Tuma v. Hawthorne Race Course, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

CHRISTINE TUMA, )

) No. 24-cv-8307

Plaintiff, )

v. ) Judge Jeffrey I. Cummings

)

HAWTHORNE RACE COURSE, INC., )

JIM MILLER, JOHN WALSH, )

DAVE WHITE, )

ILLINOIS RACING BOARD, )

DAWN FOLKER-CALDERON, )

BETH BUECHLER, )

THOMAS KELLEY, )

AND JOHN EDDY, )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff Christine Tuma, a veterinarian previously employed by Hawthorne Race Course,

Inc., filed this lawsuit against Hawthorne and others allegedly engaged in a racketeering

enterprise (namely, defendants Jim Miller, John Walsh, Dave White, the Illinois Racing Board,

Dawn Folker-Calderon, Beth Buechler, Thomas Kelley, and John Eddy), claiming that they

worked together to overturn her assessments of race horses as sick or lame in order to increase

the number of races and drive up the monetary pay out from wagers, which was then used to pay

defendants’ salaries and pay sums owed to the state and various municipalities. In plaintiff’s

amended complaint (“Complaint”), she brings claims arising under the Racketeer Influenced and

Corrupt Organizations Act (“RICO”), 18 U.S.C. §§1961–68, and state law.

Before the Court are the following pending motions to dismiss: Beth Buechler’s motion

to dismiss pursuant to Federal Rules 12(b)(6) and 9(b), (Dckt. #41); the Illinois Racing Board,

Dawn Folker-Calderon, Thomas Kelley, and John Eddy’s (the “State Defendants”) motion to

dismiss pursuant to Federal Rules 9(b), 12(b)(6), and 12(f), and supporting memorandum, (Dckt.

##42, 48); and Hawthorne Race Course, Inc. (“Hawthorne”), Jim Miller, John Walsh, and Dave

White’s (the “Hawthorne Defendants”) motion to dismiss pursuant to Federal Rules 12(b)(6) and

12(f), and supporting memorandum, (Dckt. ##44, 47). Among other things, defendants argue

that plaintiff fails to allege an injury to her “business or property” that was directly caused by the

alleged racketeering activity. For the reasons explained below, the Court agrees. Accordingly,

defendants’ motions to dismiss, (Dckt. ##41, 42, 44), are granted with respect to plaintiff’s

federal RICO claims, and the Court relinquishes jurisdiction over plaintiff’s state law claims.

I. LEGAL STANDARD

To survive a Rule 12(b)(6) motion to dismiss, a complaint must “state a claim to relief

that is plausible on its face.” Bell. Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is

plausible when the plaintiff “pleads factual content that allows the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged” and the complaint must “permit

the court to infer more than the mere possibility of misconduct.” Ashcroft v. Iqbal, 556 U.S. 662,

678, 679 (2009). When considering a motion to dismiss under Rule 12(b)(6), the Court

construes “the complaint in the light most favorable to the [non-moving party] accepting as true

all well-pleaded facts and drawing reasonable inferences in [the non-moving party’s] favor.”

Yeftich v. Navistar, Inc., 722 F.3d 911, 915 (7th Cir. 2013).

In addition, as the parties agree, Rule 9(b)’s particularity standard applies to fraud-based

RICO claims, such as those asserted by plaintiff. A RICO plaintiff must “at a minimum,

describe the predicate acts [of fraud] with some specificity and state the time, place, and content

of the alleged communications perpetrating the fraud,” Midwest Grinding Co. v. Spitz, 979 F.2d

1016, 1020 (7th Cir. 1992), and “notify each defendant of his alleged participation in the

scheme,” Goren v. New Vision Intern., Inc., 156 F.3d 721, 726 (7th Cir. 1998). Rule 9(b)’s

specificity requirement requires a plaintiff to allege “a reasonable inference that [the]

Defendants’ alleged misrepresentations led directly to [the plaintiffs’] employment-related

injuries.” Ratfield v. U.S. Drug Testing Lab’ys, Inc., 140 F.4th 849, 853 (7th Cir. 2025)

(dismissing RICO claim where complaint “does not explain how the employers learned of the

misstatements, what exactly they learned, from whom they learned of them, when they learned

of them, or whether they would have made the same decisions anyway.”).

II. BACKGROUND

The facts below are drawn from the allegations in Dr. Christine Tuma’s (“Tuma” or

“plaintiff”) Complaint, (Dckt. #39). Tuma’s lawsuit accuses all defendants except the Illinois

Racing Board (“IRB”)1 of participating in a scheme to race “lame and/or sick horses not legally

eligible to race,” to increase the amount wagered on races and to defraud the betting public and

regulators and “drive up the tax dollars and fees generated.” (Id. ¶¶43, 127–28). Defendants

Hawthorne and the IRB formed an enterprise, through which the remaining defendants “all of

whom are either employed by or associated with members of the Enterprise,” performed a

pattern of criminal activities during the Fall 2022 and Fall 2023 racing seasons. (Id. ¶2). Tuma

provides four categories of “criminal activities”: wire fraud; operating an illegal gambling

business in violation of federal law; illegal gambling under Illinois law; and retaliation against

Tuma for reporting truthful information relating to the possible commission of a federal offense

in violation of 18 U.S.C. §1513(e)).

A. Tuma’s Employment as an Association Veterinarian.

Tuma was jointly employed by the IRB and Hawthorne as an Association Veterinarian.

(Compl. ¶¶108, 110). Hawthorne, Miller, and Walsh set Tuma’s compensation, her working

1 The IRB is only a defendant in certain of Tuma’s state law claims.

conditions and rules, and had authority to fire her. (Id. ¶¶118, 120). Tuma’s job title—

“Association Veterinarian”—described one of the three categories of veterinarians present at the

racetracks: (a) State/Regulatory Veterinarians;2 (b) Association Veterinarians; and (c) Attending

Veterinarians. (Id. ¶67). State/Regulatory and Association Veterinarians both have specified

regulatory duties under state and federal law, (id. ¶¶69–71), whereas Attending Veterinarians are

private contractors paid by horse owners to provide medical care and do not have any regulatory

duties, (id. ¶68). State/Regulatory Veterinarians have the primary responsibility for “maintaining

the safety of racehorses before, during, and after a race.” (Id. ¶72). Association Veterinarians

“perform their duties at the request of and under the auspices of a State/Regulatory

Veterinarian.” (Id. ¶79).

At Hawthorne, Calderon was the State/Regulatory Veterinarian while Tuma and Buechler

were the two Association Veterinarians. (Id. ¶¶78–79, 153). Calderon, in her capacity as a

State/Regulatory Veterinarian and IRB employee, oversaw Tuma’s daily veterinary duties. (Id.

¶115).

B. Racing Qualifications for Horses.

All racehorses are required to undergo a pre-race examination conducted by either a

State/Regulatory Veterinarian or an Association Veterinarian. (Id. ¶83). If deemed unfit to race,

either because the horse is assessed as sick or lame (often referred to as “unsound”), the horse is

“scratched” and placed on a veterinarian’s list, which is then reported to the relevant regulatory

agencies. (Id. ¶¶88–92). Horses with “lameness are at a higher risk of developing secondary

injuries in previously healthy limbs due to altered locomotion.” (Id. ¶102). Tuma acknowledges

2 Illinois regulations use the terminology “State Veterinarians” whereas federal regulations use

“Regulatory Veterinarians,” so the Court uses “State/Regulatory Veterinarians” to avoid confusion and

because these veterinarians are concurrently regulated under both frameworks.

that there are “a myriad of medical conditions that can lead to lameness, and not all of them

directly correlate to a horse’s ability to perform well in a particular race.” (Id. ¶105).

If a State/Regulatory Veterinarian designates a horse as “sick,” the horse is scratched and

restricted from racing for at least seven days and if a State/Regulatory Veterinarian designates a

horse as “lame,” the horse is scratched and restricted from racing for at least fourteen days.

(Id. ¶91). If, for any given race, Hawthorne has fewer than six race-eligible horses—i.e., horses

that were not “scratched”—the race cannot collect any wagers from the betting public and

Hawthorne can cancel the race or proceed with the race as a “non-wagering exhibition race.”

(Id. at 4 n.3).

C. The Scheme to Increase the Number of Racing Wagers.

Before each day’s races, the two Association Veterinarians, Buechler and Tuma, would

each take responsibility for examining half of the horses running that day. (Id. ¶132). During

the 2022 racing meeting,3 Calderon authorized Tuma to scratch horses who were unqualified to

run and Tuma “routinely did so.” (Id. ¶135). Tuma would record her assessments in a “Track

Manager software” which transmitted horse assessments to the IRB and Horse Integrity and

Safety Authority (“HISA”), a “regulatory bod[y] operating under the auspices of the Federal

Trade Commission.”4 (Id. ¶¶36, 144). Tuma discovered that her assessments were “tampered”

with on multiple occasions insofar that her entries changed from “scratch lame” to “racing

sound” or “scratch sick.” (Id. ¶¶146–47). If Buechler deemed a horse lame, Tuma noticed that

instead of inputting the assessment herself and triggering the required two-week racing

3 “Each year the IRB approves a series of racing dates. The series of races dates approved by the IRB for

a particular racing season are referred to as a ‘meeting.’” (Compl. ¶28).

4 Prior to HISA’s establishment, Illinois horse racing was solely regulated by the IRB, the state

regulatory body. (Compl. ¶39).

restriction, she would provide horse trainers with the option of submitting the horse as “sick”

themselves. (Id. ¶¶146, 148). By providing this workaround, horses that were sick or lame

could “illegally run prematurely in Illinois horse races,” (id. ¶149), which would maximize the

number of races and thereby increase the number of wagers. According to Tuma, defendants

were motivated to conduct this “scheme” due to factors such as the decline of the horse racing

industry in Illinois, Hawthorne’s deteriorating financial condition, and their desire to fund

Hawthorne’s new “racino” (racetrack casino). (Id. ¶¶26, 240).

In the Fall of 2022, Tuma made a series of complaints to Buechler and Calderon about

the “illegal and fraudulent scratching of horses and the misclassification of horses as sick from

lame.” (Id. ¶150). In response, Calderon informed Tuma of a new protocol for future scratches:

if an Association Veterinarian believed a horse was lame or sick, she must call the second

Association Veterinarian for another opinion.5 (Id. ¶153). If there was still disagreement about

the horse’s condition, Calderon would decide the horse’s assessment in her capacity as

State/Regulatory Veterinarian. (Id.). Calderon also stripped Tuma of her authority to scratch

horses. (Id. ¶152).

Tuma alleges that her assessments were overturned a majority of the time during both the

2022 and 2023 racing seasons. During the Fall 2022 meeting, Tuma claims that she assessed at

least thirty-four horses as lame but was overturned by Calderon and Buechler in thirty of those

instances. (Id. ¶¶154–55). During the 2023 meeting, Tuma deemed at least fifty horses as lame,

but was overturned by Calderon and Buechler in at least forty-eight of those instances. (Id.

5 Because Tuma alleges that she and Buechler were the only Association Veterinarians, Tuma would be

required to call Buechler for the secondary opinion in every instance of disagreement.

¶¶166–67). The Complaint is devoid of allegations concerning those horses’ race performance

or any wagers placed on them.

D. Tuma Complains About the Horses’ Assessments.

On December 4, 2022, Tuma complained to Dr. Mary Scollay, the Chief of Science at the

Horse Integrity and Welfare Unit (“HIWU”), an independent agency “operating under HISA,” of

what she believed to be criminal activity regarding the assessment of the horses. (Id. ¶¶36, 161).

Dr. Scollay thereafter referred the matter to HISA, (id. ¶163), and no action was taken, (id.

¶164). On March 20, 2023, Tuma delivered a “comprehensive whistleblower letter” to both the

HISA and the IRB, (id. ¶173), describing: (a) unauthorized modifications of equine medical

records; (b) inappropriate/fraudulent transactions between trainers and veterinarians; and (c)

failure to comply with operating protocol and procedure; and “was explicit” that “an

investigation must ensue,” (id. ¶¶173–78). Lastly, on July 6, 2023, Tuma sent the IRB a video of

the horse Dastardly Deeds crossing its hind limbs during an examination “to illustrate the

egregiousness” of Calderon’s decision to let the horse race. (Id. ¶¶186–87).

E. Tuma is Terminated from Her Job as Association Veterinarian.

On July 11, 2023, almost four months after Tuma sent her whistleblower letter, Walsh

informed Tuma that she was terminated as a cost cutting measure. (Id. ¶198). After Tuma was

terminated, Miller texted “various other RICO Defendants” to explain that Tuma’s termination

was because “it didn’t make sense to have two pre-race vets for live racing days.” (Id. ¶200).

Tuma, however, claims that this was “pretext” and that she was actually terminated in retaliation

for disclosing the activities of the RICO enterprise and to “ensure that Dr. Tuma could not make

any further disclosures regarding the scheme to the federal regulators” because HISA regulators

were scheduled to be on site at Hawthorne the following two days. (Id. ¶¶193–94).

III. DISCUSSION

Tuma asserts federal RICO claims and various state law claims. Given that the Court’s

jurisdiction over Tuma’s state law claims hinges on the viability of her federal claims, the Court

begins with Tuma’s federal claims. For the reasons set forth below, the Court finds that Tuma

has failed to allege facts sufficient to plead an injury that was caused by the alleged pattern of

racketeering activity. Such an injury is an essential element of her RICO claim. Given this

shortcoming, the Court relinquishes jurisdiction over her state-law claims in accordance with

Seventh Circuit guidance and denies the Hawthorne Defendants’ motion to strike as moot.

A. Tuma Fails to State a RICO Claim

In her civil RICO claims, Tuma asserts that defendants have violated every section of 18

U.S.C. §1962. In particular, Tuma asserts that Hawthorne, Miller, Walsh, White, Buechler,

Calderon, Eddy, and Kelley violated Sections 1962(b), (c) and (d), which provide that it is

unlawful to have any interest or control in an enterprise engaged in a pattern of racketeering

activity, to be employed or associated with such an enterprise, or to conspire to violate any

provision of the RICO statute. Tuma also alleges that Hawthorne, Miller, Walsh, White, and

Buechler violated Section 1962(a), which provides that it is unlawful to receive income from a

pattern of racketeering activity.

1. Tuma’s Alleged Severe Emotional Distress and Harm to her Professional

Reputation Is Not an Injury to Business or Property for the Purposes of a Civil

RICO Claim.

Tuma must first satisfy threshold requirements to bring a civil RICO suit, which is where

the Court’s inquiry begins—and largely ends. In order to successfully sue under the civil

damage provision of RICO, 18 U.S.C. §1964(c), a plaintiff is required to show both that she was

(1) injured in her business or property and (2) that the defendants’ pattern of racketeering activity

was the factual and proximate cause of her injury. Holmes v. SIPC, 503 U.S. 258, 265 (1992);

RWB Servs., LLC v. Hartford Comp. Grp., Inc., 539 F.3d 681, 686 (7th Cir. 2008). The Supreme

Court has explained that these inquiries are largely intertwined because, “the compensable injury

necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern.”

Med. Marijuana, Inc. v. Horn, 145 S. Ct. 931, 940 (2025) (emphasis in original).

To satisfy the requirement, an “injury to business or property must be concrete, not

speculative,” and “the damages must be clear and definite.” Viehweg v. Ins. Programs Mgmt.

Grp., No. 24-1287, 2024 WL 4165078, at *1 (7th Cir. Sept. 12, 2024). The Seventh Circuit has

established that, should a plaintiff fail to adequately plead a business or property injury and

causation, dismissal is required under Rule 12(b)(6).6 Ryder v. Hyles, 27 F.4th 1253, 1256 (7th

Cir. 2022). When evaluating damages, “[t]he general tendency of the law, . . . is not to go

beyond the first step.” Holmes, 503 U.S. at 271 (cleaned up).

Plaintiff claims to have suffered “severe emotional distress resulting in physical injuries

and harm to her professional reputation,” (Compl. ¶243), in addition to her loss of employment.

Such an injury is not compensable under RICO. As the Supreme Court has recently made clear:

Ҥ1964(c) does not allow recovery for all harms. Instead, by explicitly permitting recovery for

harms to business and property, it implicitly excludes recovery for harm to one’s person.”

Medical Marijuana, 145 S.Ct. at 939; Brown-Austin v. Chambers-Smith, No. 1:23 CV 478, 2025

WL 2013585, at *5 (S.D.Ohio July 18, 2025) (“Recovery for physical injury or mental suffering

6 The Seventh Circuit previously classified injury and causation as jurisdictional requirements but has

since clarified that they are instead “non-jurisdictional element[s] of the cause of action Congress

supplied in §1984(c),” and that a plaintiff’s failure to adequately plead them results in dismissal under

12(b)(6), not 12(b)(1). Gress v. Reg’l Transportation Auth., No. 17 C 8067, 2024 WL 245185, at *6

(N.D.Ill. Jan. 23, 2024) (cleaned up).

is not allowed under civil RICO because it is not an injury to business or property.”) (cleaned

up).

2. Even presuming that Tuma’s loss of her job was an injury to her business or

property for civil RICO purposes, she has failed to allege that this injury was

directly caused by the alleged racketeering activity.

Tuma further alleges an injury based on the termination of her employment at

Hawthorne. For purposes of this motion, the Court presumes that the loss of one’s employment

constitutes an injury to “business or property” for purposes of RICO.7 Pursuant to the civil

RICO statute, “compensable RICO injuries must be caused by the commission of one or more of

the predicate acts.” Rylewicz v. Beaton Servs., Ltd., 698 F.Supp. 1391, 1395 (N.D.Ill. 1988),

aff’d, 888 F.2d 1175 (7th Cir. 1989). Tuma alleges a variety of predicate acts committed by

defendants: (a) wire fraud in violation of 18 U.S.C. §1955; (b) operating an illegal gambling

business in violation of federal law, 18 U.S.C. §1955; (c) illegal gambling in violation of Illinois

law, 720 ILCS 5/28-1; and (d) retaliation in violation of 18 U.S.C. §1513(e). (Compl. ¶¶204,

208–36). As explained below, Tuma has failed to sufficiently allege a connection between any

of the alleged predicate acts and her termination.

i. Three out of the four predicate acts have no connection with Tuma’s injury.

Three out of the four alleged predicate acts have nothing to do with Tuma’s termination.

Plaintiff appears to implicitly agree as her Complaint states that the RICO defendants committed

wire fraud “when they agreed to and engaged in a scheme to defraud bettors and regulators” and

to “induce bettors to wager on [the race-ineligible] horses, thereby depriving the bettors of their

money and increasing the funds obtained by the Enterprise.” (Id. ¶¶209, 213, 214, 217, 221)

7 The Supreme Court expressly declined to reach the question of whether the loss of employment

constituted an injury to “business or property” in the Medical Marijuana case. Medical Marijuana, 145

S.Ct. at 938.

(emphasis added). The wire fraud as alleged was therefore aimed at defrauding bettors and

regulators, not Tuma. The same goes for the predicate acts of operating an illegal gambling

business in violation of federal law and illegal gambling in violation of state law, both of which

are premised on the same actions as those described in relation to the wire fraud allegations.

(See id. ¶¶222–32). Tuma fails to establish that these predicate acts directly caused her firing.

The Court’s conclusion is not a close call. The Supreme Court has repeatedly

emphasized the importance of a direct relation between the injury asserted and the conduct

alleged. In Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (2006), the Supreme Court declined

to recognize a RICO cause of action where the plaintiff accused one of its competitors of

conducting a scheme to underpay taxes to New York State, claiming that it thereby had the

competitive advantage to lower its prices and cause harm to the plaintiff’s business. The Court

found that the plaintiff’s alleged harm (defendant offering lower prices) was “entirely distinct”

from the alleged RICO violation (defrauding the State of New York). Id. at 458. The direct

victim of the alleged scheme was the State of New York, who lost tax revenue and could

vindicate its own claims. Id. at 456–58.

The same is true here where the defendants’ alleged scheme targeted the betting public

and regulators, rather than Tuma. While Tuma claims her loss of employment is related to the

scheme, any relation is far too attenuated. This conclusion is bolstered by one of the motivating

principles behind RICO’s directness requirement, which considers the court’s attempt to

ascertain damages. Holmes, 503 U.S. at 269. “[T]he less direct an injury is, the more difficult it

becomes to ascertain the amount of a plaintiff’s damages attributable to the violation, as distinct

from other, independent, factors.” Id. Tuma alleges her termination was in retaliation for

reporting the RICO activities and to prevent her from further impeding them. (Compl. ¶199).

However, Tuma also alleges that Hawthorne was strapped for cash due to the decline in horse

racing popularity over the past several decades, and as a result, had difficulty paying fees and

monies owed. (Id. ¶¶58–63). Walsh told Tuma her termination was a cost-cutting measure and

texted other defendants as such. (Id. ¶¶198, 200). Tuma has thus doomed her Complaint by

alleging an “obvious alternative explanation” for her termination. See Wertymer v. Walmart,

Inc., No. 24-2001, 2025 WL 1802402, at *4 (7th Cir. July 1, 2025). While Tuma claims her

termination was due to retaliation, “it is as likely as not, and perhaps more so,” id. at *7, that her

termination resulted from Hawthorne’s efforts to cut costs. (See Compl. ¶198 (Tuma “was

informed that she had been terminated based on the pretext that her termination was a cost

cutting measure.”)). Her injury is “mere conjecture and speculation,” Wertymer, 2025 WL

1802402, at *9, where her loss of employment “could have resulted from factors other than

petitioners’ alleged acts of fraud,” see Anza, 547 U.S. at 459.

In Hemi Group, LLC v. City of New York, 559 U.S. 1, 9 (2010), the Supreme Court

further reiterated the importance of proximate causation in a RICO suit. There, the Court

rejected the City of New York’s attempt to sue an out-of-state online cigarette seller that failed to

submit forms listing New York customers, preventing New York City from identifying which

customers might have failed to pay taxes owed on their purchases. Id. The Supreme Court held

that the asserted injury, lost tax revenue, was caused by the New York City citizens’ failure to

pay taxes, rather than the cigarette seller’s failure to submit a list of customers, foreclosing any

RICO recovery against the cigarette seller. Id. at 10–11. “Allowing suits by those injured only

indirectly would open the door to ‘massive and complex damages litigation[, which would] not

only burde[n] the courts, but [would] also undermin[e] the effectiveness of treble-damages

suits.’” Holmes, 503 U.S. at 274, (1992), quoting Assoc. Gen. Contractors of California v.

California State Council of Carpenters, 459 U.S. 519, 545 (1983).

Furthermore, the Court cannot ascertain any group’s ascertainable damages here. The

Complaint is devoid of information relating to whether (1) people actually placed wagers on the

supposedly ineligible horses; (2) the ineligible horses’ performance; or (3) the amount of money

wagered and lost. As it stands, Tuma merely alleges in a conclusory fashion that the defendants’

conduct of promoting sick horses to race “goes well beyond mere disagreements with [her]

professional opinions,” and without any support, this does not create an injury. (See Dckt. #49 at

10).

To this point, Tuma provides two examples of horses she assessed as lame, but that

nonetheless raced. (Id. ¶¶105(a)–(b)). The horses (Imagine Gold and Dastardly Deeds) finished

second and third in their respective races despite Tuma’s “lame” assessment. (Id.). Tuma likens

the horses’ positive performance to professional athletes “playing through the pain,” such as

Peyton Manning’s performance during the Denver Bronco’s 2016 Super Bowl win despite neck

issues that ultimately required surgery, and Tiger Woods’ 2008 U.S. Open win despite a torn

ACL and leg stress fractures, among others. (Id. ¶¶106(a),(e)). However, these examples

undercut Tuma’s Complaint: anyone who bet on the Broncos in the 2016 Superbowl or on Tiger

Woods in the 2008 U.S. Open would have won money and not lost money. Moreover, if the

Court takes as true – as Tuma alleges – that lame horses such as Imagine Gold and Dastardly

Deeds may nonetheless perform well enough to place or show,8 then it must logically conclude

that purportedly “defrauded” bettors may win money despite placing wagers on ineligible horses.

8 The Court notes that it “is not required to ignore facts alleged in the complaint that undermine the

plaintiff’s claim.” Slaney v. The Int’l Amateur Athletic Federation, 244 F.3d 580, 597 (7th Cir. 2001).

In any event, even if bets on ineligible horses invariably led to losses, such damages

would be inflicted upon the immediate victims (the bettors), and not Tuma.

Time and again, we have reiterated that §1964(c)’s “by reason of” language

demands “some direct relation between the injury asserted and the injurious

conduct alleged.” The key word is “direct”; foreseeability does not cut it. Rather,

whenever the plaintiff ’s theory of causation requires moving “well beyond the first

step,” it “cannot meet RICO’s direct relationship requirement.”

Med. Marijuana, Inc., 145 S. Ct. at 945 (cleaned up).

In sum: Tuma’s damage—her employment termination (and “severe emotional distress

resulting in physical injuries and harm to her professional reputation,” (Compl. ¶243))—does not

directly flow from the alleged predicate acts of wire fraud, illegal gambling, and operating an

illegal gambling business. She fails to allege that her injury was directly related to the predicate

acts. In addition, and as discussed more below, prior to the enactment of the Sarbanes-Oxley

Act, interference with one’s employment was not considered a racketeering act and “courts

denied RICO standing to employees terminated for refusing to cooperate in an alleged

racketeering scheme.” DeGuelle v. Camilli, 664 F.3d 192, 201 (7th Cir. 2011).

ii. Tuma has failed to properly allege a predicate act premised on retaliation under

the Sarbanes-Oxley Act, 18 U.S.C. §1513(e).

The Court next turns to Tuma’s remaining predicate act: retaliation under the Sarbanes-

Oxley Act, 18 U.S.C. §1513(e). Pursuant to 18 U.S.C. §1513(e), it is a federal offense to

knowingly retaliate against anyone, “including interfere[ing] with the lawful employment or

livelihood of any person,” for providing truthful information “to a law enforcement officer”

related to the “commission or possible commission of any Federal offense.” Under RICO,

violations of Section 1513 may constitute “racketeering activity.” 18 U.S.C. §1961(1).

Again, here, Tuma alleges that she complained of defendants’ RICO activity to Dr. Mary

Scollay, Chief of Science at HIWU on December 4, 2022, (Compl. ¶161), who then referred the

matter to HISA, (Compl. ¶163). Tuma also delivered a “comprehensive whistleblower letter”

letter to both HISA and the IRB on March 20, 2023, (id. ¶173), describing: (a) unauthorized

modifications to horses’ medical records; (b) inappropriate/fraudulent transactions between

trainers and veterinarians; and (c) failure to comply with operating protocol and procedure; and

“was explicit” that “an investigation must ensue,” (id. ¶¶173–78).

As explained by the Seventh Circuit, “[r]etaliatory acts are inherently connected to the

underlying wrongdoing exposed by the whistleblower. Although there may not be the same

victims or results, in most cases retaliatory acts and the underlying scheme ‘are interrelated by

distinguishing characteristics and are not isolated events.’” DeGuelle, 664 F.3d at 201, quoting

H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 240 (1989). As discussed above,

the three other predicate acts are insufficient to allege a RICO claim with regard to Tuma. Even

assuming the acts could allege racketeering activity regarding other victims—an issue the Court

does not decide—Tuma’s RICO claim still fails, because she cannot meet Section 1513(e)’s

statutory requirements. Section 1513(e) requires that Tuma’s complaints be made to a “law

enforcement officer.” A “law enforcement officer,” for purposes of the statute, means “an

officer or employee of the Federal Government, or a person authorized to act for or on behalf of

the Federal Government or serving the Federal Government as an adviser or consultant – (A)

authorized under law to engage in or supervise the prevention, detection, investigation, or

prosecution of an offense; or (B) serving as a probation or pretrial services officer under this

title.” 18 U.S.C. §1515(a)(4).

Tuma argues that HISA qualifies as a law enforcement agency because it is authorized to

ensure compliance with the Horseracing Integrity and Safety Act, 15 U.S.C. §3502, et seq.

(Dckt. #49 at 13). Defendants disagree and argue that HISA merely assists the FTC in its

enforcement of the Horseracing Integrity and Safety Act. (Dckt. #53 at 9–10). The Court agrees

that Tuma’s letter to HISA and her complaint to Dr. Scollay at HIWU do not constitute

communications “to a law enforcement officer” for the purposes of establishing a RICO

predicate act.

HISA and HIWU (operating under HISA), are not government bodies but rather private

organizations operating under the FTC.9 As private entities, they do not constitute a “law

enforcement officer” for purposes of Section 1513(e).10 HISA was incorporated as a nonprofit

and recognized as a “private, independent, self-regulatory, nonprofit corporation. . . for purposes

of developing and implementing a horseracing anti-doping and medication control program and a

racetrack safety program for covered horses, covered persons, and covered horseraces.” 15

U.S.C. §3052(a). Notably, HISA was not created by the government, but rather was

incorporated under Delaware law, and retains permanent authority to appoint its own directors.

Nat’l Horsemen’s Benevolent & Protective Ass’n, 672 F.Supp.3d at 225; 107 F.4th at 438. It is

9 Tuma does not argue that any of her communications to the IRB constitute communications to a law

enforcement officer.

10 Three Circuit courts have similarly found that HISA is a private entity. Nat’l Horsemen’s Benevolent

& Protective Ass’n v. Black, 672 F. Supp. 3d 220, 225 (N.D. Tex. 2023), aff’d in part, rev’d in part, 107

F.4th 415 (5th Cir. 2024), cert. granted, judgment vacated sub nom. Texas v. Black, No. 24-465, 2025

WL 1787677 (U.S. June 30, 2025), and cert. granted, judgment vacated sub nom. NHBPA v. Hisa, Inc.,

No. 24-472, 2025 WL 1787680 (U.S. June 30, 2025); Oklahoma v. United States, 62 F.4th 221, 231 (6th

Cir. 2023), cert. denied, 144 S. Ct. 2679, 219 L. Ed. 2d 1298 (2024), reh’g granted and opinion vacated,

No. 23-402, 2025 WL 1787679 (U.S. June 30, 2025), and cert. granted, judgment vacated, No. 23-402,

2025 WL 1787679 (U.S. June 30, 2025); Walmsley v. Fed. Trade Comm’n, 117 F.4th 1032, 1039 (8th

Cir. 2024), cert. granted, judgment vacated sub nom. Walmsley v. FTC, No. 24-420, 2025 WL 1789398

(U.S. June 30, 2025).

All three circuit decisions have been vacated and remanded due to the recent decision of Fed. Commc’ns

Comm’n v. Consumers' Rsch., No. 24-354, 2025 WL 1773630, at *19 (U.S. June 27, 2025), which held

that the Universal Service Administrative Company, a private entity under the FCC, did not violate the

private nondelegation doctrine. Id. (“an executive agency exercising only executive power, plus (2) a

private entity exercising no government power (but merely giving advice) equals (3) a permissible

constitutional arrangement.”). The FCC v. Consumers’ Rsch. opinion says nothing to challenge the

determination of whether an entity is private or not, nor is that issue in dispute in the now-vacated circuit

court cases.

wholly subordinate to the FTC and all “adjudication decisions are not final until the FTC has the

opportunity to review them.” Oklahoma, 62 F.4th at 231. “All told, the Horseracing Authority

is subject to [the FTC’s] pervasive surveillance and authority, revealing that the Authority

operate[s] as an aid to the [FTC], nothing more.” Id. (cleaned up).

Because Tuma’s reports were not to a federal law enforcement officer, she cannot rely on

18 U.S.C. §1513(e) to establish a predicate act. Furthermore, Tuma’s Section1962(d) RICO

conspiracy claim is based on the same operative facts and must likewise fail. See Ratfield, 140

F.4th at 853 (“[B]ecause the RICO claims under 18 U.S.C. §1962(a), (b), and (c) were deficient

. . . Plaintiff’s RICO conspiracy claims under §1962(d), which are based on the same operative

facts, also fail.”); United Food & Com. Workers Unions & Emps. Midwest Health Benefits Fund

v. Walgreen Co., 719 F.3d 849, 856–57 (7th Cir. 2013) (same).

Accordingly, Tuma’s RICO claims must be dismissed. See Ryder, 27 F.4th at 1256.

3. Because Tuma’s RICO claim fails to allege an injury directly related to the

defendants’ conduct, the Court need not address defendants’ remaining arguments

concerning her civil RICO claims.

Because Tuma fails to meet the threshold requirement of alleging an injury directly

stemming from the alleged RICO activity, the Court does not need to reach the defendants’

remaining arguments related to Tuma’s RICO claims. This includes, inter alia, the State

Defendants’ argument that any federal claims against them are barred by qualified immunity,

(Dckt. #48 at 32); Lee v. Harris, 127 F.4th 666, 676 n.3 (7th Cir. 2025), and Buechler’s

argument that Tuma failed to plead her involvement, (Dckt. #41).11

11 The Hawthorne Defendants’ motion to strike portions of Tuma’s Complaint, (Dckt. #47 at 32), is moot

and is accordingly denied. If plaintiff should choose to amend her Complaint an additional time, she is

directed to reevaluate the need for certain portions of her claim in accordance with Rules 8, 9(b), and 11.

B. The Court Relinquishes Jurisdiction Over Tuma’s State Law Claims.

With the federal claims dismissed, only Tuma’s state law claims under the Illinois

Whistleblower Act, common law retaliatory discharge, and civil conspiracy remain. The

Seventh Circuit has embraced a “sensible presumption that if the federal claims drop out before

trial, the district court should relinquish jurisdiction over the state-law claims.” Williams Elecs.

Games, Inc. v. Garrity, 479 F.3d 904, 907 (7th Cir. 2007). Accordingly, the Court, in its

discretion, declines to exercise supplemental jurisdiction over plaintiffs’ pendent state law

claims. See Carlsbad Tech. Inc. v. HIF Bio, Inc., 556 U.S. 635, 639 (2009) (“A district court’s

decision whether to exercise [supplemental] jurisdiction after dismissing every claim over which

it had original jurisdiction is purely discretionary.”); Doxtator v. O’Brien, 39 F.4th 852, 867 (7th

Cir. 2022) (“Without any federal claims over which it had original jurisdiction, the district

court’s decision not to exercise supplemental jurisdiction over the pendent state law claims was

not an abuse of discretion.”). Accordingly, Tuma’s state law claims against defendants are

dismissed without prejudice.

CONCLUSION

For the reasons set forth above, defendants’ motions to dismiss, (Dckt. ##41, 42, 44), are

granted as to plaintiffs’ federal claims and those claims are dismissed without prejudice.

The Court relinquishes jurisdiction over plaintiffs’ state law claims and dismisses them without

prejudice. The Court grants plaintiff until August 15, 2025 to file a Second Amended

Complaint, to the extent she can do so consistent with this Memorandum Opinion and Order and

the dictates of Federal Rule of Civil Procedure 11.

DATE: July 25, 2025

I. Cummings □

United States District Court Judge

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