 1030, 1037 n. 8
(7th Cir. 1998). The doctrine is not the impenetrable
barrier, as portrayed by plaintiff, with respect to the new
arguments plaintiff has presented in her amended complaint. The
doctrine prevents the reopening of issues decided earlier in the
litigation (Christianson v. Colt Indus. Operating Corp.,
486 U.S. 800, 815-16 (1988)), but several issues regarding
plaintiff's new claims are outstanding. See Roboserve, Inc. v.
Kato Kagaku Co., 121 F.3d 1027, 1032 (7th Cir. 1997) ("Law
of the case is limited insofar as it applies only to issues that
were decided in the former proceeding but not to questions which
might have been decided but were not."). We first turn to
defendants' arguments against the § 1962(a) claim.
Section 1962(a) makes it unlawful "for any person who has
received any income derived, directly or indirectly, from a
pattern of racketeering activity or through collection of an
unlawful debt . . . to use or invest, directly or indirectly, any
part of such income, or the proceeds of such income, in
acquisition of any interest in, or the establishment or operation
of, any enterprise which is engaged in, or the activities of
which affect, interstate or foreign commerce." Defendants argue
that plaintiff cannot raise the § 1962(a) claim because she
neither bought nor sold campaign fundraiser tickets. They base
that argument on the investment injury rule, which states that
"the use or investment of the racketeering income must
proximately cause the plaintiff's injury; injury caused by the
predicate racketeering acts is inadequate." Vicom, Inc. v.
Harbridge Merchant Servs., Inc., 20 F.3d 771, 778 n. 6 (7th
Cir. 1994). See also Vemco, Inc. v. Camardella, 23 F.3d 129, 132
(6th Cir. 1994) ("to state a claim under § 1962(a), a
plaintiff must plead a specific injury to the plaintiff caused by
the investment of income into the racketeering enterprise,
distinct from any injuries caused by the predicate acts of
racketeering."). In response, plaintiff asserts that her refusal
to join the enterprise led to her demotion and loss of money in
the form of reduced salary. Plaintiff also highlights sections of
the April 14, 2004, order in which the court found that plaintiff
adequately alleged that defendants attempted to obtain money from
Initially, defendants' interpretation of § 1962(a) improperly
narrows the scope of the statute because the fact that plaintiff
refused to buy and sell fundraiser tickets does not preclude her
from suing under that section. Section 1962(a) specifies that
income used or invested by an enterprise must be derived from
illegal racketeering activity or the collection of an unlawful
debt. The statute is silent as to the source of the income, and
it does not grant standing only to those who actually provide
income to a RICO enterprise. Indeed, it is the civil remedies
section of RICO that provides standing to "any person injured in
his business or property by reason of a violation of section
1962." 18 U.S.C. § 1964(c). Thus, standing to sue depends on the
injury caused by an enterprise's use or investment of the income,
and not by the plaintiff's investment of that income into a
defendant's enterprise. It is true, as defendants emphasize, that
in many cases arising under § 1962(a) the defendant dupes the
plaintiff into investing money in the defendant's organization,
but that common scenario is not invariably the case. See, e.g.,
Ideal Steel Supply Corp. v. Anza, 373 F.3d 251 (2d Cir. 2004).
Further illustrating why the injury and not the investment is
key, is the fact that even when the plaintiff supplies the income
no actionable § 1962(a) claim lies unless the plaintiff is
injured as a result of the defendant's use of that income.
Ultimately, defendants' construction of § 1962(a) finds no support in the plain language of the statute,
and it also unnecessarily constricts scope of the statute. See
Morgan v. Bank of Waukegan, 804 F.2d 970, 974 (7th Cir.
1986) (noting that the court of appeals "has consistently held
that RICO must be given the broad effect mandated by its plain
Having cleared the first hurdle set by defendants, plaintiff
now faces a more formidable obstacle in the form of the
investment injury rule. As discussed above, to state a § 1962(a)
claim plaintiff must allege that her injury was caused by
defendants' use or investment of income derived from racketeering
activity, and she cannot merely claim harm caused by predicate
racketeering acts. The Seventh Circuit has not adopted the
investment injury rule, but, in Vicom, the court expressed
accord with the majority of circuits that have adopted the
rule.*fn1 See Vicom, 20 F.3d at 778 n. 6. Following
Vicom, district courts in the Seventh Circuit have applied the
investment injury rule and have required the investment of income
to cause a plaintiff's injuries. See, e.g., Bd. of Trs. v.
Nationwide Life Ins. Co., 2005 U.S. Dist. LEXIS 6159, *22, 2005
WL 711977 (N.D. Ill. 2005); Vega v. Contract Cleaning Maint.,
Inc., 2004 U.S. Dist. LEXIS 20949, *40-42, 2004 WL 2358274 (N.D.
Ill. 2004); Carnegie v. Household Int'l, Inc., 220 F.R.D. 542,
546 (N.D. Ill. 2004) (stating that § 1962(a) "covers injuries
which are caused by the use or investment of racketeering
income"); Xinos v. Kappos, 270 F. Supp. 2d 1027, 1031 (N.D.
Ill. 2003) ("a plaintiff bringing a claim under Section 1962(a)
must allege that he was injured from the defendants' use or
investment of income that they derived from racketeering
activity"; Shapo v. O'Shaughnessy, 246 F. Supp. 2d 935, 965
(N.D. Ill. 2002) (collecting cases). Indeed, we have already
accepted the rule (Pinski v. Adelman, 1995 U.S. Dist. LEXIS 16550, *27-30, 1995 WL 669101, *8-9 (N.D. Ill.
1995)), and see no reason to change course.
Plaintiff fails to allege any injury caused by defendants'
investment or use of income derived from racketeering activity.
Plaintiff does state that she and the putative class members were
injured by both defendants' predicate racketeering acts and their
investment and reinvestment of income derived from those acts
into the enterprise (plf. cplt. ¶ 93). That statement suggests a
distinct investment injury, but plaintiff then submarines her §
1962(a) claim when she attributes her injury to the underlying
predicate act of extortion, claiming that she was demoted "for
failing to succumb to or comply with the demands of Sheahan's
Political Enterprise, which constitute an illegal extortionate
political campaign contribution scheme" (id. at ¶ 94). The
alleged extortion is a predicate racketeering act, not a §
1962(a) injury. Moreover, plaintiff's contention that defendants
used the investment income to support the enterprise ...