Narrative Opinion Summary
This case arises from a civil racketeering lawsuit involving four riverboat casinos against former Illinois Governor Blagojevich and the owner of two horse-racing tracks. The casinos allege a pay-to-play scheme where Blagojevich 'sold' the passage of gaming laws requiring them to pay a 3% surcharge to a fund benefiting racetracks. The district court allowed the RICO conspiracy claim to proceed but dismissed the constructive-trust claim, citing the Tax Injunction Act. The appeals court upheld the decision on the RICO claim, allowing it to proceed against Blagojevich and other defendants, but reinstated a temporary restraining order on the surcharge funds. Legislative immunity was found to protect Blagojevich for actions related to passing the Acts, while the court ruled the surcharge as a regulatory fee, not a tax, permitting the constructive-trust claim. The case's procedural history includes multiple appeals and a federal corruption investigation into Blagojevich, resulting in his impeachment and criminal charges. The appellate court's decision maintains the RICO claim's viability while remanding the constructive trust issue, asserting that the Tax Injunction Act does not bar the claim. The dissent highlights concerns about legislative immunity's scope and the applicability of the Tax Injunction Act.
Legal Issues Addressed
Definition of Regulatory Feessubscribe to see similar legal issues
Application: The surcharge is deemed a regulatory fee rather than a tax because it redistributes profits from private entities without supporting state services, and is kept in a segregated account.
Reasoning: This surcharge, imposed on the state's top-earning riverboat casinos at 3% of their adjusted gross revenue, does not contribute to state revenue or support any government services but redistributes profits from private firms directly to select racetracks.
Legislative Immunity for Governorssubscribe to see similar legal issues
Application: The court found that legislative immunity protects Blagojevich from civil suits related to his legislative acts, specifically signing the Racing Acts, despite allegations of misconduct.
Reasoning: Legislative immunity protects state and local officials from federal suits for personal damages arising from legitimate legislative activities, as seen in cases like Supreme Court of Virginia v. Consumers Union and Tenney v. Brandhove.
Res Judicata and New Claimssubscribe to see similar legal issues
Application: The current federal claims against racetracks and other defendants are not barred by res judicata, as they involve different parties and issues from prior state court decisions.
Reasoning: The Illinois Supreme Court's decisions in Giannoulias and a denial of a 2-1401 petition do not have res judicata effect on the constructive-trust or RICO claims in this case, as those claims were not decided and could not have been raised in the constitutional challenge to the 2006 Racing Act.
RICO-Conspiracy Claimssubscribe to see similar legal issues
Application: The RICO conspiracy claim against Blagojevich, his campaign committee, Johnston, and the racetracks is allowed to proceed, reflecting the allegation of a corrupt agreement to influence legislation.
Reasoning: The appeals court upheld the district court's decision on the RICO claim and the immunity for Blagojevich regarding his legislative actions linked to the Horse Racing Acts.
Tax Injunction Act and Regulatory Feessubscribe to see similar legal issues
Application: The Tax Injunction Act does not preclude federal court jurisdiction as the casino surcharge is classified as a regulatory fee, not a tax, because it does not contribute to general state revenue.
Reasoning: The Tax Injunction Act does not prevent the court from establishing a constructive trust on funds from the Horse Racing Fund, as the casino surcharge is classified as a regulatory fee rather than a tax.