Commercial Litigation and Arbitration

Appealability — Denial of Summary Judgment Is Generally Interlocutory, Subsumed by Verdict, Unappealable — But a “Controversial Exception” Exists for “Purely Legal Issues” (Circuit Split)

Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc., 2016 U.S. App. LEXIS 14057 (7th Cir. Aug. 2, 2016):

A. Facilitating a RICO Enterprise

The racetracks did not properly preserve for appeal their argument that the evidence did not support a finding that the racetracks agreed to facilitate the Blagojevich racketeering enterprise. To preserve a sufficiency-of-the-evidence challenge for appeal in a civil case, a party must move for judgment as a matter of law under Federal Rule of Civil Procedure 50(a) and renew that motion under Rule 50(b) after the jury's verdict. Ortiz v. Jordan, 562 U.S. 180, 189 (2011). In their Rule 50(a) and (b) motions, the racetracks challenged the sufficiency of the evidence on the other grounds we address below. In a footnote in their Rule 50(b) motion, the racetracks did "incorporate by reference" their entire earlier supplemental motion for summary judgment, which included an argument about facilitation. However, the racetracks did not argue in their Rule 50 motions that there was insufficient evidence that they knowingly facilitated the activities of the racketeering enterprise.

To avoid the Rule 50 problem, the racetracks suggest that we review instead whether the district court erred in denying their supplemental motion for summary judgment. But denial of summary judgment is an interlocutory [*11]  matter subsumed by a final judgment. Once a jury has rendered its verdict, "the full record developed in court supersedes the record existing at the time of the summary-judgment motion." Ortiz, 562 U.S. at 184; see also Lawson, 791 F.3d at 761 ("summary judgment relies on evidentiary predictions, which are unnecessary once a jury has found the actual facts"). After trial, the summary judgment denial is ancient history and not subject to appeal.

The racetracks argue that, even after the jury has rendered its verdict, we should review the denial of summary judgment as to purely legal issues. See Lawson, 791 F.3d at 761-62 & n.2 (contract interpretation issue was reviewable, but noting circuit split on issue); Chemetall GmbH v. ZR Energy, Inc., 320 F.3d 714, 718-20 (7th Cir. 2003) (same). This controversial exception for purely legal issues does not apply here. The racetracks' argument regarding facilitation challenges the sufficiency of the evidence supporting the jury's verdict, so their failure to raise the argument in Rule 50(a) and (b) motions blocks that particular argument on appeal. See Brown v. Smith, No. 15-1114,     F.3d    ,    , 2016 WL 3536619, at *3 (7th Cir. June 28, 2016) (factual issue not properly preserved for appellate review after trial absent Rule 50(b) motion).4

4   In any event, we are satisfied that there was no independent merit to the racetracks' facilitation argument, based on the evidence of the quid pro quo agreement [*12]  to bribe Blagojevich.

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