IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
March 4, 2011
GARY ENGEL, PLAINTIFF,
ROBERT BUCHAN, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Milton I. Shadur Senior United States District Judge
MEMORANDUM OPINION AND ORDER
Gary Engel ("Engel") has sued former FBI
Agent Robert Buchan ("Buchan") and former Village of Buffalo Grove
("Village") Police Officer Robert Quid ("Quid"), charging each of them
with violations of state and federal law*fn1 following
Engel's release in 2010 after 19 years of incarceration. In response
Buchan and Quid have filed partial motions to dismiss Engel's claims
based on Brady and on the Racketeer Influenced and Corrupt
Organizations Act ("RICO"), and Buchan has also sought to cloak
himself in the protective mantle of qualified immunity.*fn2
For the reasons set out hereafter, both motions (1) are
denied as to
Engel's Brady-based claim, with respect to which Buchan is not
entitled to qualified immunity, and (2) are granted as to Engel's RICO
claims.*fn3 Fed. R. Civ. P. ("Rule") 12(b)(6) Standard
Under Rule 12(b)(6) a party may seek dismissal of a complaint for
"failure to state a claim upon which relief can be granted." Bell Atl.
Corp. v. Twombly, 550 U.S. 544 (2007) did away with the formulation
first announced in Conley v. Gibson, 355 U.S. 41, 45-46 (1957) "that a
complaint should not be dismissed for failure to state a claim unless
it appears beyond doubt that the plaintiff can prove no set of facts
in support of his claim which would entitle him to relief." As
Twombly, 550 U.S. at 562-63 put it:
Conley's "no set of facts" language has been questioned, criticized, and explained away long enough. To be fair to the Conley Court, the passage should be understood in light of the opinion's preceding summary of the complaint's concrete allegations, which the Court quite reasonably understood as amply stating a claim for relief. But the passage so often quoted fails to mention this understanding on the part of the Court, and after puzzling the profession for 50 years, this famous observation has earned its retirement. Twombly, id. at 570 held instead that a complaint must provide "only enough facts to state a claim to relief that is plausible on its face." Or put otherwise, "[f]actual allegations must be enough to raise a right to relief above the speculative level" (id. at 555).
But almost immediately thereafter the Supreme Court issued another opinion that seemed to cabin Twombly somewhat. Airborne Beepers & Video, Inc. v. AT & T Mobility LLC, 499 F.3d 663, 667 (7th Cir. 2007) has explained that further development:
Two weeks later the Court clarified that Twombly did not signal a switch to fact-pleading in the federal courts. See Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007). To the contrary, Erickson reaffirmed that under Rule 8 "[s]pecific facts are not necessary; the statement need only 'give the defendant fair notice of what the...claim is and the grounds upon which it rests.'" 127 S.Ct. at 2200, quoting Twombly, 127 S.Ct. at 1964. Taking Erickson and Twombly together, we understand the Court to be saying only that at some point the factual detail in a complaint may be so sketchy that the complaint does not provide the type of notice of the claim to which the defendant is entitled under Rule 8.
It is on those terms that the familiar Rule 12(b)(6) principles still require the district court to accept as true all of plaintiff's well-pleaded factual allegations, drawing all reasonable inferences in plaintiff's favor (Christensen v. County of Boone, 483 F.3d 454, 457 (7th Cir.2007)(per curiam)).*fn4
Engel's ordeal began when Buchan and Quid initiated a murder investigation involving Engel's friend Steve Manning, a former Chicago police officer (¶¶10, 11). Although that initial investigation led nowhere, defendants built cases against Manning for another murder--that of James Pellegrino---and for the Missouri kidnaping of two drug dealers (¶¶12, 13, 15).
Manning was ultimately convicted of murder in Illinois and kidnaping in Missouri (¶24). Defendants, believing that Engel had participated in the Missouri kidnaping, had attempted to secure Engel's cooperation in securing that conviction (¶¶17-20). When Engel disclaimed all involvement and refused to cooperate (¶¶19-21), defendants brought kidnaping charges against Engel, which led to his conviction by a Missouri jury and a 90-year prison sentence (¶22).
After he had spent a decade in prison, Manning's Illinois murder conviction was overturned in 1998, and in 2002 the Court of Appeals for the Eighth Circuit threw out his Missouri kidnaping conviction (¶25). Manning was released after neither state sought to retry him (id.), and he then brought civil rights claims in this District Court against Buchan, Quid, Village and an additional FBI agent (¶26). In that action, assigned to this Court's colleague Honorable Matthew Kennelly, Manning asserted a Brady-based claim against Buchan under the auspices of Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971) and joined the United States as a defendant under the Federal Tort Claims Act ("FTCA") (¶29).
Judge Kennelly held that Buchan was not entitled to qualified immunity on the Brady-based claim, and that decision was then affirmed in Manning v. Miller, 355 F.3d 1028, 1035 (7th Cir. 2004) ("Manning I"). In late 2004 Manning tried his Brady-based claims to a jury, leaving his tort claims against the United States to be decided by Judge Kennelly (¶31). Manning received an over $6.5 million jury verdict on his constitutional claims against all defendants (¶32). In a significant reversal of fortune, however, Judge Kennelly ruled against Manning on his FTCA claims and found that decision compelled the setting aside of the jury verdict (¶¶34-36).*fn6
Engel had evidently kept abreast of Manning's civil rights suit, for he filed a habeas corpus petition based on the evidence of law enforcement misconduct adduced during Manning's federal trial (¶39). In February 2010 the Missouri Supreme Court vacated Engel's conviction on the ground that Buchan and Quid had committed Brady violations in withholding exculpatory evidence (see State ex rel. Engel v. Dormire, 304 S.W.3d 120, 129 (Mo. 2010)(en banc)). Engel then filed this action in May 2010.
In late 2010 Buchan made it known that he would refuse to answer discovery until there was a ruling (and potentially an appeal) on his entitlement to qualified immunity. On October 21, 2010 this Court granted Engel's motion to compel Buchan to answer the discovery requests as to the non-RICO claims. Buchan then moved to stay proceedings while he appealed what he labeled the "effective denial" of qualified immunity on the Brady claim. On December 3, 2010 this Court certified the appeal as frivolous and denied the motion to stay proceedings on the ground that Manning I had earlier denied Buchan qualified immunity for nearly identical misconduct on the Brady claims. On December 21, 2010 the Court of Appeals dismissed Buchan's appeal on the basis that it lacked jurisdiction. With all the pieces in place, and with the case having returned to this Court's docket after its brief sojourn to the Court of Appeals, the relevant portions of defendants' motions to dismiss are now ripe for decision.
Buchan asserts that a remedy under Bivens should not be "extended" to violations of a right to a fair trial under Brady. But that contention cannot be squared with precedent from both the Supreme Court and our Court of Appeals.
As for the Supreme Court, Davis v. Passman, 442 U.S. 228 (1979) relied on Bivens in expressly recognizing a cause of action and a damages remedy for violations of the Fifth Amendment's Due Process Clause.
And our Court of Appeals has followed suit by consistently permitting Bivens claims that target due process violations (see, e.g., Alejo v. Heller, 328 F.3d 930, 932 (7th Cir. 2003) and Hoosier Bancorp of Ind., Inc. v. Rasmussen, 90 F.3d 180, 182 (7th Cir. 1996)). And there is no question that the wrong asserted here--a violation of the right to a fair trial, which is derived from the Due Process Clause--undoubtedly falls within those parameters.
Even more directly in point and most important for present purposes, Manning I, 355 F.3d at 1031 specifically held under the facts of that case that the Brady-based claim there could proceed under the authority of Bivens. Although Manning I stopped short of stating that all Brady claims could be brought under Bivens, it implied that such a broad holding would be consistent with Seventh Circuit precedent that recognizes Bivens as an appropriate vehicle for due process violations (id. at 1031 n.1). But even when confined to its facts, Manning I forecloses Buchan's argument in this action because Buchan himself was a defendant in that litigation and the two cases involve virtually identical conduct.
Buchan mysteriously ignores the Manning litigation in his briefing, offering instead a lengthy exposition on the Supreme Court's jurisprudence of implied rights of action (B. Mem. 2-8). Buchan's only reference to Manning I came in his November 12, 2010 motion to stay proceedings pending appeal, where he said:
Defendant Buchan never raised a special factors argument in the Manning litigation until his cross-appeal in 2007, which was dismissed without consideration as moot when the Seventh Circuit found that Defendant Buchan prevailed on other grounds. See Manning v. United States, 546 F.3d 430, 438 (7th Cir. 2008) ("Manning II"). Thus, the Seventh Circuit never had an opportunity to address the special factors issue in the Manning case.
But as Buchan himself makes clear in his current memorandum in support of his motion to dismiss, the "special factors" argument has been a fixture of Bivens jurisprudence since Bivens itself. It is not a new development that draws Seventh Circuit caselaw into doubt, and the fact that it was not expressly raised in Manning I in no way invalidates that case's clear holding.*fn7
Nor does the dictum in Carvajal v. Dominquez, 542 F.3d 561, 570 & n.3 (7th Cir. 2008) change that result. Carvajal, id. at 567 held that a DEA agent's false statement to a prosecutor did not rise (or fall?) to the level of a Brady violation. Although Carvajal did not reach the question whether a Bivens action was available for a Brady violation, it included an ipse dixit--without citation to any Seventh Circuit precedent--that it was "doubtful" that such a remedy existed (id. at 570).*fn8
Nonetheless the Carvajal dictum is not a reason, in the face of binding precedent, to dismiss Engel's claim.
This Court therefore holds that Engel may properly assert his Brady-based claim against Buchan as a Bivens action. That leads in turn to the question whether Buchan is insulated against that claim by qualified immunity.
Qualified Immunity from the Bivens Claim?
To overcome a defense of qualified immunity, Engel bears the burden of demonstrating (1) that the facts, taken in the light most favorable to Engel, show that Buchan violated a constitutional right and (2) that the constitutional right was clearly established at the time of the alleged violation (see Saucier v. Katz, 533 U.S. 194, 201 (2001)).*fn9 Buchan asserts that he is entitled to qualified immunity because the Complaint, in his view, does not plead sufficient facts to state a due process claim.
That contention also fails to grapple with the significance of the Manning litigation. Manning I, 355 F.3d at 1034 examined the allegations against Buchan--allegations that are nearly identical to those here--and found that they "easily satisfied" the just-stated first prong of the qualified immunity test.
Those allegations resulted in an over $6.5 million jury verdict against Buchan, although that verdict was later vacated for a legal reason wholly unrelated to the sufficiency of the evidence.
Engel's 16-page Complaint alleges the same set of facts--basically that Buchan framed him, just as he had Manning, by fabricating evidence, manipulating witnesses and withholding exculpatory evidence. According to Engel (and there is no reason to doubt it), this case will involve the same witnesses and rely on the same evidence developed in the month-long Manning trial.
Engel's Complaint has thus undoubtedly given Buchan fair notice of the nature of the claim against him, and to suggest otherwise defies common sense. It is really an understatement to say that Engel's Complaint has stated a claim for relief that is "plausible on its face" (Twombly, 550 U.S. at 570).*fn10
Manning I is also instructive (and dispositive) on the second prong of the qualified immunity test: whether a reasonable officer would have known that his actions were unconstitutional in light of clearly established law. Here is what was said in Manning I, 255 F.3d at 1034:
[I]t is enough that prior to the actions that gave rise to this case, it was well established that investigators who withhold exculpatory evidence from defendants violate the defendant's constitutional due process right.
And just as Manning I held that the nearly identical conduct there constituted clearly established violations of a defendant's constitutional rights, so do those same actions by Buchan for purposes of this suit.*fn11 In sum, because Engel has properly stated a claim for a violation of a constitutional right, and because that right was clearly established at the time of the asserted violation, Buchan is not entitled to qualified immunity against the Brady claim.*fn12
Engel claims that Buchan and Quid employed the FBI and Village as "enterprises" to conduct racketeering activity in violation of 18 U.S.C. §1962(c) and conspired to do so in violation of 18 U.S.C. §1962(d).*fn14 Defendants attack that claim in somewhat different ways.
For his part Quid argues that the RICO claims are time-barred and, alternatively, that Engel lacks standing to pursue them and has failed to plead two predicate acts, as required by Section 1961(5).*fn15 Buchan also advances a time-bar defense, in addition to which he shoehorns his assault on the elements of RICO into a bid for qualified immunity on the premise that a plaintiff's failure to state a claim of violation of a constitutional right entitles the official against whom the claim is brought to qualified immunity. This opinion will speak to the time-bar subject first, then moves on to the elements of a RICO claim.
Tolling Under Heck v. Humphrey
Engel admits that he filed his RICO claim more than four years after discovering his injury, a delay that would normally require dismissal of the claim as time-barred (Jay E. Hayden Found. v. First Neighbor Bank, N.A., 610 F.3d 382, 387 (7th Cir. 2010)). But dismissal is not warranted, he urges, because his claim was tolled under Heck v. Humphrey, 512 U.S. 477 (1994) and therefore did not accrue until his conviction was vacated by the Missouri Supreme Court in 2010. Heck, id. at 487 held that a claim under 42 U.S.C. §1983 ("Section 1983")*fn16 is not cognizable where the resolution of the claim "would necessarily imply the invalidity" of a state court conviction or sentence--that is, claims that would necessarily imply the invalidity of the conviction or sentence do not arise, and so the statute of limitations does not begin to run, until that conviction or sentence has been overturned (Washington v. Summerville, 127 F.3d 552, 555 (7th Cir. 1997)).
As a threshold matter Quid and Buchan concede that Heck is not limited to claims brought under Section 1983, but it may also apply in the RICO context.*fn17 They do not agree, however, that Engel's RICO claim "necessarily implies" that his conviction was invalid. Instead, they say, his claim accrued when he first discovered the injury, and it is now time-barred as a result.
Engel has by far the better of the argument. His allegations--that defendants deprived him of a right to a fair trial by fabricating evidence, tampering with witnesses and obstructing justice--are strikingly similar to those made in Heck itself. Heck charged in his Section 1983 suit against state prosecutors and a police officer that they engaged in an unlawful investigation, knowingly destroyed exculpatory evidence and employed an unlawful voice identification procedure at a trial resulting in his conviction (512 U.S. at 479). Such claims, the Heck Court explained, quite obviously cannot coexist with a valid conviction because they seek to recover damages directly attributable to the conviction itself (id. at 486-87).
Quid attempts to escape Heck's obvious applicability by seeking to analogize Engel's claims to allegations made in the Fourth Amendment context, which Heck, id. at 487 n.7 suggested might not necessarily imply the invalidity of a conviction. But Engel is not alleging a Fourth-Amendment-violative false arrest (as in Wallace v. Kato, 549 U.S. 384, 387-92 (2007) or Booker v. Ward, 94 F.3d 1052, 1056 (7th Cir. 1996)), a claim that has been held to be outside of Heck's purview. Instead Engel is bringing due process claims under the Fifth Amendment as to Buchan and under the Fourteenth Amendment (or perhaps the Fifth) as to Quid, and in no sense could those claims have accrued before his conviction, because the asserted misconduct is inextricably linked to his criminal trial.
As explained in Heck, claims of that nature simply cannot coexist with a valid conviction. And that being the case, Engel's RICO claims were tolled under Heck and are therefore not time-barred.*fn18
Despite having overcome the limitations problem, Engel is not out of the woods, for he must still demonstrate that he has standing to pursue a RICO claim. Standing is a jurisdictional requirement that this Court must consider before reaching the merits of a RICO claim (Evans v. City of Chicago, 434 F.3d 916, 924 (7th Cir. 2006)). And to show standing to sue under RICO, Engel "must first present the court with evidence that he incurred an injury to his 'business or property' within the meaning of §1964" (id. at 924-25).
Evans, id. at 925, quoting Doe v. Roe, 958 F.2d 763, 767 (7th Cir. 1992), held that the injury to business or property required for RICO standing does not include "recovery for personal injuries and the pecuniary losses incurred therefrom." Thus, for example, income lost due to an inability to seek gainful employment while imprisoned is not a cognizable RICO injury (id. at 926-27). Nor is money spent on legal fees defending against criminal charges (id. at 931).
Engel argues that the injury to his "business or property" is that he was compelled to spend money defending himself against the criminal charges and suffered a loss to his business reputation and "then-existing business opportunities" (¶66). Those appear to be the kind of damages, derivative of claims of false imprisonment and malicious prosecution, that are barred by Evans. But Evans did not foreclose the possibility that a plaintiff such as Engel could establish standing by demonstrating "that he has been unlawfully deprived of a property right in promised or contracted for wages," as opposed to the mere loss of the ability to pursue employment (434 F.3d at 928).*fn19
Engel's Complaint speaks of an injury to his "then-existing business opportunities" (¶66), but it does not indicate whether he was actually employed and then lost his job because of defendants' asserted misconduct. Some clarity can be found in his Mem. 13, in which he writes that he can "prov[e] that he lost income from, not just the opportunity to pursue work, but actual employment." Although a Complaint amendment to that effect might suffice to establish a cognizable RICO injury and thus confer standing to pursue the claim, that prospect is rendered moot because Engel has failed to establish a "pattern of racketeering activity" (Section 1962(c)) for reasons discussed in the next section.
RICO "Pattern of Racketeering"
Claims under Section 1962(c) require a plaintiff to demonstrate "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity" (Vicom, Inc. v. Harbridge Merchant Servs., Inc., 20 F.3d 771, 778 (7th Cir. 1994)). Even if it is assumed that the conduct, enterprise and predicate act elements have been satisfied--and it is uncertain at best whether Engel has adequately identified at least two predicate acts*fn20 --
Engel's RICO claim must be dismissed because he cannot meet the pattern requirement.
Under Section 1961(5) a "pattern of racketeering activity" requires at least two predicate acts of racketeering committed within a ten-year period. But just as "[o]ne swallow does not make a summer,"*fn21 predicate acts alone do not make a RICO "pattern." To establish a pattern Engel must also demonstrate that those predicate acts "amount to, or that they otherwise constitute a threat of, continuing racketeering activity" (H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 240 (1989) (emphasis in original).
That is what is known as the "continuity plus relationship" test (Midwest Grinding Co. v. Spitz, 976 F.2d 1016, 1022 (7th Cir. 1992)). "Continuity" may be one of two types, open-ended and closed-ended (see H.J., 492 U.S. at 241), and here Engel urges the closed-ended variety.*fn22 Closed-ended continuity, as explained in Jennings v. Auto Meter Prods., Inc., 495 F.3d 466, 473 (7th Cir. 2007)(internal quotation marks omitted): refers to criminal behavior that has come to a close but endured for such a substantial period of time that the duration and repetition of the criminal activity carries with it an implicit threat of continued criminal activity in the future.
Engel's claim of continuity is squarely foreclosed by Gamboa v. Velez, 457 F.3d 703 (7th Cir. 2006), which held on an interlocutory appeal from the denial of a motion to dismiss that plaintiff had failed to establish RICO continuity. In Gamboa a plaintiff who had been acquitted of murder sued several Chicago police detectives for malicious prosecution and intentional infliction of emotional distress, as well as violations of Section 1983 and RICO (id. at 704). Gamboa charged that the detectives framed him, along with four other defendants, by such actions as "making false arrests, tampering with witness statements, procuring perjured testimony, committing perjury" themselves and then covering up their wrongdoing (id. at 706). Gamboa, id. at 709 held that the alleged predicate acts did not demonstrate the requisite continuity, describing its holding in these terms:
Restated, when, as here, a complaint explicitly presents a distinct and non-reoccurring scheme with a built-in termination point and provides no indication that the perpetrators have engaged or will engage in similar misconduct, the complaint does not sufficiently allege continuity for §1962(c) purposes even if the purported scheme takes several years to unfold, involves a variety of criminal acts, and targets more than one victim.
There is no difficulty in transposing that holding onto Engel's RICO claims. Here Engel's Complaint also "explicitly presents a distinct and non-reoccurring scheme," the goal of which was to engineer the false convictions of Engel and Manning. As described in the Complaint, that scheme took place over the course of four years, involved a number of criminal acts and had more than one victim in its sights. Those allegations mesh almost exactly with the elements described in Gamboa's carefully-tailored holding.
Nor is there even a hint that defendants--both now retired from their law enforcement positions (see ¶¶7, 8)--"have engaged or will engage in similar misconduct" (Gamboa, 457 F.3d at 709). And it makes no difference that, in Engel's opinion, defendants have continued to obstruct justice by not apprehending the actual perpetrators of the crime (¶62). Gamboa, id. at 708 n.2 expressly noted that "acts to conceal the underlying wrongdoing in a RICO suit do not carry with them the threat of future harm and generally do not extend the duration of the underlying scheme."*fn23
Engel attempts to distinguish Gamboa on the basis that the predicate acts in that case were limited to framing individuals for a single crime, whereas his own claim is not so limited (presumably Engel is referring to the related prosecution of Manning for murder). But the Gamboa holding is not restricted to situations in which law enforcement officers are investigating a single crime. What is necessary is rather that the complaint does not set out a "distinct and non-reoccurring scheme with a built-in termination point" such that there is no threat of continued criminal activity (457 F.3d at 709). And the attempt to frame Engel and Manning, as alleged in the Complaint here, ended with both of them in prison for long terms, thus unquestionably foreclosing any threat of continued criminal activity. That Manning was also prosecuted for murder in addition to kidnaping does not change that inescapable conclusion.
It is also worth noting the remarks in Gamboa, 457 F.3d at 710 as to the attempted use of RICO as a weapon against law enforcement officers by those who, like Engel, believe they were wrongfully convicted:
We briefly add that this conclusion [that the claim cannot establish RICO continuity] makes particular sense in the context of a frame-up claim against police detectives.
While we do not intend to minimize Gamboa's case by labeling it "garden variety," it is not uncommon for a criminal investigation to develop over the course of several years. Further, many investigations involve a variety of police activities and result in charges against multiple defendants. Under the district court's approach, the presence of three such commonplace occurrences would satisfy §1962(c)'s continuity requirement and thereby routinely enable the conversion of malicious prosecution claims into RICO claims. That is too broad a brush given RICO's limited concern of punishing organized and habitual criminal conduct.
Such a clear message from our Court of Appeals should not be lightly ignored, and it only reinforces the conclusion reached here that Engel has failed to state a viable RICO claim. Engel's RICO claim is therefore dismissed, as is his conspiracy claim under Section 1962(d) because the latter is based on the same core of facts (see Stachon v. United Consumers Club, Inc., 229 F.3d 673, 677 (7th Cir. 2000)).
Buchan's and Quid's partial motions to dismiss are granted as to Engel's RICO claims, which are therefore dismissed with prejudice. But Buchan's motion is denied as to Engel's Brady claim--and subsumed with that denial is the denial of qualified immunity as to that claim.
This action has been hanging fire much too long because of procedural and pleading skirmishes. This Court expects the parties to move forward aggressively on Engel's surviving claims, with an eye toward setting a schedule for the completion of discovery as early as possible. And because the same government counsel represents both Buchan and the United States, it is expected that discovery will be managed so as to minimize the need to plow the same evidentiary fields if the newly-filed United States motion (see n.2) were to be denied.*fn24