Response to Osterman / Nicholson motion to dismiss

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

THOMAS J. HOLMES, et al., Plaintiffs, v. Case No: 14-CV-208 JOHN DICKERT, et al., Defendants.

PLAINTIFFS’ BRIEF IN OPPOSITION TO DEFENDANTS’ OSTERMAN, JERGER AND NICHOLSON’S MOTION TO DISMISS

In opposition to the Rule 12(b)(6) motion filed on behalf of Defendants Monte Osterman

(“Osterman”), Mary Jerger Osterman (“Jerger”) and Douglas Nicholson (“Nicholson”) (Doc.

Nos. 31 and 32), Plaintiffs submit as follows:

I. Introduction In the face of Plaintiffs’ well-pleaded allegations against these Defendants, their claim

that they were entirely uninvolved rings awfully hollow. Nicholson himself bribed Mayor

Dickert in exchange for the proctecton of his bar and access for himself and his fellow Tavern

League members to available liquor licenses. For their parts, Jerger and Osterman played major

roles in soliciting, accepting and handlnig the bribes issued by members of the Tavern League,

including Nicholson. Their motion asking this Court to dismiss them at the pleadng stage, is,

therefore, baseless.

II. Legal Standard

Plaintiffs adopt here their statement of the legal standard as set forth in their Brief in

Opposition to Downtown Racine Corporation’s Motion to Dismiss. See Sect. II.

Case 2:14-cv-00208-JPS Filed 06/27/14 of 16 Document 48

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III. Argument

A. Plaintiffs RICO claims against Defendants Osterman, Jerger and Nicholson are Properly supported by the allegations in the Complaint

1. Plaintiffs adequately allege predicate acts against Defendants Osterman,

Jerger and Nicholson

Defendants Osterman, Jerger and Nicholson argue that Plaintiffs have failed to allege at

least two acts of racketeering activity under RICO. Def. Mem. at 4. In doing so, these

Defendants fail to comprehend the import of their actions.

a. Plaintiffs have alleged sufficient facts to demonstrate money laundering against Defendants Osterman and Jerger

The federal money laundering statute provides that:

[w]hoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity…with the intent to promote the carrying on of specified unlawful activity; or…knowing that the transaction is designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity … shall be sentenced to a fine . . . or imprisonment for not more than twenty years or both.” 18 U.S.C. § 1956(a)(1)(A)(i) and (B)(i). “Specified unlawful activity” is defined as “any act or activity constituting an offense

listed in § 1961(1),” which defines the predicate acts for a RICO violation. § 1956(c)(7).

Defendants argue the Complaint fails to sufficiently plead predicate acts, and thus fails to meet

the “specified unlawful activity” prong of the money laundering statute. Def. Mem. at 24. That is

not the case.

Here, Plaintiffs’ Complaint adequately alleges the predicate act of money laundering

against Osterman and Jerger. Osterman was responsible for collecting “campaign contributions”

from Tavern League members. ¶ 41. Those contributions regularly exceeded contribution limits


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for individuals. ¶ 41.1 Plaintiffs allege these were not harmless contributions, but were, in fact,

bribes in exchange for official acts as Tavern League members benefitted handsomely from this

quid pro quo. ¶¶ 41, 44. Plaintiffs further allege that Jerger, with Dickert’s knowledge and

consent, fraudulently reported the bribes in campaign finance reports. ¶ 41, 157, 177. Jerger was

also instrumental in laundering thousands of dollars in personal loans to Dickert. ¶ 42. Dickert

received additional bribes after being elected as Mayor in 2009, which were also fraudulently

reported on campaign finance reports and then deposited into the campaign’s bank account. ¶ 43.

The fraudulent reporting was known to the core members of the campaign, including Osterman.

¶ 41.

It can be inferred from the foregoing that Osterman knew about the source and purpose of

the bribes, and yet, continued to collect and deliver them to Jerger who, in turn, continued to

fraudulently report the monetary contributions on campaign finance reports. ¶¶ 41-43, 157, 177.

Because Osterman knew the “campaign contributions” were, in reality, bribes and unlawful

gratuities, it can reasonably be inferred that he knowingly promoted the bribing of a public

official. It can also be inferred that Jerger fraudulently reported the bribes given to her by

Osterman and others in campaign finance reports in order to conceal the nature, use, source and

effect of those bribes. ¶ 41-43. Plaintiffs’ allegations regarding the acts of money laundering

committed by Osterman and Jerger are therefore sufficiently pled.2

1 Defendants cite to a stipulation by the Wisconsin Department of Justice allowing the Eastern District of Wisconsin to declare Wis. Stat. 11.26(4), which sets limits for individual contributions to elected officials, unconstitutional on its face. Defendants fail to grasp the import of Plaintiffs’ allegations. The statute was constitutional during the relevant time period and it can reasonably be inferred that a series of contributions in excess of the statutory limit were not lawful contributions (even if they would be now), but were, in fact, bribes and unlawful gratuities. 2 Plaintiffs have a recorded statement from a former member of Mayor Dickert’s campaign staff describing in greater detail the involvement of Osterman and Jerger in the receipt and fraudulent reporting of illegal campaign contributions. The statement will be produced in the course of discovery but, in the event this Court finds Plaintiffs’ factual allegations against Osterman and Jerger insufficient, it can also be used as the basis for an amended pleading.


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b. Plaintiffs have alleged sufficient facts to demonstrate bribery and unlawful gratuities against Defendant Nicholson

Plaintiffs’ bribery and unlawful gratuities allegations against the Municipal Defendants,

which are summarized throughout their Brief in Opposition to Municipal Defendants’ Motion to

Dismiss, detail the quid pro quo whereby bribe money was given to Mayor Dickert by members

of the Tavern League in exchange for official acts carried out by Mayor Dickert and other

Municipal Defendants. See ¶¶ 41-45, 157, 169.

Plaintiffs allege that Nicholson and other Tavern League members illegally provided

cash, or bribe money, to Mayor Dickert’s office in excess of the campaign contribution limits

intending to influence official acts. ¶¶ 41, 44. Tavern League members provided an additional

benefit to Dickert and other Municipal Defendants, their public support. ¶ 169. In exchange,

Mayor Dickert appointed numerous Tavern League contributors to high-ranking positions within

City government, awarded contributors with City-funded business, and shielded Tavern League

members from Police Department and Licensing Committee scrutiny. ¶¶ 41, 44. Nicholson,

however, was repeatedly spared from scrutiny by the Licensing Committee for incidents that

would have resulted license suspension or revocation for a minority. See ¶¶ 75-76, 79. Therefore,

Plaintiffs adequately allege the predicate act of bribery against Nicholson under federal and state

law. See 18 U.S.C. § 201(b); Wis. Stat. 946.10.

Because Plaintiffs plead bribery against Defendant Nicholson under federal and state law,

the Complaint necessarily alleges facts sufficient to allege him having given unlawful gratuities

under federal and state law. See 18 U.S.C. § 201(c); Wis. Stat. § 11.25(1).

2. Plaintiffs adequately allege a “pattern of racketeering activity”

A RICO claim under 18 U.S.C. § 1962(c) requires a plaintiff plead a “pattern of

racketeering activity,” 18 U.S.C. § 1962(c), or at least two acts of racketeering activity within 10


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years of each other. 18 U.S.C. § 1961(5). In addition, a plaintiff must show that the predicate acts

amount to a pattern of racketeering activity. Under the “continuity-plus-relationship” test for a

pattern of racketeering activity, the predicate acts must be related to one another and pose a

threat of continued criminal activity.

a. There is a sufficient relationship between the predicate acts

The relationship prong of the “continuity-plus-relationship” test requires that the

predicate acts be “committed somewhat closely in time to one another, involve the same victim,

or involve the same type of misconduct.” Morgan v. Bank of Waukegan, 804 F.2d 970, 975 (7th

Cir. 1986). This is a relatively broad standard. United States v. Maloney, 71 F.3d 645, 661 (7th

Cir. 1995). Predicate acts are related if they “have the same or similar purposes, results,

participants, victims, or methods of commission, or otherwise are interrelated by distinguishing

characteristics and are not isolated events.” H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 240,

(1989).

The predicate acts of Osterman, Jerger and Nicholson are sufficiently related to those of

all Defendants; in fact, Plaintiffs allege their respective acts built upon one another to affect a

continuing conspiracy. The alleged acts of bribery, giving unlawful gratuities and money

laundering, together with the Municipal Defendants’ illegal acts, perpetuated a quid pro quo

between Tavern League members and the Municipal Defendants. ¶¶ 41-44, 91-130. The results

of these predicate acts – either the voluntary forfeiture or revocation of liquor licenses from

minority-owned bars – were substantially similar. The victims – minority bar owners – were the

same. Accordingly, the actions of Osterman, Jerger and Nicholson are sufficiently similar to

those of the Municipal Defendants such that the relationship prong of the “continuity-plus-

relationship” is satisfied.


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b. There is closed-ended continuity among the predicate acts

The continuity prong can be satisfied by demonstrating the existence of either closed-

ended or open-ended continuity. A “closed-ended” period of racketeering is a course of criminal

activity that has come to a close. Midwest Grinding Co., Inc. v. Spitz, 976 F.2d 1016, 1022 (7th

Cir. 1992). In order to demonstrate closed-ended continuity, a plaintiff must allege “a series of

related predicates extending over a substantial period of time.” H.J., Inc., 492 U.S. at 241. “The

underlying rationale is that the duration and repetition of the criminal activity carries with it an

implicit threat of continued criminal activity in the future.” Midwest Grinding Co., Inc., 976 F.2d

at 1022-23.

Plaintiffs’ allegations against Osterman, Jerger and Nicholson meet the closed-ended

continuity test. As discussed above, the predicate acts occurred over a six-year period of time

and played an instrumental role in the conspiracy to disparately treat, restrict and/or eradicate

minority-owned bars from downtown Racine. ¶ 38. The conspiracy, which was implemented in

2006, picked up pace in 2009 when Defendant John Dickert, who ran on a platform to

“revitalize” and “clean up” downtown Racine, was elected as Mayor of Racine. ¶40. These

predicate acts continued up to and after Dickert’s 2011 re-election campaign and likely continue

to date. ¶ 43, 154, 158-59. Accordingly, Plaintiffs have properly pled that these acts occurred

over a “substantial period of time.”3

3. Plaintiffs have alleged that the actions of Defendants Osterman, Jerger and Nicholson caused them harm

Defendants next contend that Plaintiffs have failed to allege they were injured in their

business or property by reason of their RICO violations. Def. Mem. at 8. In so doing, Defendants 3 Plaintiffs’ pleading also satisfies the open-continuity standard as there is a threat of continuing harm. For this argument, Plaintiffs incorporate by reference its same argument in opposition to the Municipal Defendants’ motion to dismiss as if fully set forth herein. See Sect. IV(B)(2).


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ignore a volume of well-plead facts and the reasonable inferences that can be drawn therefrom.

In particular, Plaintiffs allege that, as a result of the bribes given to Dickert by Defendant

Nicholson and the money laundering performed by Defendants Osterman and Jerger, they were

forced to spend significant amounts of money to comply with side agreements, lost the goodwill

and patronage of their customers, lost the right to conduct a lawful business, and had their liquor

licenses extorted. ¶¶ 44, 59-62, 91-117. There is no requirement of a “’racketeering injury’

separate from the harm from the predicate acts.” Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S.

479, 495 (1985). Accordingly, Plaintiffs have alleged sufficient facts to support the “but for” and

proximate cause elements of their RICO claim against Osterman, Jerger and Nicholson.

B. Plaintiffs dismiss their claim against Defendants Osterman, Jerger and Nicholson Under 18 U.S.C. § 1962(b).

Plaintiffs agree to voluntarily dismiss their claim against Defendants Osterman, Jerger

and Nicholson under 18 U.S.C. § 1962(b) without prejudice.

C. Plaintiffs allege sufficient facts to state a claim against Defendants Osterman, Jerger and Nicholson Under 18 U.S.C. § 1962(d)

Plaintiffs allege sufficient facts to state a claim under 18 U.S.C. § 1962(d) against

Defendants Osterman, Jerger and Nicholson. The law governing a RICO conspiracy claim under

18 U.S.C. § 1962(d) is detailed in Plaintiffs’ Brief in Opposition to Municipal Defendants’

Motion to Dismiss. See Sect. IV(C)(3).

Plaintiffs’ allegations against Osterman, Jerger and Nicholson implicate the necessary

agreement to sustain a RICO claim, especially at the pleading stage. The Complaint, at a

minimum, pleads facts from which it can be inferred that Osterman, Jerger and Nicholson had

full knowledge of various predicate acts, discussed those acts and promoted the commission of

those acts in effectuate the many facets of the conspiracy, including the bribery of public


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officials in exchange for official acts and the extortion of side agreements and liquor licenses

from minority bar owners. Based on the cumulative effect of these acts, the manner in which

they were carried out and their intended and actual effect, it can reasonably be inferred there was

an agreement by Osterman, Jerger and Nicholson to participate in the endeavor which, if

completed, would constitute a violation of the substantive provisions of the RICO Act. ¶¶ 39-44,

58-63, 90-130, 139-184.

Plaintiffs can also demonstrate they were injured as a result of Osterman, Jerger and

Nicholson’s violations of § 1962(d). Like a claim under 18 U.S.C. § 1962(c), a plaintiff alleging

a violation of § 1962(d) must allege that he or she was injured “by reason of” a violation of §

1962. See 18 U.S.C. § 1964(c). This requires a showing of “but for” and proximate cause.

DeGuelle v. Camilli, 664 F.3d 192, 199 (7th Cir. 2011) (citation omitted). To state a claim for a

RICO conspiracy, a plaintiff must “allege injury from an act that is . . . independently wrongful

under RICO.” Beck v. Prupis, 529 U.S. 494, 505-06 (2000). There is no requirement of a

“’racketeering injury’ separate from the harm from the predicate acts.” Sedima, S.P.R.L. v. Imrex

Co., Inc., 473 U.S. 479, 495 (1985).

Here, Plaintiffs allege they suffered injuries to their businesses or property “by reason

of” Osterman, Jerger and Nicholson’s actions in that they were forced to enter into costly side

agreements, lost the goodwill and patronage of their customers, lost their right to conduct a

lawful business, including the right to solicit business, and were either forced to forfeit their

liquor licenses or had their licenses revoked. ¶¶ 90-130. Therefore, it is clear that Plaintiffs allege

sufficient facts to state a claim against Defendants Osterman, Jerger and Nicholson under §

1962(d).


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D. Plaintiffs adequately state claims under 42 U.S.C. §§ 1983 and 1985(3) against Defendants Osterman, Jerger, and Nicholson

1. Plaintiffs allege “state action” as to Osterman, Jerger, and Nicholson by

alleging that they conspired with City Officials to harm Plaintiffs

Defendants argue that Plaintiffs have failed to allege “state action” as is required to state

a claim under 42 U.S.C § 1983. See Def. Mem. at 10. Defendants fail to cite a single case in

support. Accordingly, they ignore that a plaintiff may state a § 1983 claim against a private actor

by alleging that the private actor conspired with a state actor to deprive the plaintiff of his civil

rights. See Brokaw v. Mercer County, 235 F.3d 1000, 1016 (7th Cir. 2000). To do so, a plaintiff

must allege that: “(1) a state official and private individual(s) reached an understanding to

deprive the plaintiff of his constitutional rights, and (2) those individual(s) were willful

participants in joint activity with the State or its agents.” Id.

In Brokaw, the Seventh Circuit reversed a Rule 12(b)(6) dismissal of the plaintiff’s §

1983 claim against private actors. The court rejected the defendant’s argument that the

allegations of the private-state conspiracy were “too vague,” noting that the plaintiff had alleged

that the private actors conspired with a deputy sheriff to file false allegations of child neglect in

order to cause child services to remove the child and thereby cause the child’s parents to divorce.

Brokaw, 235 F.3d at 1016. The court explained that “it is important to remember that this case is

here on 12(b)(6) dismissal . . . [and] at this point the question is solely whether [the plaintiff] can

succeed under any set of facts.” Id. at 1017 (citation omitted).

Here, Plaintiffs have alleged that Osterman, Jerger, and Nicholson conspired with Mayor

Dickert and directly assisted him with the creation of a quid pro quo relationship with Tavern

League members: illegal campaign contributions to Dickert for City appointments to the Tavern

league. See ¶ 41. Plaintiffs have specified Osterman, Jerger, and Nicholson’s part in that


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conspiracy in detail. See ¶¶ 33, 41 (regarding Osterman); ¶¶ 34, 41 (regarding Jerger); ¶¶ 32, 41,

88 (regarding Nicholson). That conspiracy was created to, and did, rid downtown Racine of

minority-owned businesses through a series of injurious actions, including the imposition of

trumped-up fines and “side agreements” and the revocation or non-renewal of Plaintiffs’ liquor

licenses. See, e.g., ¶¶ 90–130 (specifying that “a plan was implemented to rid downtown Racine

of minority bars” and enumerating injuries to Plaintiffs as a result of said conspiracy). Plaintiffs

have further alleged at ¶ 43:

After becoming Mayor in 2009, Dickert, and other Defendants on his behalf, continued to accept bribes from Tavern League members and other businesses in Racine. Dickert and other Defendants continued to fraudulently report the monies in campaign finance reports and then deposit the monies into the campaign’s bank account. These practices continued up to and after the 2011 re-election campaign for Dickert, and likely continue to date.

Based on the allegation that the illegal financing continued post-election, it can

reasonably be inferred that Osterman, Jerger, and Nicholson assisted Dickert, as an elected

official, in the same illegal financing scheme for the purpose of, among other things, ridding

downtown Racine of minority-owned businesses. Plaintiffs are entitled to all such reasonable

inferences. See Cole v. Milwaukee Area Tech. Coll., 634 F.3d 901, 903 (7th Cir. 2011)

(explaining that, on a motion to dismiss, the court must “construe the . . . [c]omplaint in the light

most favorable to Plaintiff, accepting as true all well-pleaded facts and drawing all possible

inferences in his favor”).

In short, based on the allegations in the Complaint and reasonable inferences therefrom,

Plaintiffs have alleged that Osterman, Jerger, and Nicholson “reached an understanding” with

city officials, including Mayor Dickert, to target minority-owned bars in Racine and that they

furthered that objective by illegal financing for Mayor Dickert. Plaintiffs have therefore alleged

the requisite “state action” in support of their § 1983 claim. See Brokaw, 235 F.3d at 1016.


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2. Plaintiffs alleged the “Personal Involvement” of Osterman, Jerger, and Nicholson in Plaintiffs’ Constitutional Deprivations

Because of the similarity of Defendants’ argument here to the Municipal Defendants’,

Plaintiffs adopt here their opposition to the Municipal Defendants’ Motion to Dismiss regarding

the element of “personal involvement”. See Sect. V(D). Defendants’ argument that Plaintiffs

have failed to allege their “personal involvement” similarly fails. Indeed, Plaintiffs have alleged

that Osterman, Jerger, and Nicholson conspired with Mayor Dickert and directly assisted him,

through illegal financing and reporting, with the creation of a quid pro quo relationship with

Tavern League members. See ¶¶ 32–34, 41, 88. That conspiracy was created to, and did –

through the election of City officials and implementation of discriminatory policies ensured in

part by Defendants’ illegal financing – rid downtown Racine of minority-owned businesses

through a series of injurious actions, including the imposition of trumped-up fines and “side

agreements” and the revocation or non-renewal of Plaintiffs’ liquor licenses. See, e.g., ¶¶ 44,

141. Such allegations are far more than is required on the pleadings to allege that, at the very

least, Defendants “set in motion a series of events that [they] knew or should reasonably have

known would cause others to deprive [Plaintiffs] of [their] constitutional rights.” Hoffman v.

Kelz, 443 F. Supp. 2d 1007, 1012–13 (W.D. Wis. 2006). Accordingly, Defendants’ argument

must be rejected.

3. Plaintiffs sufficiently allege a claim under § 1985(3) against Osterman, Jerger, and Nicholson

Defendants argue that Plaintiffs’ § 1985(3) claim should be dismissed because of it does

not allege (1) “conduct violating the [P]laintiffs’ rights” with enough specificity; (2)

discriminatory animus; and (3) that Defendants’ conduct “had anything to do with the ultimate

loss of liquor licenses.” See Def. Mem. at 12–14. Defendants conspicuously sidestep an orderly


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analysis of the elements of a § 1985(3) conspiracy in an attempt to mischaracterize Plaintiffs’

allegations as “very limited . . . with respect to Osterman, Jerger, and Nicholson.” Def. Mem. at

13. But, as the analysis of each element of the § 1985(3) claim below shows, the allegations

against Osterman, Jerger, and Nicholson are specific, scathing, and far more than enough to state

a claim.

In order to state a claim under 42 U.S.C. § 1985(3), a plaintiff must allege (1) a

conspiracy; (2) for the purpose of depriving, either directly or indirectly, any person or class of

persons of the equal protection of the laws or of equal privileges and immunities under the laws;

and (3) an act in furtherance of the conspiracy; (4) whereby a person is injured. See, e.g.,

Bowman v. City of Franklin, 980 F.2d 1104, 1108–09 (7th Cir. 1992).

First, to plead a “conspiracy”, “the complaint must simply plead sufficient facts from

which a conspiracy can be inferred; the facts detailing the conspiratorial agreement can be

pleaded generally.” Quinones v. Szorc, 771 F.2d 289, 291 (7th Cir. 1985) (internal citations

omitted); see also Hampton v. Hanrahan, 600 F.2d 600, 621 (7th Cir. 1979) (modified on other

grounds) (“[T]he question whether an agreement exists should not be taken from the jury… so

long as there is a possibility that the jury can infer…that the alleged conspirators had a ‘meeting

of the minds’ and thus reached an understanding to achieve the conspiracy’s objectives.”).

Plaintiffs have alleged that Osterman, Jerger, and Nicholson conspired with and directly assisted

Defendant Dickert in a quid pro quo relationship with Tavern League members who were, in

turn, appointed to City positions upon Dickert’s election to mayor. See ¶¶ 32–34, 41, 88. As a

result, Mayor Dickert and those City officials implemented a discriminatory plan to rid

downtown Racine of minority-owned businesses – the very objective of the conspiracy and one

aided by Defendants’ illegal financing. See ¶¶ 41, 43 (regarding illegal financing); e.g., ¶ 90


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(regarding plan to rid downtown Racine of Minority bars). Plaintiffs further allege a conspiracy

between all Defendants, including Osterman, Jerger and Nicholson, to eradicate minority-owned

bars. See ¶¶ 140–45.

Second, the United States Supreme Court has stated that Plaintiffs must allege “some

racial, or perhaps otherwise class-based, invidiously discriminatory animus behind the

conspirators’ action.” See Griffin v. Breckenridge, 403 U.S. 88, 102 (1971). Throughout the

Complaint, Plaintiffs expressly allege that Defendants, including Osterman, Jerger, and

Nicholson, were motivated by racial animus. See, e.g., ¶ 2 (alleging that Defendants “have

conspired to drive local minority-owned establishments . . . out of Racine” and have done so

through “discriminatory practices”); ¶ 3 (“[T]he Defendants’ scheme to eliminate minority-

owned bars is also motivated by simple racism . . . .”); ¶ 46 (alleging that “the administrative

agencies,” whose members Osterman, Jerger, and Nicholson’s illegal financing and reporting

ensured were elected and appointed, “systematically imposed heightened burdens on minority

bars” to eliminate them); ¶ 141 (“The Defendants agreed to target, unjustly scrutinize,

discriminate, and unfairly burden the Plaintiffs’ establishments . . . solely because of their race

and the race of their patrons.”); ¶ 143 (“Race was and continues to be a driving factor behind the

Defendants’ disparate treatment of bar owners in downtown Racine.”). Plaintiffs’ extensive

allegations reveal that the Defendants’ argument regarding the lack of racial animus is

disingenuous. See Griffin v. Breckenridge, 403 U.S. 88, 103 (1971) (finding sufficient the

allegation that the defendants’ “purpose was to prevent the plaintiffs and other Negro-


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Americans, through force, violence and intimidation, from seeking the equal protection of the

laws and from enjoying the equal rights . . . .”).4

Finally, as to the third and fourth elements of the § 1985(3) claim, Defendants’ argument

that the Complaint “has no allegation that the Osterman, Jerger, Nicholson campaign financing

had anything to do with the ultimate loss of liquor licenses” grossly mischaracterizes the

Complaint. See Def. Mem. at 14. As an initial matter, Defendants’ assertion improperly limits

Plaintiffs’ injuries by describing them as solely related to the “loss of liquor licenses.” Plaintiffs

were subjected to numerous other injurious burdens, including extortionate “side agreements,”

trumped-up fines, “due process” hearings, and intense scrutiny from the City’s police

department, among other agencies. See, e.g., ¶¶ 108, 115 (alleging that Plaintiffs were forced to

enter into “side agreements”). Notwithstanding, Defendants’ actions are causally connected to

the loss of liquor licenses. As discussed throughout this brief, Plaintiffs have alleged that

Defendants Osterman, Jerger, and Nicholson conspired with and directly assisted Mayor Dickert,

through their illegal fundraising and reporting activities, in a quid pro quo relationship with

Tavern League members who were, in turn, appointed to City positions upon Dickert’s election

to mayor. See ¶¶ 32–34, 41, 88. As a result, Mayor Dickert and those City officials implemented

a discriminatory plan to rid downtown Racine of minority-owned businesses – the very objective

of the conspiracy aided by Defendants’ illegal financing. In conjunction with the foregoing

allegations, the 130-plus paragraphs of factual allegations regarding overt acts both in

furtherance of the conspiracy and in violation of Plaintiffs’ civil rights more than satisfy the

pleading standard associated with § 1985(3). See, e.g., Quinones, 771 F.2d at 291 (where alleged

4 Furthermore, Plaintiffs’ allegation that Defendant Nicholson informed another bar owner about how to discourage minorities from frequenting his establishment further evidences the discriminatory animus Nicholson harbored, irrespective of when it occurred in relation to Plaintiffs’ injuries. See ¶ 88.


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conspiracy was to “assault, batter, and intimidate” plaintiff, the court implied that allegations of

acts in furtherance such as “search[ing] for” and “locat[ing]” the plaintiff were sufficient).

Further notwithstanding, that Defendants’ action might not have directly or immediately

resulted in the loss of Plaintiffs’ liquor licenses does not preclude liability under § 1985(3).

Indeed, as long as Defendants conspired with one or more persons whose action(s), in turn,

caused injury to Plaintiff(s), Defendants are liable. See Griffin v. Breckenridge, 403 U.S. 88,

102-03 (1971) (noting that a plaintiff must only “assert that one or more of the conspirators . . .

did, or caused to be done . . . any act in furtherance of the object of the conspiracy . . . whereby

another was . . . injured . . . .”) (emphasis added) (internal quotations and citations omitted).

Plaintiffs here have alleged injurious acts by a number of Defendants’ co-conspirators, including

Mayor Dickert, to support liability under a conspiracy theory.

In short, Defendants’ argument is wholly untethered from the allegations in the

Complaint and the law of civil conspiracy under § 1985(3). Despite the fact that Defendants are

arguing against a conspiracy claim, they do not reference a single allegation as to any of

Defendants’ co-conspirators. Indeed, reference to such allegations would acknowledge the role

Defendants played in the scheme to rid downtown Racine of minority-owned taverns.

4. The Maldonados’ Claims Are Not Barred by the Statute of Limitations

As Defendants here have repeated the argument of the Municipal Defendants, Plaintiffs

adopt here their argument in opposition to the Municipal Defendants’ Motion to Dismiss

regarding the statute of limitations and the Maldonados’ claims. See Sect. V(C).


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IV. Conclusion For the foregoing reasons, Plaintiffs respectfully request this Court deny the Rule

12(b)(6) motion filed on behalf of Defendants Monte Osterman, Mary Jerger Osterman and

Douglas Nicholson and grant it such other futher relief as this Court deems just and proper.

Dated: June 27, 2014 Respectfully submitted,

KOHLER & HART, S.C.

By: /s/ Martin E. Kohler Martin E. Kohler, Esq. State Bar No. 1016725 735 N. Water Street, Suite 1212 Milwaukee, Wisconsin 53202 (414) 271-9595 Attorney for the Plaintiffs

SEGAL MCCAMBRIDGE SINGER & MAHONEY, LTD.

By: /s/ Brian H. Eldridge Steven A Hart, Esq. (ARDC No. 6211008) [email protected] Brian H. Eldridge, Esq. (ARDC No. 6281336) [email protected] 233 S. Wacker Drive, Ste. 5500 Chicago, IL 60606 (312) 645-7800 (312) 645-7711 Attorney for the Plaintiffs


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Response to Osterman / Nicholson motion to dismiss

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