Commercial Litigation and Arbitration

Municipal Entities’ Immunity from RICO Extends to Municipal Employees to the Extent They Act in Their Official Capacity, Only

Two cases:

• From LaFlamboy v. Landek, 587 F. Supp. 2d 914 (N.D. Ill. 2008):

The Village Defendants also argue that because municipal corporations cannot be held liable under RICO, see Lancaster Cnty. Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397, 404-05 (9th Cir. 1991), Village employees escape RICO liability for acts undertaken on behalf of the Village. Persuasive authority supports Defendants' argument. See Lathrop, 220 F.R.D. at 335 ("Because the City of Granite City cannot be held liable under RICO for the reasons stated above, the suit against the government officials in their 'official capacity' also cannot be maintained."); Frooks, 997 F. Supp. at 457 ("[B]ecause the Town cannot be held liable under RICO as a matter of law, neither may the Town employees in their official capacities."); Rini v. Zwirn, 886 F. Supp. 270, 295 (E.D.N.Y. 1995) ("[S]ince the municipality cannot be held liable for the acts of its agents, the Town employees, in their official capacity, cannot be held liable under RICO."). Indeed, "official capacity" suits are merely a way of pleading an action against a municipality that cannot be held liable under a respondent superior theory. See Hafer v. Melo, 502 U.S. 21, 25, 112 S. Ct. 358, 361, 116 L. Ed.2d 301 (1991); see also Ky. v. Graham, 473 U.S. 159, 165, 105 S. Ct. 3099, 3104, 87 L. Ed.2d 114 (1985), ("a plaintiff seeking to recover on a damages judgment in an official-capacity suit must look to the government entity itself.").

[Footnote 16.] See Genty v. Resolution Trust Corp., 937 F.2d 899, 914 (3d Cir. 1991) ("[T]he prevailing punitive nature of section 1964(c)'s compulsory award of treble damages convinces us that Congress, in keeping with the common law, did not intend to subject municipal corporations to RICO liability..."); Lathrop v. Juneau & Assocs., 220 F.R.D. 330, 335 (S.D. Ill. 2004); Pelfresne v. Village of Rosemont, 22 F. Supp. 2d 756, 761 (N.D. Ill. 1998); see also Frooks v. Town of Cortlandt, 997 F. Supp. 438, 457 (S.D.N.Y. 1998) (collecting cases); see also City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 261-62, 69 L. Ed.2d 616, 101 S. Ct. 2748 (1981) (suggesting that municipalities are incapable of committing malicious or criminal acts).

Even accepting that the Village Defendants cannot be held liable in their official capacities, however, Defendants' argument is not dispositive because Plaintiff also pursues his claim against the Village Defendants in their individual capacities. Plaintiff, for example, asserts that the Village Defendants acted "for the personal, pecuniary, and political benefit of themselves and others who supported defendant Landek." *** In addition, public officials can be held individually liable for actions taken while holding public office and/or misuse of their public office. See, e.g., United States v. Warner, 498 F.3d 666, 696 (7th Cir. 2007) (affirming RICO conviction of former Illinois governor based on activities defendant was serving as Illinois Secretary of State and Governor); United States v. Emond, 935 F.2d 1511, 1512 (7th Cir. 1991) (affirming RICO conviction of village manager who "used his official position as Streamwood's village manager to extort money from persons with business before the village government.").

[Footnote 17.] Indeed, as discussed below, the Seventh Circuit has held that certain violations of Illinois' Official Misconduct Statute, specifically, 720 ILCS 5/33-3(d), which applies to misconduct committed while in office, can constitute a RICO predicate act. See United States v. Garner, 837 F.2d 1404, 1419 (7th Cir. 1987); see also United States v. Genova, 333 F.3d 750, 758 (7th Cir. 2003) (720 ILCS 5/33-3(d) "defines a species of bribery" and thus violations constitute predicate acts for RICO purposes; violations of 720 ILCS 5/33-3(c), however, do not).

• From Hoekstra v City of Arnold, 2009 U.S. Dist. LEXIS 7465 (E.D. Mo. Feb. 3, 2009):

Municipality Liability and Liability of Municipal Officials Sued in their Official Capacities under RICO. Defendants, other than ATS, seek dismissal of the RICO claims against City and the individual Defendants sued in their official capacities on the ground that government entities cannot form the intent necessary to violate RICO. Lancaster Comm. Hosp. v. Antelope Valley Hosp., 940 F.2d 397, 404-05 (9th Cir. 1991); Smith v. Babbitt, 875 F. Supp. 1353, 1365 n. 11 (D. Minn. 1995). These Defendants also urge that a RICO civil action may not be maintained against a municipality because a municipality cannot be liable for the treble damages imposed in such an action. Genty v. Resolution Trust Corp., 937 F.2d 899, 914 (3rd Cir. 1991). Additionally, these Defendants argue that, because lawsuits against government officials in their official capacities are treated as lawsuits against the governmental entity itself, Will v. Michigan Dept. of State Police, 491 U.S. 58, 71 (1989), the RICO claims against the individual municipal officials sued in their official capacities fail.


Although it appears the Eighth Circuit has addressed issues in at least one civil RICO case against a city, its mayor, and its city council members, among others, Bieter Co. v. Blomquist, 987 F.2d 1319 (8th Cir. 1993), that decision did not have under consideration issues regarding the intent necessary for a municipality's liability, a municipality's liability for treble damages, or the liability of municipal officials sued in their official capacities in a civil RICO action. Because, as all Defendants, except ATS, point out and Plaintiffs concede, there is authority supporting the dismissal of the RICO claims against City, and because a lawsuit against the individual defendants, who are City officials, sued in their official capacities, is properly considered a suit against City, Wilson v. Spain, 209 F.3d 713, 717 (8th Cir. 2000) (§ 1983 action), the motion to dismiss the RICO claims filed by all Defendants, except ATS, is granted to the extent it sought dismissal of the RICO claims against City and the individual defendants sued in their official capacities.

Share this article:


Recent Posts