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Empress Casino Joliet Corp. v. Johnston

United States District Court, N.D. Illinois, Eastern Division

November 28, 2014

EMPRESS CASINO JOLIET CORP., et al., Plaintiffs,
JOHN JOHNSTON, et al., Defendants.


MATTHEW F. KENNELLY, District Judge.

This case is set for a jury trial starting on December 1, 2014. The Court held a final pretrial conference on November 25-26, 2014 and heard arguments on the parties' motions in limine. These motions had previously been the subject of extensive briefing. This order sets forth the Court's rulings on the motions.

Defendants' motions in limine

1. Pre-2008 conduct

Plaintiffs' claims in this case all turn on a common contention: in 2008, Johnston, who owned or controlled two Illinois horse racing tracks, entered into an agreement to make a contribution to Governor Rod Blagojevich's campaign fund in return for Blagojevich supporting and signing legislation that imposed a tax on certain Illinois casinos and put the funds into a trust for the benefit of the Illinois horse racing industry.

Plaintiffs previously made similar contentions regarding the 2008 Racing Act's predecessor, adopted in 2006. The Seventh Circuit ruled, however, that "[t]he Casinos have not pointed to evidence that would allow a factfinder to conclude that the Racetracks' alleged bribery scheme caused the legislature to pass the '06 Act." Empress Casino Joliet Corp. v. Johnston, 763 F.3d 723, 729 (7th Cir. 2014). More specifically, the Court stated:

Evidence is similarly lacking to support a finding that the Racetracks bribed Governor Blagojevich to sign the '06 Act into law. The Casinos point to a meeting between Johnston and Blagojevich's aide Chris Kelly in 2006 while the Act was stalled in the legislature. But they provide no evidence that Johnston offered Kelly a bribe in exchange for Governor Blagojevich's signature during that meeting. The letter from the Racetracks to Blagojevich after the '06 Act passed merely thanked him for his support; it did not suggest that Blagojevich had agreed to sign the bill in exchange for a bribe. The fact that the Racetracks later made campaign contributions cannot, without more, support liability for acts of political corruption.

Id. at 731. Following remand, this Court ruled that the Seventh Circuit's determination "precludes reliance on the allegedly illegal conduct involving the 2006 statute to provide RICO predicate acts." Order of Oct. 24, 2014 at 9 (dkt. no. 295). In the same order, however, the Court stated that it "need not and does not address at this point whether evidence about this conduct might be admissible for other purposes." Id.

Defendants have now moved to bar "any evidence of Defendants' conduct relating to the 2006 Act, including Defendants' history of political donations and lobbying efforts, and meetings with Blagojevich fundraiser Christopher Kelly." Defs.' Mots. In Limine at 2. The Court grants this motion in part. First, the Court previously barred plaintiffs from contending that defendants bribed Blagojevich in connection with the 2006 Act. Second, the upshot of the Seventh Circuit's ruling quoted above is that evidence of defendants' contacts with Kelly relating to the 2006 Act is likewise inadmissible. Third, the Court reaches the same conclusion regarding evidence of lobbying concerning the 2006 Act; such evidence is excluded.

This does not mean, however, that all "[e]vidence of Defendants' [c]onduct [p]rior to 2008" is inadmissible, as defendants expansively propose in a heading in their motion in limine and as they seemed to contend at the final pretrial conference. Nothing about the Seventh Circuit's ruling suggests that nothing that happened prior to 2008 is relevant. In fact, plaintiffs have persuasively argued that the following pre-2008 evidence is relevant and admissible:

- First, the fact that Blagojevich the 2006 Act the day after it was presented to him is admissible. In 2008, Blagojevich delayed signing the Act. Plaintiffs contend, with some supporting evidence, that he did so in order to verify that the promised payment was coming in. The delayed signature is part of the circumstantial evidence that supports plaintiffs' contention regarding the bribery scheme, and the fact that Blagojevich treated the 2008 Act differently from the 2006 Act tends to support the inference that plaintiffs want to draw from the delay. This evidence does not unfairly prejudice defendants in the least, as it does not bring into play any sort of claim or contention that the 2006 Act's signature or passage was the result of bribery.

- Second, the amount of money defendants received as a result of the 2006 Act (which was similar to the 2008 Act) is admissible. This is relevant evidence of a motive on defendants' part to ensure the passage of the 2008 Act. Again, defendants will not be unfairly prejudiced by this, because there will be no claim or contention that the 2006 Act was adopted as a result of bribery or other improper conduct.

- Third, evidence regarding the amounts of prior contributions by Johnston and his affiliated entities to Blagojevich's campaign funds is admissible. Plaintiffs offer a chart showing that from 2002 through 2007, these entities contributed a total of $320, 000.[1] Plaintiffs' contention regarding the 2008 Act is that Johnston promised to make a $100, 000 contribution in return for Blagojevich's support of and signature on the legislation. (Ultimately, no contribution was made; Blagojevich signed the 2008 Act shortly after he was arrested on criminal charges.) As plaintiffs have argued, the evidence that Johnston had been a major contributor in the past tends to support the notions that he would have agreed to make a significant contribution in 2008 and that Blagojevich and his agents would have sought a significant contribution from Johnston at that time. As the Court put it during the final pretrial conference, "if we were talking here about somebody who had never made a contribution in the past to the Blagojevich campaign, then, you know, arguably it wouldn't have made any sense for there to have been these conversations about... getting a big contribution in 2008.... The Blagojevich folks were aware that this was somebody who had made significant contributions in the past, which makes it all the more likely that there would have been some attempt to, you know, make a deal for a big contribution in the future." Nov. 25, 2014 Tr. at 72-73.

Contrary to defendants' contention, this is not impermissible "propensity" evidence. The Plaintiffs' evidence indicates that Johnston had a regular business practice-to put it another way, a habit-of making significant contributions to Blagojevich during his campaigns for and service as governor. And there is and will be no suggestion that any of the prior contributions involved a quid pro quo. The Court is willing to give an appropriate limiting instruction regarding the jury's consideration of this evidence and will leave it to defendants to propose one.

The Court overrules, however, plaintiffs' request to introduce evidence that the 2006 Act passed the legislature only after the third vote. They argue this evidence is relevant to show that defendants had reason to be concerned about the legislation's renewal in 2008, thus giving them a motive to agree to a quid pro quo with the governor. As the Court understands plaintiffs' claims, however, the focus of the case following the Seventh Circuit's decision involves the effort to procure the governor's signature on the legislation, not any effort to procure his assistance in getting the Act adopted by the legislature.

The Court likewise overrules plaintiffs' request to introduce evidence regarding defendants' contributions to former Illinois Governor James Edgar. These contributions were at a far lower level than their contributions to Blagojevich, and plaintiffs wish to highlight the contrast. Plaintiffs have not shown, however, that the underlying state of affairs regarding legislation affecting the casino and horse racing industries during Edgar's campaigns or tenure in office was similar to that which existed in 2008. For this reason, the two time frames are not sufficiently comparable to make the evidence relevant or to give it any significant probative value.

Lastly with regard to the issue of contributions, if state representative Robert Molaro is called to testify by defendants, plaintiffs may introduce evidence of defendants' contributions to his campaign, but solely for the purpose of showing his bias. If this occurs, defendants will be entitled to a limiting instruction if they request one.

Finally, it is unclear whether defendants seek to preclude evidence about their retention of Alonzo Monk, Blagojevich's former chief of staff, to lobby the governor on their behalf. This occurred, it appears, in 2007. Defendants do not reference this evidence in their motion in limine. Even though this evidently took place in 2007, it is unquestionably relevant and admissible: during his tenure as a lobbyist for the defendants, Monk had several conversations with Blagojevich regarding the 2008 Act.

2. Evidence relating to the U.S. v. Blagojevich criminal case

Defendants ask the Court to exclude evidence that was admitted in Blagojevich's criminal case, including the charging documents and the judgment of conviction; the plea agreement and judgment of conviction of Alonzo Monk, who will be called by plaintiffs to testify in the present case; the grant of immunity to Johnston; and various recorded conversations and transcripts of those conversations. The Court ruled on these matters orally at the final pretrial conference on November 25 and simply summarizes those rulings here.

Plaintiffs have represented that during his deposition, Monk attested to the accuracy of the recordings and transcripts in question, so it is likely that he will do so at trial (and if he balks, his deposition testimony will be admissible for its truth under Federal Rule of Evidence 801(d)(1)(A)). Defendants object that the conversations are hearsay. They are not. First, there is sufficient evidence to support a finding that Monk, a paid lobbyist for defendants, was acting as their agent during the conversations in question, making his statements admissible against defendants pursuant to Federal Rule of Evidence 801(d)(2)(D) and the statements of the conversations' other participants admissible to put Monk's statements in context.[2] Second, and more importantly, plaintiffs have laid the foundation for admissibility of the conversations in their entirety as co-conspirator declarations under Rule 801(d)(2)(E). The recorded conversations may be considered in determining whether the basis for admissibility under this Rule has been shown, see Bourjaily v. United States, 483 U.S. 171, 176-81 (1987), and there is enough evidence in addition to the recorded conversations themselves to show the existence of a conspiracy and defendants' participation in it, see United States v. Harris, 585 F.3d 394, 398-99 (7th Cir. 2009). This includes, among other things, Johnston's own statements and other evidence cited by the Seventh Circuit in upholding plaintiffs' claim relating to the 2008 Act. See Empress Casino Joliet Corp., 763 F.3d at 726, 731-32.

The criminal complaint and indictment charging Blagojevich are inadmissible. Plaintiffs want to introduce them to rebut defendants' assertion that they were, at most, victims of a shakedown, not members of a bribery conspiracy. Used for this purpose, the charging documents are inadmissible hearsay. The same is true of the judgment of conviction. (Defendants likewise may not attempt to draw from the criminal charges or judgment against Blagojevich, or from contentions made by the government in the criminal case against him, that they were victims and not willing participants.)

The Court also excludes Monk's plea agreement-identified as an exhibit by plaintiffs-on the basis that the vast majority of its terms are irrelevant and would tend to confuse the jury in the present case. As the Court stated at the pretrial conference, however, plaintiffs may elicit from Monk testimony that he pled guilty to conspiracy to solicit a bribe from defendants and also the outline of the facts to which he admitted. (Defense counsel stated at the pretrial conference that they did not object to testimony by Monk along these lines. See Nov. 25, 2014 Tr. at 51-52.) The plea agreement may be used if necessary to refresh Monk's recollection or to impeach him if he does not acknowledge what he agreed to, see id. at 52, but that will not make the agreement itself admissible as an exhibit.

Plaintiffs may introduce Johnston's immunity agreement, which he signed in December 2008 in connection with the Blagojevich investigation. See Pls.' Resp. to Defs.' Mots. In Limine, Ex. 3. The document includes a statement that Johnston's information may tend to incriminate him, which is relevant for fairly obvious reasons: it is arguably an admission of the claims asserted in this case. The related issue of the admissibility of Johnston's assertion of the Fifth Amendment is discussed in the next section.

3. Inference from invocation of Fifth Amendment by Blagojevich and Johnston

The Court reaffirms its oral ruling at the final pretrial conference on November 25 that plaintiffs may not introduce evidence regarding Blagojevich's invocation of his Fifth Amendment privilege in connection with his deposition in the present case. The only conceivable purpose for introducing the questions posed to Blagojevich and his invocation of the privilege is to draw an inference that truthful answers would have established the existence of a bribery conspiracy. Plaintiffs have offered no basis to draw an inference adverse to defendants from Blagojevich's ...

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