Petition for Writ of Certiorari — Rogers v. Liquid Air Corp.
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7
Dupreme Govt Ua
87-12 62 : FILED
! JAN 28 1988
IN THE ‘ er. IR.
Supreme Court of the United cS
OCTOBER TERM, 1987
JACK R. RoGERS, GEORGE MICHLIK and
D & R WELDING SupPLY COMPANY, an
Illinois Corporation, and RAYMOND E.
BRIDGES and BRIDGES WELDING SUPPLY &
THERAPY, INC.,
Petitioners,
Vv.
LIQUID AIR CORPORATION,
Respondent.
PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
FRANK H. BYERS II*
JOHN L. GREENLEAF, JR.
BYERS, BYERS & GREENLEAF, LTD.
SUITE 100, 333 E. PERSHING ROAD
DECATUR, ILLINOIS 62526
TELEPHONE: (217) 877-5353
Attorneys for Petitioners,
Jack R. Rogers, George Michlik and
D & R Welding Supply Company
WILLIAM A. McNuTT*
LOWE, MOORE, SUSLER, MCNuTT & WRIGLEY
250 N. WATER ST., P. O. BOX 1527
DECATUR, ILLINOIS 62525
TELEPHONE: (217) 429-5323
Attorney for Petitioners,
Raymond E. Bridges and Bridges
Welding Supply & Therapy, Inc.
“COUNSEL OF RECORD
PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203
bo
QUESTIONS PRESENTED
Whether the “‘pattern of racketeering activity’’ re-
quirement of the Racketeer Influenced and Corrupt
Organization Act, 18 U.S.C. §§1961, et seq., (here-
inafter called ‘‘RICO’’), is met where the alleged
predicate acts consisted of 16 allegedly false ship-
ping orders over a few months in a single-pur-
posed, close-ended scheme to defraud one victim?
. Whether defendants in a civil RICO action should
be afforded rights of criminal defendants, including
the criminal standard of proof for the alleged pred-
icate acts?
. Whether vicarious liability may be imposed under
Civil RICO to a corporation who did not exist until
after completion of all the allegedly false shipping
orders, except the final one?
Whether the verdict, as trebled, violates the Eighth
Amendment to the Constitution of the United
States of America?
. Whether the trial court used the appropriate meas-
ure of damages?
PARTIES
Jack R. Rogers, George Michlik and Raymond E.
Bridges are individual citizens of the United States
of America. D & R Welding Supply Company and
Bridges Welding Supply & Therapy, Inc. are Illinois
corporations, are not publicly owned, are not the sub-
sidiary of any other corporation, partnership or en-
terprise, and are not the parent corporations to any
subsidiaries. Jack R. Rogers is hereinafter referred
to as ‘Rogers’. George Michlik is hereinafter re-
ferred to as ‘‘Michlik”. Raymond E. Bridges is here-
inafter referred to as “Bridges”: D & R Welding
Supply Company is hereinafter referred to as “D &
R’’. Bridges Welding Supply & Therapy, Inc. is here-
inafter referred to as ‘Bridges Welding”’.
Liquid Air Corporation, is a Delaware corporation,
of which a corporation named L’Aire Liquide owns
10% or more of its stock. Petitioners are uninformed
of any other related interests of the respondent, if
any, that may be required to be disclosed pursuant
to Supreme Court Rule 28.1. Respondent is herein-
after referred to as “Liquid Air’.
TABLE OF CONTENTS
QUESTIONS PRESENTE
DP, rT
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OPINIONS BELOW
JURISDICTION
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STATEMENT UNDER RULE 28.4(b) ...........................
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REASONS FOR GRANTING THE PETITION .................
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CONCLUSION
APPENDIX
Opinion of the United States Court of Appeals,
dated November 18, 1987 ........ccccccceccccecssceceee.
Judgment of the United States Court of Appeals,
dated November 13, 1987 .o....c.cccccccccccecccceeeee.
Order of the United States Court of Appeals, dated
December 10, 1987 ............cccccccsccesccsesecscscseeee,
Order of the United States Court of Appeals, dated
December 10, 1987 ................cccccccccccccccscesceeees,
Page
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119
11-29
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DA.
24a
Second Amended Judgment of the United States
District Court, dated November 17, 1986 ......
Second Amended Judgment Order of the United
States District Court, dated November 14,
PO cckicsnshoulsdnsin teiseinnniatocaonuaasendeniacereneenties
Order of the United States District Court, dated
Cratotnnie 1A TOD siccsniisscsintscdisertocnttinsanasivcincsesen
Findings of Fact and Conclusions of Law of the
United States District Court, contained in ex-
cerpts from trial transcripts dated October 14,
1986, and November 14, 1986 ...........::cceseeeenes
Judgment of United States District Court, dated
December 16, 1GBG nnccceiesccscnreccsscssccosccsnasesceosess
Order of United States District Court, dated De-
mene 16, IGG cccccsccccccsessacsecconscnssasssccesconcssere
Fifth Amendment to the Constitution of the United
en os saemnndensinatennenin
Sixth Amendment to the Constitution of the United
ii OE no casesenadanmecnnnianns
Eighth Amendment to the Constitution of the
United States of America ....................ceseesesees
Section 1 of RICO, 18 U.S.C. §1961 ............eeeeeee
Section 2 of RICO, 18 U.S.C. $1962 ....022.200:001-..--.
Section 8 of RICO, 1S U.S.C. GIDC neccccnncsnscsovicsss
Gection 4 of RICO, 18 U.S.C. GISGE .....<csccccecsecs...
Index to the Trial Transcript ..............ccccsssseeeseeeeees
30a
32a
34a
35a
39a
4la
43a
43a
43a
dda
46a
48a
49a
dla
TABLE OF AUTHORITIES
A. CASE AUTHORITIES Page
Addington v. Texas, 441 U.S. 418 (1979) ............ 19,22
Aetna Life Insurance Co. v. Lavoie, 475 U.S. 813,
ee a ee Ne ID Sic seca cocaeneesca tke cas 25
Banker’s Life & Casualty Co. v. Crenshaw, 483
So.2d 254 (Miss. 1986), petition for cert.
OE, is SE UE Leccclsiedisintsanadoandinideens 27
Bank of America v. Touche Ross & Co., 782 F.2d
re ES Oee Mes BI sitcoaicencaciciactateneckacoasedsanes 12
Boyd v. Umited States, 116 U.S. 616, 29 L.Ed. 746,
Be Birk Ne CI sestsat bao codencndpaunciocndnasonercase 16,17
Electrical Workers v. Faust, 442 U.S. 42
ROVE scresnteccconatsakastousdcmtiosserteusineniand sale cocanea: 25
Haroco v. American National Bank & Trust Co. of
Chicago, 747 F.2d 384 (7th Cir. 1984) aff'd. 473
ps OE CIID” Spointceretccsentniscscscraamiacs oo 23
Herman and McClean v. Huddleston, 459 U.S. 375
IEEE ascacdecusansdedscniessaseaitatat gees te ca tie ee roe 7
Ingraham v. Wright, 480 U.S. 651 (1977) ............. 26
In re Winship, 397 U.S. 358 (1970) ................0000-. 18,22
Lees v. United States, 150 U.S. 476 (1883) ........... 21
Lipin Enterprises, Inc. v. Lee, 803 F.2d 322 (7th
URE BONED adakconiurcacnsdsnlocsccuuusciie seca meene 15
Marks v. Pannell Kerr Forster, 811 F.2d 1108 (7th
CA, BIE vctincéchinakicn ciccdlanictetae ee ee 15
Morgan v. Bank of Waukegan, 804 F.2d 970 (7th
CAE. SEINE cuaccchtendackacudtadsansCuniaed sane leans 12,13,15
One 1958 Plymouth Sedan v. Pennsylvania, 380 U.S.
Ge CR cirikcica sia aaa 16,17
Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479
D> Re ROR NT ot: 8,9,12,13,14,15,18,21,28 29
Smith v. Wade, 461 U.S. 30 (19838) ..............cce eee, 25
Stontosky v. Kramer, 455 U.S. 745 (1982) ............ 21
Superior Oil Company v. Fulmer, 785 F.2d 252 (8th
Coat. DINED sscooncitess sdsnsataiccenpnaranaitauanebesGeciciaea 12,14
vi
Table of Authorities Continued
Page
Tellis v. United States Fidelity & Guaranty Com-
pany, 805 F.2d 741 (7th Cir. 1986) vacated,
Gt Basa Gee CIOS) kcctotinanadaaen 20
B. STATUTES
SD Cats WROD incteicideastdccntcbactadeieanalnnel 6,17
BD Cs. Ee civeendtcctbsccndnseencinaansnnadien 6,17
SD Ue: ROO cnewrtiniibieadinsbeaase 3,11,20
56 Cas. Ge cntssiccencicediueiens 3,6,8,23,24
BD Ci. Ue ctcunecctemaacsdivnceubindechaaainnee 3
5B E.Akan Gee cecueeminbedaatemaaitoes 3,27
Be De UD ccccccencinccalsscebcaesuninabanenbbies 2
BS CG. BS De sacccctnsicscncasdoslsacncsaxtonacine 3
C. UNITED STATES CONSTITUTION
Uae” CR NES “© cercccecastcceschsanecienpinseciions 2,25
Us MRR CIE WU ccccsucecsacebuntstdicesntancade 3,25
ae: CORTE: ORIN” VEE - cascscentaatsvenconsinuhainanens 3,25
D. OTHER AUTHORITIES
Insurance Litigation Reporter, October, 1985
> FRING, | TOE snccscecsmntiecisatigndaan 26
Towers, Burden of Proof in RICO Actions;
Does Sedima Provide Guidance? The Nationa!
Law Journal, December 2, 1985, at page
26
Supreme Court of the Gnited States
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linois Corporation. and RAYMOND E
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BRIDGE aad BDarmrs WeELpING Supply &
SRIDGES and BRIDGES ELDING SUPPLY &
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Pet 4 OTLETS.
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Liq AIR CORPORA
Pp
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PETITION FOR WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
The petitioners, Jack R. Rogers, George Michiik
and D & R Welding Supply Company, Inc., an Illinois
Corporation, and Raymond E. Bridges and Bridges
Welding Supply & Therapy, Inc., respectfully pray
that a Writ of Certiorari issue to review the judgment
and opinion of the United States Court of Appeals
for the Seventh Circuit entered in the above-captioned
proceeding on November 13, 1987, as amended by
—
the Orders of December 10. 1987.
bo
OPINIONS BELOW
The opinion of the United States Court of Appeals
for the Seventh Circuit is reported at 834 F.2d 1297
(7th Cir. 1987) and is reprinted in the Appendix hereto
commencing at page la.
The Orders of the United States District Court for
the Central District of Illinois, Peoria Division, are
unreported. They are reprinted in the Appendix hereto
commencing at page 30a.
Reference to the Opinions and Orders below shall
be to the appropriate page of the Appendix and des-
ignated as “app. __’’. Reference to the record shall
be to the appropriate page of the volumes identified
in the chart in the Appendix hereto commencing at
page 5la.
JURISDICTION
The Judgment of the United States Court of
Appeals for the Seventh Circuit, which the petitioners
request this Court to review, was entered on Novem-
ber 13, 1987, and amended by Order dated December
10, 1987. A Petition for Rehearing with suggestion
for rehearing en banc was denied on December 10,
1987. This Petition for Writ of Certiorari is filed
within 90 days of the entry of that Order. The ju-
risdiction of this Court is invoked pursuant to 28
U.S.C. §1254(1).
CONSTITUTION
The Fifth Amendment to the Constitution of the
United States of America, U.S. Const., amend. V, is
set forth in the Appendix hereto at page 43a.
The Sixth Amendment to the Constitution of the
United States of America, U.S. Const., amend. VI, is
set forth in the Appendix hereto at page 43a.
The Eighth Amendment to the Constitution of the
United States of America, U.S. Const., amend. VIII,
is set forth in the Appendix hereto at page 43a.
STATUTES
Section 1 of RICO, 18 U.S.C. §1961, is set forth
in the Appendix hereto at page 44a.
Section 2 of RICO, 18 U.S.C. §1962, is set forth
in the Appendix hereto at page 46a.
Section 3 of RICO, 18 U.S.C. §1963, is set forth
in the Appendix hereto at page 48a.
Section 4 of RICO, 18 U.S.C. §1964, is set forth
in the Appendix hereto at page 49a.
STATEMENT UNDER RULE 28.4(b)
Since this proceeding draws into question the con-
stitutionality of the treble damage provision of
$1964(c) of the Racketeer Influenced and Corrupt Or-
ganization Act, 18 U.S.C. §1964(c), an act of Congress
affecting the public interest, and neither the United
States nor any agency, officer or employee thereof is
a party, it is noted that 28 U.S.C. §2403(a) may be
applicable. The courts below have not certified to the
Attorney General the fact that the constitutionality
of such act of Congress was drawn into question.
STATEMENT
1. At trial the following facts were introduced into
evidence:
D & R is an illinois corporation of which two of
its shareholders are Jack R. Rogers and George Mich-
lik. D & R distributes welding supplies and com-
pressed gases in Central Illinois and is involved in
interstate commerce. (app. 2a). Some compressed
gases distributed by D & R are bottled in steel cyl-
inders. D & R both purchased and leased these cy]l-
inders. (app. 2a, Transcript V.5 pp.4, 5,18,14,19-29).
Initially, D & R was a distributor for Liquid Air.
As part of the distributor arrangement, D & R leased
steel cylinders from Liquid Air. After notification of
price increases. D & R terminated its distributorship
with Liquid Air effective September, 1981. Under the
cylinder lease agreement with Liquid Air, D & R was
obligated to return leased gas cylinders to Liquid Air,
pay rent on the outstanding cylinders, or pay the then
current cost of replacement, allowing for ordinary
wear and tear, for any cylinders not returned or ac-
ounted for. (app. 2a, Plaintiff’s Exhibit No. 25-1).
In March, 1982, Liquid Air requested D & R to
start turning in its compressed gas cylinders. D & R
had approximately 5,196 cylinders on lease from Liq-
uid Air at that time. By November 1, 1982, D& R
had returned 2,199 cylinders. From November 1,
1982, until May 25, 1983, 19 Liquid Air shipping or-
ders were prepared which reflected all but 12 of the
remaining cylinders being returned by D & R. Of the
said 19 shipping orders, 15 were executed on behalf
of D & R by Rogers, Michlik or Mr. Oliver Penny-
packer. Additionally, one shipping order was not
signed by a representative of D & R. Liquid Air al-
leged that these 16 shipping orders which reflect a
total return of 2,681 cylinders were false. Two of the
three remaining shipping orders were executed for D
& R by its regular drivers, Mr. Gene Wilder and Mr.
Robert Bauer. Liquid Air did not contest the validity
of those shipping orders. The final shipping order was
a paper transfer on the records of Liquid Air of 40
cylinders from the account of D & R to the account
of A.W. Moore Welding Supply Co., the validity of
which was not contested. (Transcript V.5, p.83; V.14,
p.116; Plaintiff’s Exhibit No. 1; V.19, p.8; V.18, p.40;
V.14, pp. 128-129)
Liquid Air claimed that Ray Bridges, an employee
of Liquid Air responsible for handling all of the pa-
perwork at Liquid Air’s Peoria distribution center,
falsified the said 16 shipping orders so that it would
appear that D & R had returned all outstanding cy]-
inders when, in fact, the returns were not made. Each
shipping order involved a transaction using the mails
twice and one wire transfer. Liquid Air further
claimed that in return for Bridges’ efforts, Rogers
and Michlik arranged to set Bridges up in his own
welding business in Peoria, Illinois. Liquid Air claimed
that Rogers and Michlik supplied Bridges Welding
with personnel, capital and welding products. (app.
2a, 3a).
In August, 1983, a Liquid Air employee compared
Liquid Air’s inventory of cylinders on paper to the
physical inventory taken in Peoria for July, 1983. The
comparison revealed a discrepancy of 3,307 cylinders
between those that Liquid Air counted and those that
its internal documents registered. (app. 3a).
2. Procedural History in the Trial Court.
On April 4, 1984, Liquid Air filed a Complaint
against Rogers, Michlik, D & R, Bridges and Bridges
Welding. The ensuing jury trial lasted approximately
two and one-half weeks on the nine-count Amended
Complaint. The jury found against all defendants on
the RICO counts, Counts I, II, III and IV (18 U.S.C.
§1962(a),(b),(c) and (d) respectively), and assessed com-
pensatory damages in the amount of $750,000.00. The
predicate acts alleged in the RICO counts were mail
fraud, 18 U.S.C. §1341, and wire fraud, 18 U.S.C.
§1348. In Count V, a common law conversion count,
the jury found against all defendants and assessed
$350,000.00 in actual damages and punitive damages
in the following amounts: $25,000.00 against D & R;
$15,000.00 against Bridges Welding; $10,000.00
against Rogers; $10,000.00 against Michlik; and
$5,000.00 against Bridges. On Count VI, a claim for
breach of fiduciary duty by Bridges, the jury found
against Bridges and assessed $4,000.00 in actual dam-
ages and $1,000.00 punitive damages against him. In
Count VII for inducement to breach a fiduciary re-
lationship, the jury found against Rogers, Michlik and
D & R, and assessed actual damages in the amount
of $750,000.00 and punitive damages in the amount
of $10,000.00 against D & R, Rogers and Michlik.
The jury found in favor of Bridges on Counts VIII
and IX. (app. 3a, 4a).
Pursuant to the Order of the U.S. Magistrate, the
defendants had held certain Liquid Air cylinders in
its possession until after the trial at which time the
defendants returned 530 cylinders to Liquid Air pur-
suant to the order of district court. The district court
ordered that the replacement value of the 530 cyl-
inders be subtracted from the total trebled damage
award. (Trial Court Docket No. 82; Transcript V.20,
p.34; V.21, p.13).
The Petitioners have timely raised the issues pre-
sented to this Court and each of the courts below.
3. Proceedings in the Court of Appeals:
The court of appeals affirmed the judgment focus-
ing much of its opinion on the issues raised in this
petition.
First considered by the court was whether civil
RICO proceedings are quasi-criminal in nature. The
court of appeals determined that civil RICO proceed-
ings are not quasi-criminal reasoning that a civil RICO
defendant does not face imprisonment nor does the
defendant face the collateral consequences associated
with conviction of a criminal offense. (app. 7a). Al-
though the court of appeals acknowledged that a civil
RICO defendant does face the opprobrium of being
labeled a racketeer, it determined that such a label
was not sufficiently stigmatizing to warrant criminal
protections. Therefore, the court rejected the criminal
standard of proof and other rights asserted by the
defendants. (app. 7a).
Alternatively, proof by a preponderance of the evi-
dence was considered by the court to be sufficient
for a finding of liability under civil RICO. (app. 8a).
In so holding, the court stated that this Court’s opin-
ion in Herman and McClean v. Huddleston, 459 U.S.
375 (1983) foreclosed the use of the standard of proof
of clear and convincing evidence. The court could dis-
cern no reasonable basis for distinguishing a federal
securities claim based on fraud from a civil RICO
claim based on fraud. Therefore, the court did not
apply the clear and convincing standard. (app. 7a, 8a).
Next addressed by the court of appeals was the
question of proof sufficient to satisfy the requirement
of a pattern of racketeering activity. The court of
appeals noted the conflict among the various circuits
concerning whether the predicate acts must be a part
of two separate schemes before a pattern could be
shown or whether they can be part of a single scheme.
(app. 10a). The court of appeals found that there was
a single scheme which lasted seven months and de-
frauded a single victim by the preparation of 19 ship-
ping orders, each resulting in the use of the mails
and the use of the wire service. The court held that
a repeated infliction of economic injury upon a single
victim in a single scheme is sufficient to establish a
pattern of racketeering activity for the purposes of
civil RICO. (app.10a, 11a).
Furthermore, the court held that the jury instruc-
tion concerning the phrase ‘‘pattern of racketeering
activity” did not need to advise the jury of the con-
tinuity prong of this Court’s test of “‘pattern of rack-
eteering activity’ as announced in Sedima, S.P.R.L.
v. Imrex Co., Inc., 473 U.S. 479 (1985). The jury in-
struction that the court approved on “pattern of rack-
eteering activity’”’ omits categorically any reference to
continuous, continuing, or threat of continuing activity.
The court of appeals determined that continuity refers
solely to the duration of the predicate acts. (app. 19a).
The application of the doctrine of respondeat su-
perior was also considered by the court. Under
§1962(a) and (b) of RICO, Bridges Welding was found
liable applying what the court called “vicarious lia-
bility’’. The court stated that the shipping orders were
completed by Bridges, acting as president of Bridges
Welding, despite the fact that the falsification of ship-
ping orders allegedly done by Bridges were all ac-
complished prior to Bridges Welding doing any
business and, except for one shipping order, before
Bridges Welding was ever incorporated. (app.14a,
16a).
Finally, the court determined that under civil RICO
the measure of damages is the harm occasioned as a
result of the predicate acts and held that the contract
between D & R and Liquid Air determined the dam-
ages for all the defendants. (app.2la). The court re-
jected the measure of damages as the fair-market-
value of the cylinders not returned. (app. 22a). The
court of appeals further rejected the challenge to the
trebled damage provision of RICO as violative of the
Eighth Amendment proscription against excessive
fines. The court stated that although there is some
sense in which RICO trebled damages are punitive,
they are largely compensatory. (app. 23a).
SUMMARY OF ARGUMENT
This case brings to issue the conflict among the
circuit courts of appeal concerning the requirement
of a “pattern of racketeering activity’ following this
Court’s decision in Sedima, S.P.R.L. v. Imrex Co.,
Inc., 473 U.S. 479 (1985). A single, close-ended scheme
of short duration with a single purpose to defraud
one victim is not a “‘pattern of racketeering activity’’
which should invoke the heavy civil penalties of RICO.
Contrary to the Eighth Circuit, in the instant deci-
sion, the Seventh Circuit has joined the Eleventh Cir-
cult and abandoned the ‘“‘continuity’’ requirement
necessary to establish a “‘pattern of racketeering ac-
tivity’’ as articulated in Sedima, supra.
The potential operation and effect of RICO upon
defendants in a civil action to enforce RICO warrant
the protections provided by federal criminal law. In-
10
deed, the financial loss to the defendants in civil RICO
is greater than the financial punishment which could
be inflicted upon conviction of the underlying predi-
cate acts. This, together with the social stigma of
being labeled a ‘“‘racketeer’’, and the penal nature of
the civil RICO as envisioned by Congress, mandates
the enhanced protections not usually accorded civil
defendants.
Bridges Welding, a corporation peripheral to the
alleged scheme, should not be held vicariously liable
for the actions of a minority shareholder and officer,
which were committed prior to its incorporation.
Moreover, under RICO, there could not be a “‘pattern
of racketeering activity’ during the time period when
the agency-principal relationship existed. Contrary to
the holding of the Seventh Circuit, a corporation, to
be found liable under the statute, must more than
just ‘‘benefit’’ from the RICO violation.
The verdict, as trebled, violates the prohibition
against the imposition of excessive fines under the
Eighth Amendment to the Constitution of the United
States of America.
Finally, the wrong measure of damages was used
by the courts below. An error in the underlying judg-
ment is magnified by the trebling of damages in RICO.
It is not sufficient to look solely to the perceived loss
to the plaintiff, but the court must also look at the
nature of the defendants actions and the context in
which the claimed losses have arisen. Here the gra-
vamen of the action is the common law tort of con-
version, and, thus, the appropriate measure of
damages is the fair-market value of the property con-
verted. :
1]
REASONS FOR GRANTING THE PETITION
This case raises several important issues with re-
spect to the civil enforcement .of RICO, 18 U.S.C.
§1961, et seq. Specifically, it concerns the rights a
defendant should have under RICO, the required
proofs the plaintiff must present, and the kind of
damages recoverable. These issues effect plaintiffs and
defendents in civil RICO actions throughout the coun-
try and are arising with increasing frequency. In deal-
ing with these issues the circuit courts of appeal have
rendered several recent inconsistent decisions. None
of the issues raised in this Petition have yet been
decided by this Court.
In this case, Liquid Air has been able to parlay a
claimed conversion, by otherwise legitimate business-
man, of property ‘with a fair-market value of $293,000
into a judgment in excess of $2.8 million. Under the
provisions of RICO, the plaintiff transformed this
case, which ordinarily would have been presented as
a breach of contract or, at most, a common law fraud
action under State law, into a federal court action
with catastrophic results. Affirmance of the judgment
in this case will rob the defendants of the labor of
their lifetime and leave them virtually pennyless. Left
unchecked, plaintiffs, who may have absolutely no in-
terest in pursuing the organized criminals which RICO
was designed to combat, are flocking to the federal
courts for the windfall profits available under RICO
for what would otherwise be ordinary contract dis-
putes and common law fraud claims.
12
I. A CLOSE-ENDED SINGLE SCHEME TO DEFRAUD
ONE VICTIM THROUGH 16 ALLEGEDLY FALSE
INVOICES OVER THE COURSE OF A FEW
MONTHS DOES NOT SATISFY RICO’S REQUIRE-
MENT OF A “PATTERN OF RACKETEERING AC-
TIVITY”
Sharply, this case focuses the conflicting positions
taken by different circuit courts of appeal as to the
“pattern of racketeering activity’’ requirements of
RICO. In Sedima, S.P.R.L. v. Imrex Co., Inc., 473
U.S. 479 (1985), this Court noted that a “pattern of
racketeering activity’’ required more than just two
acts committed within a ten year period. Those acts
must have ‘“‘continuity plus relationship which com-
bines to produce a pattern.” (Sedima at 473 U.S. page
496 N.14; app. 10a). Application of that definition,
however, has produced different results.
The Eighth Circuit Court of Appeals requires that
the predicate acts compromise more than one scheme
before a pattern of racketeering activity may be
found. See Superior O1l Company v. Fulmer, 785 F.2d
252 (8th Cir. 1986). (app. 10a). On the other hand,
the Eleventh Circuit Court of Appeals requires only
two or more predicate acts to be committed in a
single scheme in order to establish a pattern of rack-
eteering activity. See Bank of America v. Touche Ross
& Co., 782 F.2d 966 (11th Cir. 1986). (app. 10a).
Different still was Morgan v. Bank of Waukegan, 804
F.2d 970 (7th Cir. 1986), where the Seventh Circuit
opted for a middle course between what it termed as
the two extremes. In order to be sufficiently contin-
uous to constitute a pattern of racketeering activity,
it said, ‘‘the predicate acts must be ongoing over an
identified period of time so that they can be fairly
13
viewed as constituting separate transactions, Le.,
“transactions ‘somewhat separated in time and
place.’’”’’’ (Morgan, 804 F.2d at page 975). Morgan
identifies relevant factors, with no one factor nec-
essarily determinative, to be considered in determin-
ing whether a pattern exists.
In this case, the Seventh Circuit has held that if
the alleged fraud can be perceived as a repeated infl-
iction of economic injury, even if done to just one
victim and in the course of one scheme, that is suf-
ficient to establish a ‘“‘pattern of racketeering activ-
ity’ for civil RICO purposes. Under the Seventh
Circuit’s analysis here, the finding of distinct injuries
determines the pattern requirement. If there are dis-
tinct injuries, this opinion mandates the finding of a
pattern of racketeering activity. This opinion effec-
tively forecloses inquiry into the other factors listed
in the Seventh Circuit’s own decision in Morgan. In
this case, the Seventh Circuit has now adopted the
position of the Eleventh Circuit that a plaintiff needs
only to show that two or more predicate acts are
committed in the performance of a single scheme.
This expansive view of RICO conflicts with this
Court’s admonishment in Sedima that two of anything
does not make a pattern.
The abandonment of the rational of Morgan by the
Seventh Circuit is underscored by their approval of
the erroneous jury instruction used in this case to
define ‘‘pattern of racketeering activity.’’ The Sev-
enth Circuit approved a jury instruction on “pattern
of racketeering activity’ that omits categorically any
reference to continuous, continuing or threat of con-
tinuing activity. In so doing, this Seventh Circuit’s
opinion highlights the abandonment of the first part
14
of the two-part test established by this Court in Se-
dimé. Emphasis by the Seventh Circuit is now on the
relationship between the predicate acts and no longer
is there a separate continuity requirement as estab-
lished in Sedima. No more clearly could the issue of
what constitutes a pattern of racketeering activity
and the conflicting positions of the various circuit
courts of appeal be presented to this Court than is
presented in this case.
Whether there is one injury or more than one injury
in a single scheme to defraud a single victim is really
a matter of perception. In this case the alleged scheme
was to show, by false paperwork, all leased cylinders
returned by D & R when, in fact, they had not been
returned. By its terms, the scheme required several
false papers to be prepared. At the same time, how-
ever, it was a close-ended scheme. It had a single
purpose, and it was necessarily terminated when all
leased cylinders were shown to be returned. Thus,
whether there was one injury or more than one injury
depends upon one’s view of the transaction. Since D
& R had all the cylinders at the beginning of the
alleged scheme and then had al] the same cylinders
at the end of the alleged scheme, one could just as
certainly state that there was but one injury to Liquid
Air by the failure to return the leased cylinders. On
the other hand, one could break the scheme down
into separate actions and declare each paper trans-
action to be a separate and distinct injury. Such was
done by the Seventh Circuit in its opinion.
This dissection of a single close-ended scheme to
defraud one victim in order to find a pattern of rack-
eteering activity dramatically conflicts with the Eighth
Circuit’s decision in Superior Oil Co. v. Fulmer, su-
15
pra, and even with the Seventh Circuit’s prior deci-
sion in Morgan. The Seventh Circuit, like the Eleventh
Circuit, is no longer concentrating civil RICO on the
offenders who pose a threat of continuing activity or
those who regularly commit such crimes as it once
had. See, Lipin Enterprises, Inc. v. Lee, 803 F.2d
322 (7th Cir. 1986) at page 324 and Marks v. Pannell
Kerr Forster, 811 F.2d 1108 (7th Cir. 1987) at page
1111.
Earlier, the Seventh Circuit had established the def-
inition of “‘continuity”’ in Morgan based upon Sedima.
The Seventh Circuit stated that continuity ‘would
embrace predicate acts occuring at different points in
time or involving different victims’. Morgan, 804 F.2d
at page 975.
Now, the Seventh Circuit has abandoned that def-
inition. The Seventh Circuit stated in the instant opin-
ion that “continuity refers instead to the duration of
the predicate acts.’’ (app.19a). Thus, continuity now
refers to the period of time, or duration, over which
the predicate acts occurred in the same scheme rather
than to the existence of other schemes, other victims
or predicate acts which occurred at different points
in time. The search for continuity is now an internal
quest rather than an external one. The Seventh Cir-
cuit abandoned the ‘“‘continuity’’ requirement estab-
lished by this Court in Sedima.
Il. DEFENDANTS IN A CIVIL RICO ACTION
SHOULD BE AFFORDED RIGHTS OF CRIMINAL
DEFENDANTS INCLUDING THE CRIMINAL
STANDARD OF PROOF FOR THE ALLEGED
PREDICATE ACTS.
This case uniquely raises the issue of whether, and
to what extent, constitutional criminags#aw protections
16
should apply to the civil enforcement of RICO,
wherein the gravamen of the Complaint alleges crim-
inal conduct, provides for punishment damages and
irreparably stigmatizes the defendants who are found
liable. The rights afforded criminal defendants, i.e.
for a twelve-member jury, the privilege against self-
incrimination, the standard of proof for conviction of
beyond a reasonable doubt, and the presumption of
innocence all apply to the predicate acts alleged in
this case when criminally prosecuted. They should also
apply in the private enforcement of RICO.-
Whether an action is quasi-criminal or civil must
be decided by the court based upon the statute and
its potential operation and effect upon the defendants
charged under it. Boyd v. United States, 116 US.
616, 29 L.Ed. 746, 6 S.Ct. 524 (1885).
This Court stated in Boyd, supra, at 29 L.Ed. page
752:
As, therefore, suits for penalties and forfeitures.
incurred by the commission of offenses against
the law, are of this quasi criminal nature, we
think that they are within the reason of criminal
proceedings for all the purposes of the Fourth
Amendment of the Constitution. ...
To determine whether an action is quasi-criminal,
this Court in One 1958 Plymouth Sedan v. Pennsyl-
vania, 380 U.S. 693 (1965), compared the defendant’s
potential punishment for a criminal conviction of the
predicate act with the potential financial loss which
the defendant could incur under a statute which based
liability upon the predicate act. After noting that the
civil punishment was potentially greater than the
criminal punishment, this court in One 1958 Plymouth
Sedan, supra, held that the ‘‘civil’’ action was quasi-
criminal.
In this case the plaintiff alleged that the defendants
committed mail fraud (18 U.S.C. §1341) and wire fraud
(18 U.S.C. §1343). Each individual defendant may be
punished upon conviction of wire fraud or mail fraud
to pay a fine of up to $1,000.00 and/or sentenced for
up to 5 years of incarceration. The corporate
defendants may incur a fine of up to $1,000.00 upon
conviction of mail fraud or wire fraud.
The fair-market value of the cylinders converted is
$292,643.40 (the judgment in Count V, less the pre-
judgment interest added by the triai court). Never-
theless, each judgment entered on the RICO Counts
is $2,168,062 plus attorney’s fees, for a total of
$2,546,232.58. Certainly, imposing a liability of
$2,253,589.18 upon the defendants in excess of the
value of the property taken (or in other words, almost
9 tines the fair-market value of the property taken)
can only be considered an additional penalty for com-
mission of the underlying predicate acts. Compara-
tively, the corporate defendants could only be fined
$1,000.00 for mail and wire fraud, yet, under RICO
they have an additional punishment of $2,253,589.18.
The individual defendants could be imprisoned un-
der the wire fraud and mail fraud statutes up to five
years in addition to the fines imposed. Individual lib-
erty has an incalculable value. However, a penalty of
$2,253,589.18 defies the grasp of most ordinary cit-
izens. Under Boyd and One 1958 Plymouth Sedan,
RICO is a quasi-criminal act in its potential operation
and effect upon the defendants.
18
In Sedima, this Court discussed the quasi-criminal
nature of RICO, but was not directly faced with the
issue, at 473 U.S. pages 492 and 493:
Finally, to the extent an action under §1964(c)
might be considered quasi-criminal, requiring pro-
tections normally applicable only to criminal pro-
ceedings, cf. One 1958 Plymouth Sedan v.
Pennsylvania, 380 U.S. 698, 14 L.Ed.2d 170, 85
S.Ct. 1246 (1965), the solution is to provide those
protections, not to ensure that they were previ-
ously afforded by requiring prior convictions.
(Footnote omitted).
Civil enforcement of RICO internally requires a
quasi-criminal nature. This Court in Sedima stated at
473 U.S. at page 488:
[T]he predicate acts involve conduct that is
‘chargeable’ or ‘indictable’, and ‘offense[{s]’ that
are ‘punishable,’ under various criminal statutes.
§1961(1). As defined in the statute, racketeering
activity consists not of acts for which the
defendant has been convicted, but of acts for
which he could be.
If liability is predicated upon acts for which the
defendants could be criminally convicted, how can it
be determined whether these acts could result in a
conviction unless the trier of fact makes those find-
ings based upon the same criteria as in a criminal
proceeding?
There is a recognizable social stigma which attaches
in criminal proceedings which plays a prime impor-
tance to the defendants. In In re Winship, 397 U.S.
358 (1970), this Court stated at 397 U.S. pages 363
and 364:
The accused during a criminal prosecution has at
stake interests of immense importance, both be-
cause of the possibility that he may lose his lib-
erty upon conviction and because of the certainty
that he would be stigmatized by the conviction.
Accordingly, a society that values the good name
and freedom of every individual should not con-
demn a man for commission of a crime when
there is reasonable doubt about his guilt.
The stigma society places on a defendant in certain
‘civil’ actions is an important consideration in ana-
lyzing the nature of the proceeding as this Court
stated in Addington v. Texas, 441 U.S. 418 (1979), at
441 U.S. pages 425 and 426:
Moreover, it is indisputable that involuntary com-
mitment to a mental hospital after a finding of
probable dangerousness to self or others can en-
gender adverse social consequences to the indi-
vidual. Whether we label this phenomena ‘stigma’
or choose to call it something else is less impor-
tant than that we recognize that it can occur and
that it can have a very significant impact on the
individual.
A defendant in a RICO case risks the social stigma
of being labeled a ‘‘racketeer’’, a pejorative term
which connotes organized crime. Our society has more
than a minimal interest in the outcome of private civil
RICO suits. The size of the potential penalty is stag-
gering and far exceeds the criminal fines which could
be imposed. The social stigma of being labeled a
‘‘racketeer’’ effects every-day life. Potential penalties
have -a devastating economic effect on business
defendants. In this case the plaintiff and two of the
20
defendants are competitors. Unbridled RICO claims
may reduce competition by driving competitors from
the market place. Indeed, RICO was designed to pre-
vent the infiltration of legitimate businesses by or-
ganized crime. Instead, RICO is turning ordinary
contract disputes (as is this case) into quasi-criminal
proceedings. Society’s interests should be considered
in applying RICO. The plaintiff already has the ability
to obtain compensation for damages it suffers under
traditional tort and contract claims. RICO does not
provide recovery for a victim that otherwise would
go uncompensated. RICO only adds a penalty against
the defendant to the compensation the victim re-
ceilves.
In order to impose civil liability under RICO a vic-
tim must show that the defendant committed two
predicate acts within a ten-year period. If RICO was
designed to compensate victims, why did Congress
not provide for compensation of the first victim? Why
must the first victim wait up to ten years to see if
the defendant commits another predicate act? The an-
swer is obvious. Congress did not intend RICO to be
a compensation act for victims. Congress intended to
punish the repeat offender, the habitual criminal. The
civil RICO action is truly an enhanced penalty for the
commission of certain offenses enumerated in 18
U.S.C. §1961. Congress sought to punish the repeat
offenders of those offenses and deter further com-
mission of those offenses. In Tellis v. United States
Fidelity & Guaranty Company, 805 F.2d 741 (7th Cir
1986) vacated, 107 S.Ct. 3255 (1987), the Seventh
Circuit stated at page 746:
This Court has previously held that a treble dam-
age antitrust suit is most appropriately charac-
21
terized as an action for a penalty. ... (citations
omitted.) Because a civil RICO claim is best char-
acterized as an action for treble damages, and
such an action is penal in nature, Electronic Re-
lays, 610 F.Supp. at 652, ...
Professor Towers of the Marquette University Law
School wrote in Burden of Proof in RICO Actions:
Does ‘Sedima’ Provide Guidance? The National Law
Journal, December 2, 1985, at page 26:
Closer scrutiny yields the conclusion that many
civil RICO actions are quasi-criminal in nature
because they contain those punitive sanctions and
stigma characteristic of criminal actions that nor-
mally require criminal protections, and therefore,
make the criminal burden of proof most appro-
priate.
99
It is well established that in certain “‘civil’’ cases,
where the gravamen is unquestionably criminal (or
penal) in nature, that the defendant has certain pro-
tections which would also be afforded to him as if
the case were tried as a criminal trial. See Lees v
United States, 150 U.S. 476 (1898).
Plaintiffs in civil actions to enforce RICO should be
required to prove the commission of the predicate acts
beyond a reasonable doubt. RICO does not expressly
set forth the standard of proof to be utilized in the
private enforcement action as authorized. Tradition-
ally, therefore, what standard of proof should be ap-
plied is a question left to the courts. Stontosky v.
Kramer, 455 U.S. 745 (1982). In Sedima, this Court
did not decide the issue of the proper standard of
proof to be used in the civil enforcement of RICO.
Applying a “‘civil’’ label to an action does not deter-
22
mine the proper standard of proof to be applied. Ad-
dington v. Texas, supra, and In re Winship, supra.
In this case, the quasi-criminal and penal nature of
the civil enforcement of RICO constitutionally man-
dates the beyond a reasonable doubt standard of
proof. At the very least, the ‘“‘clear and convincing”
standard of proof for fraud actions should have been
applied. Further, the defendants should have been
granted a twelve-member jury and other rights af-
forded criminal defendants.
III. BRIDGES WELDING SHOULD NOT BE VICAR-
IOUSLY LIABLE UNDER RICO
This case raises an important issue concerning the
use of “‘vicarious liability’’ to hold corporations, pe-
ripheral to the alleged scheme, liable for the acts of
the principals. Bridges Welding was not incorporated
until approximately the time the alleged scheme
ended, and it never did any business during the ex-
istence of the alleged scheme.
At trial, it was undisputed that Bridges Welding
did not have a corporate existence until its incorpo-
ration on April 20, 1983. (Transcript V. 5, p.80). The
first meeting of shareholders was held on May 7,
1988. (Transcript V. 5, p.80). Bridges Welding had
no bank accounts and did not commence business until
the latter part of July or early August, 1983. (Tran-
script V. 12, p.33). Moreover, Ray Bridges received
only a minority interest in Bridges Welding. (Tran-
script V. 12, pp.25-26, 36-38; V. 5, p.80). The majority
shockholders were not defendants in this case, nor
where they charged with the commission of any pred-
icate acts or with conspiracy to commit any of the
predicate acts. (Plaintiff’s Exhibits 61-69). Except for
Ray Bridges, no other officer or director was a
23
defendant in these proceedings. Likewise, except for
Ray Bridges, no such person was alleged to have been
a part of the alleged scheme, and, as to Ray Bridges,
he was a defendant only for acts allegedly done prior
to Bridges Welding’s commencement of business in
July-August, 1983.
In addition, it was clear from the testimony at trial
that the last alleged fraudulent act occurred on or
within a few days of May 25, 1988. (Plaintiff's Ex-
hibits 1 and 2-1 through 2-61). Bridges Welding did
not use Liquid Air cylinders and, under the scheme
charged, could not have had possession of any Liquid
Air cylinders.
For Bridges Welding, the Seventh Circuit did not
reach the question of whether subsections (c) and (d)
of §1962 of RICO should have been affirmed. Instead,
the Seventh Circuit applied ‘‘vicarious liability”’ to af-
firm the judgment against Bridges Welding under
subsections (a) and (b) of §1962 which involved the
anti-dated acts of Ray Bridges. (app. 16a). Application
of vicarious liability was proper, the court held, be-
cause Bridges Welding had “‘benefit from the viola-
tions’.
Assuming that Bridges Welding was vicariously li-
able for the acts of Ray Bridges, only one alleged
predicate act occurred after the date of incorporation.
Accordingly, for RICO purposes, there could be no
“pattern of racketeering activity’ during the time
period that Bridges Welding stood respondeat supe-
rior to Ray Bridges.
There are inherit dangers in applying RICO vicar-
iously to corporations. Haroco v. American National
Bank & Trust Co. of Chicago, 747 F.2d 384 (7th Cir.
24
1984), affd. 473 U.S. 606 (1985). Here, a completely
legitimate business has been held liable under RICO.
It now owes treble damages for the alleged acts of
its minority shareholder and officer. Such a result was
never intended by Congress.
The Seventh Circuit Court of Appeals has also
broadened the language of subsections (a) and (b) of
§1962 of RICO. Subsection (a) requires proof that
income from the racketeering activity be used or in-
vested in the enterprise. Whereas, subsection (b) re-
quires that the defendant, through a pattern of
racketeering activity, acquire or maintain an interest
in the enterprise. The holding in this case, namely
that the corporation need only “‘benefit’’ from the
violations, greatly expands that statutory language of
the RICO Act. It broadens the RICO Act to include
many non-intended defendants under the statute. This
unwarranted and broad expansion of the RICO Act
warrants this Court’s review of the Seventh Circuit’s
decision.
IV. THE VERDICT, AS TREBLED, VIOLATES THE
CONSTITUTIONAL PROTECTION OF THE
EIGHTH AMENDMENT
This case raises an important constitutional issue
concerning statutory ‘“‘punitive’’ damages. The pur-
poses served by RICO punitive damages are: First,
to punish the defendants for their acts, and second,
to warn and to deter others from the same type of
conduct. These are the classic objectives of criminal
law. As set forth above, ironically, the defendants in
this case are punished economically more severely
than if this action would have been prosecuted crim-
inally. The defendants face a punitive damages award
almost nine times that of the fair-market value of the
cylinders allegedly converted without the protection
of the Fifth and Sixth Amendments, and in contrav-
ention of the Eighth Amendment to the Constitution
of the United States. The Eighth Amendment pro-
hibits the imposition of “‘excessive fines’. This Court
has looked with disfavor on punitive damage awards
in numerous civil cases.
In 1979, this Court stated in Electrical Workers v.
Faust, 442 U.S. 42 (1979) at page 50, that ‘“‘because
juries are accorded broad discretion both as to the
imposition and amount of punitive damages, ... the
impact of these windfall recoveries is unpredictable
and potentially substantial’.
Justice Rehnquist, writing for himself, Chief Justice
Warren Burger and Justice Powell, stated in Smith
v. Wade, 461 U.S. 30 (1983), at page 59:
Moreover, although punitive damages are ‘‘quasi-
criminal,” ... their imposition is unaccompanied
by the types of safeguards present in criminal
proceedings. .. . [T]he alleged deterrence achieved
by punitive damage awards is likely outweighed
by the costs—such as the encouragement of un-
necessary litigation and the chilling of desirable
conduct—flowing from the rule, at least when the
standards on which the awards are based are ill-
defined.
This Court stated in dicta in Aetna Life Insurance
Co. v. Lavoie, 475 U.S. 813, 89 L.Ed.2d 823 (1986)
at 89 L.Ed.2d page 837:
(T]hat a $3.5 million punitive damage award is
impermissable under the Excessive Fines Clause
of the Eighth Amendment; ... these arguments
raise important issues which, in an appropriate
setting must be resolved.
26
The treble damage provision of RICO imposed a
catastrophic effect upon the defendants herein in vi-
olation of their Eighth Amendment protection against
excessive fines. (See dissent in Ingraham v. Wright,
430 U.S. 651 (1977)). The Insurance Litigation Re-
porter, October, 1985, through February, 1986, issue
at page & presents a background on the Eighth
t is noteworthy that the brief debate on the
Excessive Fines Clause at the First Congress im-
mediately followed the debts in the House over
the proposed Fifth Amendment. Because the Fifth
Amendment contained language that could have
been construed to apply cutside the context of
criminal proceedings, Representative Lawrence
proposed, and the House adopted, language to
confine the clause ‘to criminal cases.’ If the fra-
mers of the Eighth Amendment had intended that
its clauses not apply in civil proceedings, a similar
amendment presumably would have been pro-
posed.
Moreover, an examination of the historical an-
tecedents to the Excessive Fines Clause supports
the contention that it should be applied to pu-
nitive damage awards. The lineage of the Ex-
cessive Fines Clause can be traced to the
‘excessive amercement’ provision of the Magna
Carta. ‘Amercements’ were additional punish-
ment for defendants in civil cases in Thirteenth
Century Engiand. In 1689, the English Bill of
Rights incorporated the ‘excessive amercement’
principle of the Magna Carta. That provision was,
in turn, incorporated into Article I, §9 of the
Virginia Declaration of Rights, and then into the
27
Eighth Amendment. Thus, punitive damages are
of the same character as the remedies that the
linear antecedents of the Eighth Amendment in-
tended to limit.
Currently this Court is considering Banker’s Life
& Casualty Co. v. Crenshaw, 483 So.2d 254 (Miss.
1986), petition for cert. granted, No. 85-1765. That
case presents the question of the constitutionality of
common law punitive damages. For the same reasons
raised in Banker’s Life and as set forth above, this
Court should grant a Petition for Writ of Certiorari
to review the constitutionality of the treble damages
awarded to plaintiff.
V. THE WRONG MEASURE OF DAMAGES WERE
USED BY THE COURTS BELOW
Nowhere in RICO does the statute define the cor-
rect measure of damages. Congress directed only that
‘‘fa]lny person injured in his business or property by
reason of a [RICO] violation ... may sue therefor . .
and shall recover threefold the damages he sustains
and the cost of the suit, including a reasonable
attorney's fee.’ 18 U.S.C. §1964(c) (Emphasis added)
(app. 49a). This case, with its full record, presents
this Court with the unique opportunity to determine
the correct measure of damages for civil RICO.
In RICO, an error in the underlying judgment is
magnified by the trebling of damages. Here, for ex-
ample, the difference in the measure of damages (be-
tween conversion and contract amount the court used)
is approximately $430,000. After trebling, it com-
pounds to approximately $1.29 million. Such an error
in the verdict has, and will continue to have, dev-
astating effects upon the RICO defendants, making
28
them the ‘“‘victim’”’ of this federal action rather than
the alleged perpetrators.
The prevailing philosophy of determining RICO
damages should be that the ‘“‘compensable injury nec-
essarily is the harm caused by predicate acts suffi-
ciently related tc constitute a pattern. .. .”’ (Sedima,
473 U.S. at page 497). Accordingly, the plaintiff would
recover only to the extent that he has been injuried
by the conduct constituting the violation. (Sedima, 473
U.S. at page 496).
By what measure the plaintiffs were damaged is a
question of law that should not be decided by the
perceived need for uniformity. The varying nature of
the enumerated predicate acts defy a uniform char-
acterization for a singular measure of damages. In-
stead, the court should be directed to the gravamen
of the action.
In this case, the Seventh Circuit looked to what it
perceived as the loss of the plaintiff to determine the
appropriate measure of damages. (app. 22a). This
measure of damages, however, ignores the second part
of this Court’s admonition in Sedima, 473 U.S. at
page 497, that the measure of damages under civil
RICO is the harm occasioned as a result of the pred-
icate acts. One must not look solely to the perceived
loss of the plaintiff as the Seventh Circuit did, but
only to those losses which proximately flow from the
predicate acts. In other words, one cannot look solely
to the perceived loss of the plaintiff, but one must
also look to the nature of the defendants’ actions and
the context in which the claimed losses have arisen,
i.e. the gravamen of the complaint.
In this case, under respondent’s theory, cylinders
were allegedly not returned by D & R. Hence, the
gravamen of the action is the common law tort of
conversion. It follows that the appropriate measure
of damages is the fair-market value of the property
converted. The trial court and Seventh Circuit re-
jected this measure of damages.
The overly-broad interpretation of the damages un-
der RICO applied by the court of appeals in this case,
which permit a plaintiff to recover threefold losses
which are not viewed in the context of the alleged
actions of the defendants, conflicts in principle with
this Court’s decision in Sedima, as well as the nu-
merous federal and state court decisions establishing
the measure of damages in other similar conversion
cases. This reason alone warrants that this Court re-
view the Seventh Circuit’s decision.
CONCLUSION
This case presents this Court the opportunity to
rule on many important issues concerning the civil
enforcement of RICO with the benefits of a full and
complete record. For the foregoing reasons, it is re-
spectfully requested that a Writ of Certiorari issue
to review the decision of the Court of Appeals for
the Seventh Circuit.
Respectfully submitted,
FRANK H. BYERS II”
JOHN L. GREENLEAF, JR.
BYERS, BYERS & GREENLEAF, LTD
333 East Pershing Road
Suite 100
T om 149 lilsn . RY
Decatur. Illinois 62525
WILLIAM A. McCNvuTT**
LOWE, MOORE, SUSLER. MCNUTT &
WRIGLEY
250 North Water Street, P.O. Box 1527
| - _ lisea me ‘fs »s
Decatur, Illinois 62523
“Counsel of Record for Jack R.
Rogers, George Michlik and D & R
Welding Suppiy Company
ounsel of Record for Raymond E
| Bp ageess Wold;
Amr 4 | ayy " 7. 9
Bridges and Bridges elding Suppliv &
APPENDIX
la
APPENDIX A
3n the
United States Court of Appeals
For the Seventh Circuit
Nos. 86-3001 and 86-3046
LIQUID AIR CORPORATION,
Plaintiff-Appellee,
v.
JACK R. RoGers, GEORGE MICHLIK and
D & R WELDING SuPPLY COMPANY,
an Illinois Corporation, and
RAYMOND E. BRIDGES and
BRIDGES WELDING SuppLy & THERAPY, INC.,
Defendants-A ppellants.
Appeals from the United States District Court
for the Centra! District of Illinois, Peoria Division.
No. 84-C-1110—Michael M. Mihm, Judge.
ARGUED JUNE 2, 1987—DecIDED NOVEMBER 18, 1987
Before BAUER, Chief Judge, CoFFEy, Circuit Judge,
and ESCHBACH, Senior Circuit Judge.
BAUER, Chief Judge. This case raises several issues
with respect to civil enforcement of the Racketeer Influ-
enced and Corrupt Organizations Act, 18 U.S.C. § 1962
(“RICO”), including (1) what standard of proof should gov-
ern civil RICO actions; (2) whether a series of fraudulent
acts in a single scheme, with a single victim, satisfies
RICO’s requirement of a “pattern of racketeering activ-
ity;” (3) to what degree may vicarious liability be imposed
2a
under civil RICO; (4) the appropriate measure of damages
under RICO; and (5) whether any set-off should be sub-
tracted before or after trebling the damage award under
RICO. D & R Welding Supply Company (“D & R”) leased
compressed gas cylinders from Liquid Air Corporation
(“Liquid Air’’). Through a series of fraudulent shipping
orders, D & R made it appear that it had returned over
3,000 cylinders to Liquid Air. A jury found all defendants
guilty of civil RICO and pendent state torts. In addition
to the RICO issues, defendants challenge the sufficiency
of the evidence, various evidentiary rulings and various
jury instructions. For the reasons that follow, we affirm
“the judgment entered in all respects.
‘
D & R is a partnership operated by Jack R. Rogers
and George Michlik to distribute welding supplies. D & R
operates out of Decatur, Streator and Urbana, Illinois and
is involved in interstate commerce. Among other supplies,
it distributed compressed gas. In order to distribute the
gas, D & R leased both compressed gas and compressed
gas cylinders from Liquid Air. As a result of price in-
creases, D & R gave notice that it would terminate its
distributorship with Liquid Air, effective September, 1981.
Under its Distributor Agreement with Liquid Air, D & R
was required to return leased gas cylinders to Liquid Air,
pay rent on outstanding cylinders and pay the replace-
ment value for any cylinders not returned or accounted
for. The monthly rental fee then in effect was $2.25 per
cylinder; the average replacement cost per cylinder was
$150.
D & R was slow in returning the cylinders after it ter-
minated its distributorship. By August, 1982, D & R had
returned only 1,570 of 5,000 outstanding cylinders. At this
point, Liquid Air began to charge D & R its higher, non-
distributor rental rate. Just after Liquid Air raised its
rate, Michlik and Rogers became more creative in their
business dealings. They enlisted the aid of Ray Bridges,
an employee of Liquid Air responsible for handling all
paperwork at Liquid Air’s Peoria Distribution Center.
Under the scheme, Bridges would falsify documents so
that it would appear that D & R had returned all outstand-
ing cylinders. D & R would thus save the renta! and re-
placement fees while retaining the cylinders for its own
use. The scheme was accomplished through nineteen sepa-
rate falsified shipping orders documenting returns that
had never been made. Each shipping order involved using
the mails twice and one wire transfer.
In return for Bridges’s “‘work’’, Michlik and Rogers ar-
ranged to set Bridges up in his own welding business in
Peoria. They supplied Bridges with personnel, capital and
welding products. Michlik and Rogers derived an addi-
tional benefit from this pay-off to the scheme. Michlik and
Rogers were prevented from openly expanding their busi-
ness into Peoria because of a non-competition agreement
with A. W. Moore Welding in Peoria (‘‘Moore Welding’’).
By setting Bridges up in the welding business in Peoria,
Michlik and Rogers could not only bilk Liquid Air of its
cylinders, but could also circumvent the non-competition
agreement through their participation in Bridges Welding.
In August, 1983, Liquid Air employee Lauren “Bud’’
Sage became suspicious after hearing that Ray Bridges
was seen removing Liquid Air cylinders from the Liquid
Air Peoria Distribution Center, supposedly with Sage’s
okay. Sage initiated an investigation to determine whether
D & R had actually returned the cylinders it had leased
from Liquid Air. Sage compared Liquid Air’s inventory
of cylinders on paper to the physical inventory taken in
Peoria for July, 1983. The comparison revealed a discrep-
ancy of 3,307 cylinders between those that Liquid Air ac-
tually possessed and those that its internal documents
registered.
On April 4, 1984, Liquid Air filed a five-count complaint
against Michlik, Rogers, D & R, Ray Bridges and Bridges
Welding Supply (“Bridges Welding’’), which was amended
in September, 1984 to include two additional counts. The
complaint charged separate RICO violations of 18 U.S.C.
§ 1962(a), (b), (c) and (d) (Counts I & II, III and IV); con-
4a
version (Count V); breach of fiduciary duty by Ray Bridges
(Counts VI and IX); inducement to breach a fiduciary rela-
tionship by Michlik, Rogers and D & R (Count VII); and
conversion of miscellaneous business supplies by Ray
Bridges and Bridges Welding (Count VIII). The predicate
acts for the RICO counts were mail fraud, 18 U.S.C.
§ 1341, and wire fraud, 18 U.S.C. § 1343.
The ensuing jury trial lasted approximately two and one-
half weeks. The jury found against all the defendants on
the RICO counts and on one count of conversion. In ad-
dition, the jury found that Ray Bridges had breached his
fiduciary duty to Liquid Air in participating in the scheme
and that Michlik, Rogers and D & R had induced the
breach. The jury returned a verdict for defendant Ray
Bridges on the breach of fiduciary duty and conversion
associated with the miscellaneous missing business sup-
plies. The jury assessed $750,000 in compensatory dam-
ages on all four RICO counts.! On the conversion count,
the jury assessed $350,000 in actual damages and punitive
damages in the following amounts: $25,000 against D & R;
$15,000 against Bridges Welding; $10,000 against Rogers;
$10,000 against Michlik; and $5,000 against Bridges. On
the claim that Ray Bridges had breached his fiduciary
duty, the jury assessed $4,000 in actual damages and
$1,000 in punitive damages against Ray Bridges. For in-
ducing Ray Bridges to breach his fiduciary duty, the jury
assessed $750,000 in actual damages and $10,000 each in
punitive damages against D & R, Michlik and Rogers. Some-
time after the trial, the defendants returned 530 Liquid
Air cylinders and the court ordered that the rental and
replacement value of the 530 cylinders be subtracted from
the total trebled damage award.
Defendants charge numerous bases for overturning the
jury verdicts, which may be grouped as follows: (1) wheth-
1 Liquid Air’s actual recovery was limited to the greatest single
recovery under any one count, i.e., treble damages under any of
the RICO counts.
er the district court used the proper standard of proof;
(2) whether the evidence supports a finding that defen-
dants engaged in a “pattern of racketeering activity;”
(3) whether i, is a proper basis for civil liabil-
ity; (4) whether Bridges Welding was properly found vi-
cariously liable for conversion or RICO; (5) whether the
evidence was sufficient to support the adverse jury ver-
dicts; (6) objections to various evidentiary rulings; (7) ob-
jections to various jury instructions; (8) damages. We ad-
dress each of defendants arguments in turn.
Il.
RICO
The Racketeer Influenced and Corrupt Organization Act,
18 U.S.C. §§ 1961-1968 (“RICO”), was designed to pre-
vent organized crime from gaining a stronghold in legiti-
mate businesses. Statement of Findings and Purpose,
Organized Crime Control Act of 1970, Pub. L. 91-452, 84
Stat. 922, 922-23 (1970). The Act prohibits various forms
of infiltration of legitimate business “enterprises” involved
in interstate commerce through a “‘pattern of racketeer-
ing activity.” 18 U.S.C. § 1962. Section 1964 of the Act
provides for civil suits arising out of § 1962 RICO
violations. ;
Standard of Proof
Defendants argue that civil RICO proceedings are quasi-
criminal in nature, and that the court therefore should
have imposed a higher standard of proof than a mere pre-
ponderance of the evidence. In Sedima, S.P.R.L. v. Imrex
Co., Inc., 473 U.S. 479 (1985), the Supreme Court left
undecided the question of the proper standard of proof
to be used in civil RICO cases. Jd. at 491. Still, there
is a strong suggestion in Sedima that the appropriate
standard of proof in civil RICO is proof by a preponder-
ance of the evidence. The court noted:
We are not at all convinced that the predicate acts
must be established beyond a reasonable doubt in a
proceeding under § 1964(c). In a number of settings,
conduct that can be punished as criminal only upon
proof beyond a reasonable doubt will support civil
sanctions under a preponderance standard.
Id. Since Sedima, many lower courts have addressed the
issue and have reached the conclusion that proof by a
preponderance of the evidence is sufficient to establish
a civil violation of section 1962. See Wilcox v. First In-
terstate Bank of Oregon, 815 F.2d 522, 531 (9th Cir. 1987);
Cullen v. Margiotta, 811 F.2d 698, 731 (2d Cir.), cert.
denied, 107 S. Ct 3266 (1987); Armco Industrial Credit
Corp. v. SLT Warehouse Co., 782 F.2d 475, 480-81 (5th
Cir. 1986); United States v. Local 560, Int'l Bhd. of Team-
sters, 780 F.2d 267, 279-80 n.12 (3d Cir. 1985), cert. denied,
106 S. Ct. 2247 (1986); Ford Motor Co. v. B & H Sup-
ply, Inc., 646 F. Supp. 975, 1001 (D. Minn. 1986); Bosteve,
Ltd. v. Marauszwski, 642 F. Supp. 197, 202 n.7 (E.D.N.Y.
1986); Owl Constr. Co., Inc. v. Ronald Adams Contrac-
tor, Inc., 642 F. Supp. 475, 477 (E.D. La. 1986); Platsis
v. E.F. Hutton & Co., 642 F. Supp. 1277, 1309 (W.D.
Mich. 1986); Stainton v. Tarantino, 637 F. Supp. 1051,
1070 (E.D. Pa. 1986).
The standard of proof in a given case “serves to allocate
the risk of error between the litigants and to indicate the
relative importance attached to the ultimate decision.”’ Ad-
dington v. Texas, 441 U.S. 418, 423 (1979). Because society
has a deep interest in not imprisoning the innocent and
because we recognize the stigma that attaches from a
criminal conviction, we require the government to prove
guilt beyond a reasonable doubt. Jd. The requirement of
proof beyond a reasonable doubt in a non-crirninal case
is extremely rare. See In re Winship, 397 U.S. 358 (1970)
(juvenile delinquency adjudication requires proof beyond
a reasonable doubt). Winship was based on the recogni-
tion that an accused in a juvenile delinquency proceeding
faces the possibility of losing his or her liberty and the
subsequent stigma of a criminal conviction. Jd. at 367.
| er
Defendants argue that, like delinquency adjudications, civil
RICO is quasi-criminal. This contention is without merit.
A civil RICO defendant does not face imprisonment, nor
does the defendant suffer the collateral consequences as-
sociated with conviction of a criminal offense. While a civil
RICO deferdant does face the opprobrium of being labeled
a “racketeer,”’ it is not sufficiently stigmatizing to war-
rant criminal protections.? See Sedima, 473 U.S. at 492
(‘As for stigma, a civil RICO proceeding leaves no greater
stain than do a number of other civil proceedings.’’)
The clear and convincing evidence standard is an inter-
mediate standard of proof, requiring more than proof by
a preponderance of the evidence but less than proof be-
yond a reasonable doubt. It is used in civil cases in which
more is at stake than mere loss of money. See, e.g., San-
tosky v. Kramer, 455 U.S. 745 (1982) (termination of
parental rights); Addington v. Texas, 441 U.S. 418 (civil
commitment); Woodby v. INS, 385 U.S. 276 (1966) (depor-
tation); Chaunt v. United States, 364 U.S. 350 (1960) (de-
naturalization). Under common law, allegations of fraud
required proof of clear, cogent and convincing evidence,
due to the fear that such claims could be fabricated easily.
See Herman & MacLean v. Huddleston, 459 U.S. 375, 388
n.27 (1983). Many states, including Illinois, require allega-
tions of fraud to be proven by clear and convincing evi-
dence. See, e.g., Nat'l Republic Bank of Chicago v. Nat'l
Homes Construction Corp., 63 Ill. App. 3d 920, 3x1
N.E.2d 15 (1978). Defendants argue that since mail and
wire fraud furnish the predicate acts for the RICO viola-
tions, plaintiff should have to prove its allegations by clear
and convincing evidence. We believe the argument is fore-
closed by the Supreme Court’s reasoning in Herman &
MacLean v. Huddleston, 459 U.S. 375 (1983). In Hud-
dleston, the Supreme Court declined to require proof by
2 For the same reasons, we find no error in the district court’s
denial of defendants’ motion for all mghts afforded crimina! defen-
dants.
8a
clear and convincing evidence in a civil securities actren
based on fraud. The Court noted:
The interests of defendants in a securities case do
not differ qualitatively from the interests of defen-
dants sued for violations of other federal statutes
such as the antitrust or civil rights laws, for which
proof by a preponderance of the evidence suffices. On
the other hand, the interests of plaintiffs in such suits
are significant. Defrauded investors are among the
very individuals Congress sought to protect in the
securities laws. If they prove that it is more likely
than not that they were defrauded, they should re-
cover.
Id. at 390. Although addressed to a different area of law,
the reasoning of Huddleston is wholly applicable to the
standard of proof issue in civil RICO cases. We can dis-
cern no reasoned basis for distinguishing a federal secu-
rities claim based on fraud from a civil RICO claim based
on fraud as to warrant applying different standards of
proof. Federal causes of action based on fraud which
violates federal statutes are not to be governed by the
State’s standard of proof for common law fraud. The mere
presence of a treble damages provision does not mandate
otherwise. See Ramsey v. United Mine Workers, 401 U.S.
302 (1971) (preponderance standard governs civil antitrust
actions). Accordingly, we find that proof by a preponder-
ance of the evidence is sufficient for a finding of liability
under civil RICO.
Pattern of Racketeering Activity
Defendants contend that the proven acts do not amount
io a pattern of racketeering activity under RICO. Defen-
dants were found liable under subsections 1962(a), (b), (c),
and (d).* All subsections require the government to show
3 § 1962. Prohibited activities
(a) It shall be unlawful for any person who has received any
income derived, directly or indirectly, from a pattern of rack-
(Footnote continued on following page)
Ga
that defendants engaged in a pattern of racketeering ac-
tivity. A pattern of racketeering activity requires at least
two acts of racketeering activity within ten years. 18
U.S.C. § 1961/5). Racketeering activity includes mail and
wire fraud, 18 U.S.C. §§ 1341, 1343. 18 U.S.C. § 1961(1).
Plaintiff alleged that defendants engaged in a pattern of
racketeering activity through fifty-seven separate acts of
3 continued
eteering activity or through collection of an unlawful debt in
which such person has participated as a principal within the
meaning of section 2, title 18, United States Code, or use or
invest, directly or indirectly, any part of such income, or the
proceeds of such income, in acquisition of any interest in, or
the establishment or operation of, any enterprise which is en-
gaged in, or the activities of which affect, interstate or foreign
commerce. A purchase of securities on the open market for
purposes of investment, and without the intention of control-
ling or participating in the control of the issuer, or of assisting
another to do so, shall not be unlawful under this subsection
if the securities of the issuer held by the purchaser, the mem-
bers of his immediate family, and his or their accomplices in
any pattern of racketeering activity or the collection of an un-
lawful debt after such purchase do not amount in the aggre-
gate to one percent of the outstanding securities of any one
class, and do not confer, either in law or in fact, the power
to elect one or more directors of the issuer.
(b) It shall be unlawful for any person through a pattern of
racketeering activity or through collection of an unlawful debt
to acquire or maintain, directly or indirectly, any interest in
or control of any enterprise which is engaged in, or the ac-
tivities of which affect, interstate or foreign commerce.
(c) It shall be unlawful for any person employed by or
associated with any enterprise engaged in, or the activities of
which affect, interstate or foreign commerce, to conduct or par-
ticipate, directly or indirectly, in the conduct of such enter-
rise’s affairs through a pattern of racketeering activity or col-
ection of unlawful debt.
(d) It shall be unlawful for any person to conspire to violate
any of the provisions of subsections (1a), (b), or (c) of this
section.
10a
mail and wire fraud over a seven month period,‘ injur-
ing both Liquid Air and Bridges Weldings’s unwitting
competitor, Moore Welding.
In Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479
(1985), the Supreme Court noted that a pattern of rack-
eteering activity required more than just two acts com-
mitted within a ten year period; the acts must have “con-
tinuity plus relationship which combines to produce a
pattern.” Jd. at 496 n.14. Borrowing from another statute,
the Court defined “pattern” as ‘criminal acts that have
the same or similar purposes, results, participants, vic-
tims or other methods of commission, or otherwise are
interrelated by distinguishing characteristics and are not
isolated events.”’ Jd. Since Sedima, courts have wrestled
with defining the concept of a pattern under RICO.
Some courts required the predicate acts be part of two
separate schemes before a pattern could be shown, see
Superior Oil Co. v. Fulmer, 785 F.2d 252 (8th Cir. 1986);
others had determined that a single scheme or episode
was sufficient, Bank of America v. Touche Ross & Co.,
782 F.2d 966 (11th Cir. 1986). In Morgan v. Bank of Wau-
kegan, 804 F.2d 970 (7th Cir. 1986), we opted for a “mid-
die course between thle] two extremes,” requiring the
predicate acts to be “ongoing over an identifiable period
of time so that they can fairly be viewed as constituting
separate transactions.” Jd. at 975. In determining whether
the predicate acts are sufficiently continuous and related,
we urged courts to examine the following factors: the
number and variety of predicate acts and the length of
time over which they were committed, the number of vic-
tims, the presence of separate schemes and the occurrence
of distinct injuries. Jd. at 975. We noted however that
“the mere fact that the predicate acts relate to the same
overall scheme or involve the same victim does not mean
‘ Plaintiffs proved that the defendants prepared nineteen fraudu-
lent returns. Each return resulted in two acts of mai] fraud and
one act of wire fraud.
lla
that the acts automatically fail to satisfy the pattern re-
quirement.” Jd. at 975-76. Thus, Morgan envisioned a fact-
specific inquiry, in which no singie factor would be deter-
minative. Marshall & Ilsey Trust Co. v. Pate, 819 F.2d
806, 809-10 (7th Cir. 1987). In Lipin Enter. v. Lee, 803
F.2d 322 (7th Cir. 1986), however, we noted that a single
fraudulent scheme with one injury to one victim was rot
transmuted into a federal case simply because it required
several acts of mail and wire fraud to inflict the single
injury. Accord, Marks v. Pannell Kerr Forster, 811 F.2d
1108 (7th Cir. 1987).
Plaintiffs allege that defendants defrauded two victims:
Liquid Air and Moore Welding. Although setting Bridges
up in business was undoubtedly part of the scheme (the
payoff), Moore was not injured as a direct resu!t of any
of the predicate acts. Moore Welding was injured when
D & R chose to pay Bridges by circumventing their non-
competition agreement. Circumventing the agreement was
not an alleged predicate act under RICO. Thus, for the
purpose of establishing a pattern of racketeering activity,
Moore Welding is not a victim. Therefore, we have a single
scheme which lasted seven months and defrauded a single
victim. The defendants committed nineteen separate acts,
each resulting in use of the mails and use of the wire ser-
vice. Each time an invoice was falsely prepared, it de-
prived Liquid Air of its entitlement to rent or replace-
ment value. Therefore, each act resulted in a distinct in-
jury to Liquid Air and a concommitant benefit to D & R.
We find that the repeated infliction of economic injury
upon a single victim of a single scheme is sufficient to
establish a pattern of racketeering activity for purposes
of civil RICO. Accord, Sun Savings & Loan Ass’n v. Dier-
dorff, 825 F.2d 187 (9th Cir. 1987),
Sufficiency of the Evidence
The defendants argue that the evidence was insufficient
to prove that D & R did not actually return the 3,307
cylinders missing from Liquid Air’s Peoma facility. A jury
verdict will be upheld “if a reasonable basis exists in the
record to support the verdict.”” Hamilton v. Svatik, 779
F.2d 383, 388 (7th Cir. 1985). Defendants argue that Liq-
uid Air used a flawed equation to determine that its paper
inventory exceeded its actual inventory by more than
3,000. Testimony at trial showed that Liquid Air may not
have counted “‘scrap”’ cylinders in assessing the actual in-
ventory. Defendants postulate that the ignored ‘‘scrap’”’
cylinders may have been cylinders returned from D & R
that were later transferred to a different Liquid Air facil-
ity and “exchanged” for scrap cylinders. Defendants also
argue that, according to their calculations, only 2,681
cylinders were not returned. Defendants merely present
a plausible theory that the jury rejected. This is not a
legitimate basis for overturning a jury verdict if the evi-
dence was sufficient to support an opposing theory.
The jury had sufficient evidence to support its finding
that D & R never returned 3,307 cylinders. Liquid Air
employee Bud Sage testified extensively regarding his
method of determining the number of stolen cylinders.
Sage’s calculations supported a determination that 3,307
cylinders were missing. Challenges to the calculations used
go only to the weight to be accorded the testimony, a
matter solely for jury determination.
In addition, the evidence was more than sufficient to
show that D & R actually falsified the shipping orders.
The evidence showed various irregularities associated with
the orders documenting D & R returns supposedly made
between November, 1982 and June, 1983. While prior to
November, 1982, returns were signed only by D & R’s
regular drivers—and never by management—after Novem-
ber 1982, all but two return orders were signed by D & R
management. In addition, the number of cylinders re-
turned per order tripled during the period in question.
No employee of either Liquid Air or D & R could be
found who had seen any of these returns. Perhaps more
importantly, defendants offered implausible explanations
for these irregularities. The defendants testified that the
returns were made when no other employees were around
13a
(except Bridges). This was directly contradicted by ..iquid
Air’s employee time records. Bridges then explained that,
in fact, the deliveries were made on days other than the
date on the order because the orders were prepared
either later or earlier and either post-dated or predated
accordingly. This explanation was itself contradicted by
further evidence of employee time records and Liquid
Air’s (and Bridges’s) policy of using the actual date on
the order form. Defendants contradicted themselves and
each other. From all this, the jury was entitled to infer
that D & R had falsified return orders and had wrongfully
retained the missing 3,307 Liquid Air cylinders.
Conspiracy
Defendants also challenge the jury’s adverse finding
with respect to the conspiracy count, section 1962(d).
Defendants argue that there can be no civil liability based
on conspiracy since there is no damage to plaintiff caused
by the conspiracy alone. We need not reach either issue.
The jury awarded $750,000 on each RICO count to be
trebled. Were we to decide the conspiracy issues in defen-
dants’ favor, it would not lessen the amount of compen-
sation they must pay. Accordingly, we decline to address
either issue. Cf. Spanish Action Comm. of Chicago v. City
of Chicago, 766 F.2d 315, 321 (7th Cir. 1985) (declining
to consider plaintiffs’ additional challenge where it would
not increase amount of recovery).
Liability of Bridges Welding
Bridges Welding argues that it could not be liable for
any RICO violation or for conversion since it did not have
a corporate existence during the scheme. Bridges Welding
was incorporated in April, 1983. Defendants’ scheme was
not completed until thd end of May, 1983. Ray Bridges
was a principal employee and president of Bridges Weld:
ing while still employed at Liquid Air. A corporation may
l4a
be a “person” under RICO.5 18 U.S.C. §§ 1961(3); Haroco
v. Am. Nat'l Bank & Trust Co. of Chicago, 747 F.2d 384,
400 (7th Cir. 1984), aff'd, 473 U.S. 606 (1985). A corpora-
tion acts only through its agents. Under general agency
rules, a corporation (principal) will be vicariously respon-
sible for the wrongful acts of its employees (agents) when
the acts are: (1) related to and committed within the
course of employment; (2) committed in furtherance of the
corporation; and (3) authorized or subsequently acquiesced
in by the corporation. 10 W. FLETCHER, Cyclopedia of
the Law of Private Corporations, § 4942 at 620-21. In
falsifying returns, Ray Bridges acted as president of
Bridges Welding and his acts redounded to the benefit
of Bridges Welding shareholders. Bridges Welding ac-
cepted the benefits of Ray Bridges’s wrongdoing. The jury
was entitled to infer acquiescence.
Vicarious liability, however, has only limited application
to civil RICO to avoid holding vicariously liable a corpora-
tion that was the victim of a RICO violation. See Parnes
v. Heinold Commodities, Inc., 548 F. Supp. 20, 23-24
(N.D. Ill. 1982). To the extent that agency rules would
require holding a legitimate, infiltrated business vicarious.
ly liable, the rules are at odds with the clear congres-
sional intent to protect such legitimate businesses. See
Haroco, 747 F.2d at 400. To accommodate these concerns,
we have noted that the doctrine may apply only when
1) the corporation has derived some benefit from the
RICO violation and 2) imposing vicarious liability is not
inconsistent with the intent of Congress. To assess the
intent of Congress we look to the express language of
the particular subsections. Jd. A RICO violation requires
proof that a “person” (the defendant) acted with respect
to an “enterprise” (the corporation) through a pattern of
racketeering activity. If the language of the subsections
5 § 1961. Definitions
(3) “person” includes any individual or entity capable of
holding a legal or beneficial interest in property;
—————
—
"yy
require that the “person’’ and the “enterprise” be distinct
entities, then we can postulate that Congress intended
that “enterprises” not be held vicariously liable as defen-
dants. In this regard, we have noted a distinction between
subsections (a) and (c). Subsection (a) prohibits a person
from investing money received from a pattern of racke-
teering in an enterprise engaged in interstate commerce.
In Haroco, we noted that there was nothing in the lan-
guage of subsection (a) that seemed to require that the
liable “person” be a distinct entity from the “enterprise.”
In other words, subsection (a), by its express language,
encompassed circumstances under which the enterprise
itself was guilty of wrongdoing. Thus, vicarious liability
under subsection (a) is consistent with congressional in-
tent, provided the corporation derived some benefit from
the RICO violation.
In contrast, the express language of subsection (c) has
been read to proscribe vicarious liability. Haroco, 747 F.2d
at 400; Parnes v. Heinold Commodities, Inc., 548 F. Supp.
20, 23-24 (N.D. Ill. 1982). Subsection (c) prohibits an em-
ployee of an enterprise from operating the enterprise
through a pattern of racketeering activity. We noted in
Haroco that the language of subsection (c) clearly envi-
sioned that the “person” (employee) and “enterprise” (em-
ployer) be different entities. Accord Petro-Tech, Inc. v.
Western Co. of N. Am., No. 86-3361, slip op. (8d Cir. July
13, 1987) (finding that subsection (c) was intended to
govern only those situations in which the enterprise was
the passive, innocent victim of RICO). Thus, vicarious
liability should not be imposed under subsection (c) when
a finding of liability would require the “person” and
“enterprise” to be the same entity.
Subsection (b) prohibits a person from acquiring an in-
terest in an enterprise through a pattern of racketeering
activity. Whether a single entity may be both a liable
“person” and an “enterprise” under subsection (b) de-
pends on whether the language of subsection (b) is more
like (a) or (c). In Bruss Co. v. Allnet Communication Ser-
vices, Inc., 606 F. Supp. 401 (N.D. Ill. 1985), the court
—
l6a
found that subsection (b), like subsection (c), required that
the ‘‘person’”’ and “enterprise” be distinct, reasoning that
(b) requires the person to ‘‘acquire or maintain”’ an inter-
est in an enterprise—similar to the requirement of subsec-
tion (c) that the person be “employed by” an enterprise.
We disagree. Subsection (a), which requires a person to
invest income in an enterprise, does not require a separate
entity for the “person” and the “enterprise.” See Masi
v. Ford City Bank & Trust Co., 779 F.2d 397, (7th Cir.
1985). We can see no distinction between “investing in
an enterprise” and ‘‘acquiring an interest in an enter-
prise”’ sufficient to require separate entities for a subsec-
tion (b) violation. Unlike subsection (c), which requires a
relationship between the ‘“‘person” and the ‘“‘enterprise”’
(employer-employee), subsections (a) and (b) require only
the use of an “enterprise” by a “‘person.” Accordingly, we
‘hold that, like subsection (a), subsection (b) does not re-
quire the existence of an enterprise separate and distinct
from the person sought to be held liable. Accord, Wilcox,
815 F.2d at 529.
Respondeat superior is therefore entirely appropriate
under both subsections (a) and (b), so long as Bridges
Welding derived a benefit from the violations. There is
substantial evidence that Bridges Welding benefitted from
the RICO violation. In exchange for the ‘“‘work”’ of Bridges
Welding’s president, D & R supplied Bridges Welding
with the labor of defendant Rogers’s son and defendant
Michlik’s nephew. A supplier of Bridges Welding, Gano
Welding, billed D & R for supplies furnished to Bridges
Welding. In addition, there was evidence of various
“loans” from D & R to Bridges Welding on which D & R
was, at best, not actively pursuing collection. Therefore,
under both (a) and (b), Bridges Welding was properly
found liable.
Again, since addressing the propriety of the finding of
vicarious liability under subsections (c) (under which re-
spondeat superior may not apply) or (d) (conspiracy to
violate (a), (b), or (c)), would not affect the amount of Liq-
uid Air’s award, we decline to consider defendants’ chal-
17a
lenges to these findings. Cf. Spanish Action Comm., 766
F.2d at 321.
ITI.
EVIDENTIARY RULINGS
Defendants maintain that the trial court prevented them
from presenting their theory of defense. Defendants sought
to convince the jury that no fraud had in fact occurred
and that Liquid Air brought suit only to remove a new
competitor (D & R) from the market. Defendants com-
plain that the court excluded evidence that showed that
Liquid Air had offered to finance an attempted ‘‘buy out”
of a D & R competitor and that Liquid Air had divulged
business secrets of D & R, mouled during discovery, in
contravention of a stipulation not to reveal such informa-
tion. Defendants argue that these pieces of evidence would
show Liquid Air’s general malevolence toward D & R and
Liquid Air’s desire to drive D & R out of business.
The trial court has broad discretion in determining
whether proffered evidence should be admitted or ex-
cluded. See, e.g., United States v. Garver, 809 F.2d 1291,
1297 (7th Cir. 1987). Had the court admitted the excluded
evidence, it would not be especially probative of the al-
legation that Liquid Air’s true motives in bringing the
suit were solely malevolent and that no fraud had oc-
curred. The court excluded evidence of the alleged dis-
covery abuse because the documents were not listed in
the pretrial order, nor had the court been informed of
them at any time prior to the proffer. In addition, the
proffered evidence would delay the proceedings, requir-
ing trial counsel’s testimony and possibly substitution of
counsel. We find no abuse of discretion in the court’s
determination that the relevance of the evidence was out-
weighed by the danger of confusion and undue delay.
Fep. R. Evip. 403.
Defendants next object to the testimony of Gregory
Alexander. Alexander was Liquid Air’s comptroller and
testified to the fair market value of the cylinders as a
a ii |
18a
basis for the jury’s award on the conversion count.® Defen-
dants argue that Alexander was not sufficiently qualified
to give expert testimony on the matter. In admitting ex-
pert testimony under FEp. R. Evip. 702, the trial judge
has broad discretion and the determination will be af-
firmed unless it is “manifestly erroneous.” United States
v. Lundy, 809 F.2d 392, 394 (7th Cir. 1987); see also
United States v. Davis, 772 F.2d 1339, 1343-44 (7th Cir.),
cert. denied, 106 S. Ct. 603 (1985).
As comptroller, one of Gregory Alexander’s duties was
to determine the value of cylinders to be acquired, both
new and used. The defendants objected to Alexander’s
qualifications because he did not explain the procedures
he used to determine market value nor the geographic
locality of his expertise. The district court ruled that plain-
tiff had established an adequate foundation, and that any
questions regarding Alexander’s methodology or particular
area of expertise were more appropriately addressed dur-
ing cross-examination. This was hardly error. Experience
and knowledge establish the foundation for an expert’s
testimony; the accuracy of such testimony is a matter of
weight and not admissibility. See Robinson v. Watts Detec-
tive Agency, Inc., 685 F.2d 729, 739 (1st Cir. 1982), cert.
denied, 459 U.S. 1105 and 459 U.S. 1204 (1983).7
rv.
JURY INSTRUCTIONS
Next, defendants object to various jury instructions
given by the district court. Defendants contend that the
6 As opposed to the RICO counts, damages for conversion are
properly limited to the fair market value of the converted items.
People v. Rose, 19 Ill. 2d 292, 166 N.E.2d 566 (1969).
7 Defendants also object to the trial court’s refusal to allow defen-
dants to explain the treble damage provision of RICO to the jury.
Such information is irrelevant to a jury’s deliberations and may
confuse or prejudice the jury. It is properly excluded. Cf.
Heatransfer Corp. v. Volkswagenwerk A.G., 553 F.2d 964 (C.A.
Tex. 1977), cert. denied, 434 U.S. 1087.
KK
19a
trial court’s instructions defining ‘‘pattern of racketeer-
ing activity” and ‘‘association-in-fact” were erroneous. In
addition, defendants object to the court’s failure to admin-
ister special interrogatories offered by the defendants.
In judging a challenge to a particular jury instruction,
we must determine only whether the instructions overall,
conveyed the “correct message’”’ to the jury. Wilk v. Am.
Medical Ass’n, 719 F.2d 207, 218-19 (7th Cir. 1983), cert.
denied, 467 U.S. 1210 (1984). The trial judge informed the
jury that in order to find a “pattern of racketeering ac-
tivity,” it must find,
[t}wo or more acts of racketeering activity which
were related by a common scheme, plan or motive.
It may not simply be a series of disconnected acts.
Therefore, proof of two acts of racketeering activi-
ty, without more does not establish a pattern.
The instruction comports with the general requirements
of the statute as interpreted since Sedima. Defendants
object because the charge failed to advise the jury that
there be “some continuing threat of racketeering activity.”
Defendants argue that the continuity requirement of
Sedima mandates that there be a threat that defendants
would engage in future acts of racketeering after com-
pletion of their scheme. This is an untenable interpreta-
tion of the requirement of continuity. The requirement
of continuity was not intended to force a court to guess
the likelihood of future criminal conduct nor was it in-
tended to proscribe liability for completed schemes. Con-
tinuity refers instead to the duration of the predicate acts.
The trial court was correct in refusing the proffered in-
struction.
Defendants next contend that the jury was not in-
structed that it must find the existence of an enterprise
before imposing liability. We find defendants’ objections
obtuse. As to each RICO count, the court instructed the
jury regarding each element of the subsection, including
the enterprise requirement. The jury was instructed that
it had to find that defendants had used income derived from
20a
a pattern of racketeering to invest in an enterprise (sub-
section a); acquired an interest in an enterprise through
a pattern of racketeering (subsection b); and conducted
the affairs of an enterprise through a pattern of racketeer-
ing (subsection c). Apparently, defendants object to the
court’s failure to specifically instruct the jury that it must
find the existence of an enterprise. It is not necessary
to give a proposed instruction “where the essential points
are covered in another instruction.” United States v.
Hansen, 701 F.2d 1215, 1218 (7th Cir. 1983). The instruc-
tions, as given, adequately informed the jury that the exis-
tence of an enterprise was essential to civil RICO liability.
Defendants also claim as error the court’s failure to ad-
minister special interrogatories proffered by defendants.
Although initially expressing an interest in administering
special interrogatories, the trial court determined that
they were not necessary in light of cautionary instructions
already given. When the court made this determination,
defendants made no argument to enlighten the trial court
regarding the necessity of special interrogatories, even in
light of the cautionary instructions given; nor do they
make such argument here. Simply voicing a general ob-
jection is not sufficient. To preserve for review the issue
of whether special interrogatories were required, defen-
dants would have to have argued the issue below with
specificity. See Sanchez v. Miller, 792 F.2d 694, 703 (7th
Cir. 1986), cert. denied, 107 S. Ct. 933 (1987). Their failure
to specify on appeal how the failure to administer special
interrogatories prejudiced them compounds their error.
We have considered the remainder of defendants’ chal-
lenges to the jury instructions and find them to be similar-
ly frivolous.
V.
DAMAGES
Defendants challenge the jury’s damage awards on sev-
eral bases, many of which are frivolous and will not be
addressed here. The remaining challenges are: (1) that the
2la
appropriate measure of damages for the RICO counts was
only the fair market value of the cylinders and not con-
tractual damages; (2) that the measure of damages for in-
ducement to breach a fiduciary duty should be limited to
the disloyal employees’s wages and benefits during the
fraud: (3) that the award of prejudgment interest was im-
prop: .. and (4) that the court should have subtracted any
set-offs prior to trebling the awards.
Appropriate Measure of Damages Under RICO
Plaintiff was awarded $750,000 on each RICO count to
compensate it for both the replacement value and the lost
rental value of the cylinders. The court allowed the jury
to determine the appropriate measure of compensation by
looking to the contract between Chemtron Corporation
(the predecessor in interest to Liquid Air) and Decatur
Oxygen Products, Inc. (a wholly owned subsidiary of
D & R), which provided that D & R would pay Liquid
Air rent on all cylinders until they were returned or ac-
counted for, and that D & R would pay Liquid Air the
replacement value for any cylinders not returned. Defen-
dants argue that contract damages were inappropriate and
that under civil RICO, a court must look to the underly-
ing nature of the predicate acts to determine the proper
measure of damage. Since the underlying claim here is
conversion, defendants argue, under Illinois law the ap-
propriate measure of damages is only the fair market
value of the cylinders. We have noted how futile it can
be to employ a case-by-case approach in determining the
“underlying” cause of action in civil RICO. See Tellis v.
United States Fidelity & Guaranty Co., 805 F.2d 741 (7th
Cir. 1986), vacated, 55 U.S.L.W. 3871 (1987). Although
defendants now insist that the “‘underlying’”’ cause of ac-
tion is conversion, they insisted as strongly that the ‘“un-
derlying” cause of action was fraud in arguing for a “clear
and convincing” standard of proof.
The measure of damages under civi! RICO is the harm
occasioned as a result of the predicate acts. Sedima, 473
U.S. at 497. A plaintiff injured by civil RICO violations
»
22a
deserves a “complete recovery.” Carter v. Berger, 777
F.2d 1173, 1176 (7th Cir. 1985). Although the contract only
bound D & R and Liquid Air, the damages provided
therein supply an appropriate measure of the degree to
which Liquid Air was injured by the RICO violations. To
restrict damages to the fair market value of the cylinders
would deprive Liquid Air of its rights under the contract
and would not compensate it for its losses. The damages
that Liquid Air was entitled to under its contract with
D & R provide the appropriate mezsure of full compen-
sation.
Lost Rent
Defendants then challenge the jury’s award of lost rent,
also provided for in the contract. Defendants equate lost
rent with lost profits and note that Illinois does not allow
recovery for lost profits in contract actions. The argument
ignores the obvious distinction between lost rent and lost
profits. Lost profits are not recoverable simply because
they are speculative. The rent awarded was that due and
owing at the time of conversion, and easily calculable. It
was entirely appropriate to award lost rent.
Set-off
Plaintiffs first learned during discovery that D & R re-
tained some Liquid Air cylinders. At that time, Liquid
Air sought a protective order over the cylinders (then
thought to number around 200) to ensure their preserva-
tion. After post-trial motions were denied, defendants
revealed that they had 530 Liquid Air cylinders, and
sought to return them and accordingly set-off the judg-
ment. The rental and replacement value of the belatedly
returned cylinders was subtracted from the already trebled
damages. Defendants argue that the cost of the returned
cylinders should have been subtracted before trebling.
While the return of the cylinders may compensate Liq-
uid Air for the replacement value of the cylinders, it does
not compensate it for rents lost prior to litigation. More
23a
importantly, it does not negate the frauds perpetrated by
defendants. We conclude that setting-off damages after
trebling is more likely to effectuate the p ses behind
RICO.® See, In re Nat’l Mortgage Equity ., 636 F.
Supp. 1138, 1151 (C.D. Cal. 1986); ef lintkote Co v. Lys-
fjord, 246 F.2d 368 (9th Cir.) cert. denied, 355 U.S. 835
(1957) (subtracting set-off after trebling in antitrust case).
The judgment entered on the jury verdict and award
of damages is affirmed in all respects.
A true Copy:
Teste:
eee eee eee eeeees --
Clerk of the United States Court of
Appeals for the Seventh Circuit
® Defendants challenge the treble damages provision of RICO as
violative of the Eighth Amendment’s proscription against excessive
fines. The ment has been flatly rejected with respect to anti-
trust treble damages. See Berkey Photo, Inc. v. Eastman Kodak
Co., 457 F. Supp. 404, 440 (S.D.N.Y. 1979), rev'd on other grounds,
603 F.2d 263 (2d Cir. 1979). The same reasoning applies here. Al-
though there is some sense in which RICO treble damages are
punitive, they are largely ee in the special sense that
they ensure that wrongs will redressed in light of the recog-
nized difficulties of itemizing damages. See Carter v. Berger, 777
F.2d 1173 (7th Cir. 1983).
24a
APPENDIX B
JUDGMENT—ORAL ARGUMENT
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
November 13, 1987.
Before
Hon. WILLIAM J. BAUER, Chief Judge
Hon. JOHN L. COFFEY, Circuit Judge
Hon. JESSE E. ESCHBACH, Senior Circuit Judge
Nos. 86-3001 and
86-3046
Liguip AiR CORPORATION, a Delaware corporation,
Plaintiff-A ppellee,
vs.
JACK R. ROGERS, GOERGE MICHLIk, and
D & R WELDING SuppLy ComPANY, an Illinois Corporation,
and RAYMOND E. BRIDGES and BRIDGES WELDING SUPPLY
& THERAPY, INC.,
Defendants-A ppellants.
Appeals from the United States District Court for the
Central District of Illinois, Peoria Division.
No. 84 C 1110
MICHAEL M. MIHM, Judge
This cause was heard on the record from the United
States District Court for the Central District of Illinois.
Peoria Division, and was argued by counsel.
ennaneenneenenanmeeell
25a
On consideration whereof, IT IS ORDERED AND AD-
JUDGED by this Court that the judgment of the said
District Court in this cause appealed from be, and the
same is hereby, AFFIRMED, with costs, in accordance
with the opinion of this Court filed this date.
APPENDIX C
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
December 10. 1987
‘
Before
Hon. WILLIAM J. BAUER, Chief Judg
Hon. JOHN L. COFFEY, Circuit Judges
Hon. JESSE E. ESCHBACH, Senior Circuit Judg:
Nos. 86-3001 &
86-3046
JACK R. ROGERS, GEORGE MICHLIK and
D & R WELDING SUPPLY COMPA an Illinois Corp
and
RAYMOND E. BRIDGES and
BRIDGES WELDING SUPPLY & THERAPY, IN
Defendants A ppe ant
Appeals from the United States District Court for the
Central District of Illinois, Peoria Division.
]
MICHAEL M. MIHM, Judge
‘ ) «
27a
ORDER
On consideration of the petition for rehearing with sug-
gestion for rehearing en banc filed in the above-entitled
cause by Defendants-Appellants Jack R. Rogers, George
Michlik and D & R Welding Supply Company, no judge
in active service has requested a vote thereon, and all of
the judges on the original panel have voted to deny the
petition for rehearing. Accordingly,
IT IS HEREBY ORDERED that the aforesaid petition
for rehearing be, and the same is, DENIED.
In addition, this court’s opinion of November 13, 1987,
is hereby amended as follows:
Page 2, line 14 should read: “D & R is an Illinois cor-
poration in which two of the shareholders are Jack R.
Rogers and George Michlik.”’
On page 8, in the last sentence of the text, replace
“sovernment” with “plaintiff”
IT IS SO ORDERED
28a
APPENDIX D
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
December 10, 1987
Before
Hon. WILLIAM J. BAUER, Chief Judge
Hon. JOHN L. COFFEY, Circuit Judge
Hon. JESSE E. ESCHBACH, Senior Circuit Judge
No. 86-3001 and
86-3046
Liguip AIR CORPORATION,
Pla int iff-A ppellee 7
VS.
JACK R. ROGERS, GEORGE MICHLIK and D & R WELDING
SuppLy Company, an Illinois Corporation, and RAYMOND
E. BRIDGES and BRIDGES WELDING SuppLy & THERAPY,
INC.,
Defendants-A ppellants.
Appeals from the United States District Court for the
Central District of Illinois, Peoria Division.
No. 84-1110
MICHAEL M. MIHM, Judge.
ORDER
This matter comes before the court for its consideration
of the “‘Motion to Correct Clerical Mistake in Second
29a
Amended Final Judgment” filed herein on June 1, 1987,
by counsel for the plaintiff-appellee. On consideration
thereof,
IT IS ORDERED that said motion is GRANTED
whereas those corrections have been considered and re-
flected in this court’s opinion decided on November 18,
1987.
30a
APPENDIX E
United States District Court
CENTRAL DISTRICT OF ILLINOIS
84-1110
Ligtip AIR CORPORATION
V.
RAYMOND E. BripGEs, JACK R. RoGersS, GEORGE MICHLIK.
BRIDGES WELDING SuppPLy & THERAPY. INC. and
D & R WELDING SupPLy Co.
SECOND
AMENDED
JUDGMENT IN A CIVIL CASE
— Jury Verdict. This action came before the Court for a
trial by jury. The issues have been tried and the jury has
rendered its verdict.
X Decision by Court. This action came to trial or hearing
before the Court. The issues have been tried or heard
and a decision has been rendered.
IT IS ORDERED AND ADJUDGED that the Judgment
entered August 1, 1986 is amended to the following
amounts:
Count I $2,168,062.00
Count II $2,168,062.00
Count III $2,158,062.00
Count IV $2,168 ,062.00
Count V $ 347,444.40
Count VI $ 0.00
Count VII $ 668,062.00
This amended judgment under Counts IJ through IV re-
flects the damages award after trebling, as amended by
this Order, pursuant to a Second Amended Judgment Or-
der entered on November 14, 1986.
FILED JOHN M. WATERS, Clerk
NOV 17 1986 U.S. DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
November 17, 1986
JOHN M. WATERS
Clerk
/s/ LEONARD D. Brown
(By) Deputy Clerk Leonard D. Brown
32a
APPENDIX F
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
No. 84-1110
Ligtuip AIk CORPORATION, a Delaware corporation,
Plaintiff.
wa
RAYMOND BRIDGES, et al.,
Defendants.
SECOND AMENDED JUDGMENT ORDER
FILED JOHN M. WATERS, Clerk
NOV 14 1986 U.S. DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
This matter coming on to be heard upon the Order of
this Court of October 14, 1986, directing the parties to
determine the number of Liquid Air-owned cylinders held
by Defendant D & R Welding. Inc. during the pendency
of this cause and further directing said Defendant to re-
turn those cylinders to Plaintiff; and it being represented
to the Court that those cylinders, numbering 530, have
been returned,
IT IS HEREBY ORDERED that:
The judgment entered August 1, 1986, is amended to
reflect a set off for the return of 530 cylinders by the D
& R Defendants to Liquid Air corporation and is hereby
made final. The judgment is also amended to reflect the
amount of prejudgment interest which the Court granted
on Count V in its Order of November 13, 1986. The judg-
33a
ment under each Count is amended to the following
amounts:
Count I $2,168,062.00
Count II $2,168,062.00
Count III $2,168,062.00
Count IV $2,168,062.00
Count V $ 347,444.40
Count VI g 0.00
Count VII $ 668,062.00
The set-off is based on a cylinder value of $154.60 per
cylinder under Counts I through IV and VII and $108.22
per cylinder under Count V.
The amended judgment under Counts I through IV re-
flects the damages award after trebling, as amended by
this Order.
The Clerk is directed to enter an amended judgment,
fine] as of the date of its entry, which reflects the amounts
as amended above.
It is so ordered this 14th day of November, 1986.
/s/ MICHAEL M. Min
Michael M. Mihm
United States District Judge
34a
APPENDIX G
a IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
PEORIA DIVISION
No. 84-C-1110
Liquip AIR CORPORATION, a Delaware corporation,
Plaintiff,
-VS-
RAYMOND E. BripGES, JACK R. ROGERS, GEORGE MICHLIk,
BRIDGES WELDING SUPPLY & THERAPY, INC., an Illinois
corporation, D & R WELDING SUPPLY Company, an Illinois
corporation,
Defendants.
COURT DOCKET CONTINUATION PAGE 18,
ENTRY DATED OCTOBER 14, 1986
Parties pres.by/c. via phone for Hearing on Post Trial
Mots. Argument by/c. (#218 & #201)-Mots. DENIED in
part & GRANTED in part. Magistrate’s Order of 5/6/85
is VACATED. Parties are directed to determine the # of
cylinders & return them by 10/17/86 & counsel to submit
by 10/22/86, a joint proposed 2nd amended judgment. 2nd
Am. Judgment will be final upon its entry by Clerk. Atty.
McNutt to reply to P.MO for Attys. fees & costs by 10/
28/86. Counsel to confer re: how long hearing on P.MO
for Attys. fees & costs will take and to notify Holly by
10/28/86 for scheduling of hearing on same. Oral mo. by
all defts. to extend time to file certain documents—MO
GRANTED until 10/17/86. (copy of docket sheet sent to
atty. Howard by Clerk) (Mihm,J)
35a
Excerpts from Trial Transcript dated October 14, 1986,
Volume 20, Trial Court Docket No. 247 =
Page 4:
THE COURT: Okay, that’s fine. Let’s get into the post-
trial motions then, defendants’ motions. Who is going to
go first?
Page 26-28:
THE COURT: This is Judge Mihm speaking. Can you
all hear me? First of all, Mr. McNutt I believe started out
his argument by indicating that the Court had not actually
had the opportunity to rule—or ruled on the question raised
in terms of the failure of the plaintiff to prove the cylinder
ioss. I think that the record does reflect at other points
in the proceeding that by the denial of defendants’ motions
to various points that that was a question for the jury to
decide and they did decide it. In a few moments here
will be getting into specifically the question of the redut-
tion of the amount of cylinders that is claimed by the
defendants.
In terms of the counting of the cylinders, as to the
junked cylinders, scrapped cylinders, my memory from the
record is that it was the position of the plaintiffs that
junked cylinders were not included on any inventory that
was kept. And, of course, I think it is fair to say that the
defendants argued that there may well have been some
crossover between junked cylinders and non-junked cylin-
ders. And it seems to me that was a question of fact for
the jury to decide. Concerning this question of the state-
ments made by Mr. Schopf in closing statement, I don’t
think that statement or those statements that are claimed
to have been made really change anything. The Court has
added up the number of cylinders that appear on Plaintiff's
36a
Exhibit No. 1. I did it very quickly, and so it may not be
one-hundred percent accurate. But the figure that I came
up with was 5,176, which is certainly in the ballpark of
what was under discussion and the statements made by
Mr. Schopf in terms of reductions from that don’t seem
in any way to be inconsistent with the plaintiff's position
in the case or in the award that was made by the jury.
As to the $4,000 award against Mr. Bridges on the
breach of fiduciary duty, I think in order to consider the
implications of that one has to look at all of the verdicts
that were returned. Mr. Bridges was a co-defendant with
the other defendants in the earlier counts that dealt with
the same subject matter—that is, the cylinders. And in
every one of those other counts the award of the jury was
the same; that is, $750,000.00, which is made up of the
lost cylinders and the lost rental, if you want to call it
that. I certainly can’t say specifically what was in the mind
of those jurors when they set that award in the amount
of $4,000.00. But I don’t think there is anything in that
award in that particular count that as a matter of law
creates verdicts that are inconsistent to the point where
either some type of remittor [sic] or new trial would be
required. It may well be, as the plaintiffs argued, that
they felt sorry for him and since he was the only person
named in that count that they chose that opportunity to
reflect that, but that is speculation also.
The argument that the lost rents were not a valid ba-
rometer or component of damages, it seems to me that
we went through this during the trial and I believe I recall
in finding at that time that certainly it wasn’t necessarily
the one that the jury would accept or it didn’t necessarily
limit the plaintiffs to argue for other types of damages
but that since the contract itself between the parties es-
tablished that as a measure of damages that it was an
appropriate measure of damages for the jury to consider,
and I stil! feel that way.
37a
As to the 259 cylinders that are presently in the pos-
session of the defendant, it seems to me that the simple
thing to do as to those cylinders would be to take that
number and multiply it times 108. Is that the plaintiff's
figure, 108?
Page 32:
THE COURT: The bottom line on all of this is that with
the exception of the reduction reflecting the 259 cylinders,
that all of the post-trial motions are denied.
ad * 7: -
Page 32-33:
THE COURT: I would suggest this: I had indicated that
this order of the Court would be final as of today and
that the time for appeal would start running today. But
it seems to me that this question has got to be resolved
before it can be put to rest. So I would suggest that as
quickly as possible to determine the number of cylinders
and return them and so that the number returned is con-
firmed, and then at that point I would ask counsel to
tender to the Court hopefully a joint proposed amendment
to the judgment. That’s without defendants having waived
any of your objections previously made. But tender sug-
gested wording to the Court on a modified judgment. Then
when I get that I will enter it and then the judgment
would become final as of that date.
7 * a *
Excerpts from Trial Transcript dated November 14, 1986,
Volume 21, Trial Court Docket No. 265.
Page 3:
THE COURT: Yes, we will set a date before you leave
today. I would like to discuss this setoff question first and
resolve that. I think I have read all the pleadings in the
cases cited. I would be happy to consider very brief oral
argument on that.
Page 13:
THE COURT: Well, I appreciate the arguments. As |
said, I think it is not a very clear question, not easy to
resolve. But as I said, my heart is with the defendant,
but my head is with the plaintiffs. 1 believe that the
defendant—or the plaintiff's arguments on this most ac-
curately state the law. So the setoff will occur after the
trebling. It will also apply to Count VI, which I guess will
have the effect of reducing that to zero, right?
39a
APPENDIX H
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
No. 84-1110
Ligtip AIR CORPORATION, « Delaware Corporation,
Plaintiff
“VG-
RAYMOND E. BripGes, JACK R. RoGERS, GEORGE MICHLIk,
GEORGE [SIC] BRIDGES WELDING SuppLy & THERAPY, INC..,
an Ill. Corp. and D & R WE LpING Supp.Ly Co., an Il.
Corp.
Defendants.
JUDGMENT IN A CIVIL CASE
Jury Verdict. This action came before the Court for a
trial by jury. The issues have been tried and the jury has
rendered its verdict.
X Decision by Court. This action came to trial or hearing
before the Court. The issues have been tried or heard
and a decision has been rendered.
IT IS ORDERED AND ADJUDGED that Plaintiff is
entitled to Attorney’s Fees and Costs, and Judgment is
hereby entered in favor of Plaintiff and against all
Defendants for the sums of $378,170.58 for attorney’s fees
and $51,412.17 for costs, through December 16, 1986: this
Judgment entered pursuant to Stipulation filed herein De-
cember 16, 1986.
FILED JOHN M. WATERS, Clerk
DEC 18 1986 U.S. DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
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December 18, 1985
JOHN M. WATERS
Clerk
s’ LEonaRD D Brown _
(By) Deputy Clerk LEONARD D. BROWN
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APPENDIX I
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
PEORIA DIVISION
No. 84-1110
Judge Mihm
Liquip AIR CORPORATION, a Delaware corporation,
Plaintiff,
-VS-
RAYMOND E. BRIDGES, JACK R. ROGERS, GEORGE MICHLIK,
BRIDGES WELDING SuppLY & THERAPY, INC., an Illinois
corporation, D & R WELDING Supp_y Company, an Illinois
corporation,
Defendants.
FILED JOHN M. WATERS, Clerk
DEC 16 1986 U.S. DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
12-16-86 Stipulation allowed Clerk to enter Judgment in
the amounts stipulated. /s)/ MMM
STIPULATION CONCERNING ATTORNEY'S FEES
AND COSTS
Plaintiff Liquid Air Corporation and defendants Ray-
mond E. Bridges, Jack R. Rogers, George Michlik, Bridges
Welding Supply & Therapy, Inc. and D & R Welding Sup-
ply Company, by their respective undersigned attorneys,
hereby stipulate as follows concerning Plaintiff's Petition
for Attorney's Fees and Costs:
1. Plaintiff Liquid Air Corporation, is the prevailing
party at trial on its claims for violations of RICO and for
conversion, breach of fiduciary duty and inducement to
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breach of fiduciary duty. As the prevailing party Liquid
Air Corporation is entitled to its reasonable attorney's fees
pursuant to 18 U.S.C. §1964(c) and to its costs pursuant
to 18 U.S.C. §1964(c) and Rule 54(d) of the Federal Rules
of Civil Procedure.
2. Plaintiff's reasonable attorney's fees through Decem-
ber 16, 1986, are $378,170.58.
3. Plaintiff's reasonable costs through December 16,
1986, are $51,412.17.
4. Nothing in this stipulation shall be deemed a waiver
or restriction of plaintiff's right to seek or receive rea-
sonable attorney's fees and costs on appeal.
5. In the event that the judgment under any of the
RICO claims is affirmed, in whole or in part, on appeal,
defendants shall be liable to pay to plaintiff $378,170.58
in attorney's fees, exclusive of any attorney’s fees on
appeal which the Court may award pursuant to 18 U.S.C.
§1964(c).
6. In the event that the judgment under any of the
claims is affirmed, in whole or in part, on appeal,
defendants shal] be liable to pay to plaintiff (in addition
to any attorney's fees as provided for in paragraph 5)
$51,412.17 in costs, exclusive of any appeal costs which
the Court may award.
/s/ PauLa E. Litt
One of the Attorneys for Plaintiff
Liquid Air Corporation
/s/ FRANK _H. Byers II]
One of the Attorneys for Defendants
Jack R. Rogers, George M. Michlik,
and D&R Welding Supply Co.
/s/ WittiaM A. McNutt
Attorney for Defendants
Raymond E. Bridges and Bridges
Welding Supply & Therapy, Inc.
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THE CONSTITUTION OF THE
UNITED STATES OF AMERICA
AMENDMENT V
No person shall be held to answer for a capital, or oth-
erwise infamous crime, unless on a presentment or in-
dictment of a Grand Jury, except in cases arising in the
land or naval forces, or in the Militia, when in actual
service in time of War or public danger; nor shall any
person be subject for the same offense to be twice put in
jeopardy of life or limb; nor shall be compelled in any
criminal case to be a witness against himself, nor be de-
' prived of life, liberty, or property, without due process of
law; nor shall private property be taken for public use,
without just compensation.
AMENDMENT VI
In all criminal prosecutions, the accused shall enjoy the
right to a speedy and public trial, by an impartial jury of
the State and district wherein the crime shall have been
committed, which district shall have been previously as-
certained by law, and to be informed of the nature and
cause of the accusation; to be confronted with the wit-
nesses against him; to have compulsory process for ob-
taining witnesses in his favor, and to have the Assistance
of Counsel for his defense.
AMENDMENT VIII
Excessive bail shal] not be required, nor excessive fines
imposed, nor cruel and unusual punishments inflicted.
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18 U.S.C. §§1961, 1962, 1963 AND 1964
RACKETEER INFLUENCED AND
CORRUPT ORGANIZATION ACT
$1961. Definitions
As used in this chapter [18 USCS §§ 1961 et seq.]—
(1) “racketeering activity’’ means (A) any act or threat
involving murder, kidnaping, gambling, arson, robbery,
bribery, extortion, or dealing in narcotic or other dan-
gerous drugs, which is chargeable under State law and
punishable by imprisonment for more than one year; (B)
any act which is indictable under any of the following
provisions of title 18, United States Code: Section 201
(relating to bribery), section 224 (relating to sports brib-
ery), sections 471, 472, and 473 (relating to counter-
feiting), section 659 (relating to theft from interstate
shipment) if the act indictable under section 659 is fe-
lonious, section 664 (relating to embezzlement from pen-
sion and welfare funds), sections 891-894 (relating to
extortionate credit transactions), section 1084 (relating
to the transmission of gambling information), section
1341 (relating to mail fraud), section 1343 (relating to
wire fraud), section 1503 (relating to obstruction of jus-
tice), section 1510 (relating to obstruction of criminal
investigations), section 1511 (relating to the obstruction
of State or local law enforcement), section 1951 (relating
to interference with commerce, robbery, or extortion),
section 1952 (relating to racketeering), section 1953 (re-
lating to interstate transportation of wagering para-
phernalia), section 1954 (relating to unlawful welfare
fund payments), section 1955 (relating to the prohibition
of illegal gambling businesses), sections 2314 and 2315
(relating to interstate transportation of stolen property),
sections 2341-2346 (relating to trafficking in contraband
cigarettes), sections 2421-24 (relating to white slave
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traffic), (C) any act which is indictable under title 29,
United States Code, section 186 [29 USCS § 186] (deal-
ing with restrictions on payments and loans to labor
organizations) or section 501(c) [29 USCS § 501(c)] (re-
lating to embezzlement from union funds), or (D) any
offense involving bankruptcy fraud, fraud in the sale of
securities, or the felonious manufacture, importation, re-
ceiving, concealment, buying, selling, or otherwise deal-
ing in narcotic or other dangerous drugs, punishable
under any law of the United States;
(2) ‘State’? means any State of the United States, the
District of Columbia, the Commonwealth of Puerto Rico,
‘any territory or possession of the United States, any
political subdivision, or any department, agency, or in-
strumentality thereof;
(3) “person” includes any individual or entity capable of
holding a legal or beneficial interest in property;
(4) “enterprise’’ includes any individual, partnership,
corporation, association, or other legal entity, and any
union or group of individuals associated in fact although
not a legal entity;
(5) “‘pattern of racketeering activity”’ requires at least
two acts of racketeering activity, one of which occurred
after the effective date of this chapter [enacted Oct. 15,
1970] and the last of which occurred within ten years
(excluding any period of imprisonment) after the com-
mission of a prior act of racketeering activity;
(6) “unlawful debt’? means a debt (A) incurred or con-
tracted in gambling activity which was in violation of
the law of the United States, a State or political sub-
division thereof, or which is unenforceable under State
or Federal law in whole or in part as to principal or
interest because of the laws relating to usury, and (B)
which was incurred in connection with the business of
gambling in violation of the law of the United States,
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a State or political subdivision thereof, or the business
of lending money or a thing of value at a rate usurious
under State or Federal law, where the usurious rate is
at least twice the enforceable rate;
(7) ‘racketeering investigator’’ means any attorney or
investigator so designated by the Attorney Generali and
charged with the duty of enforcing or carrying into ef-
fect this chapter [18 USCS §§ 1961 et seq.];
(8) ‘racketeering investigation” means any inquiry con-
ducted by any racketeering investigator for the purpose
of ascertaining whether any person has been involved
in any violation of this chapter [18 USCS §§ 1961 et
seq.] or of any final order, judgment, or decree of any
court of the United States, duly entered in any case or
proceeding arising under this chapter [18 USCS §§ 1961
et seq.];
(9) “documentary material’ includes any book, paper,
document, record, recording, or other material: and
(10) “‘Attorney General” includes the Attorney General
of the United States, the Deputy Attorney General of
the United States, any Assistant Attorney General of
the United States, or any employee of the Department
of Justice or any employee of any department or agency
of the United States so designated by the Attorney Gen-
eral to carry out the powers conferred on the Attorney
General by this chapter [18 USCS §§ 1961 et seq.]. Any
department or agency so designated may use in inves-
tigations authorized by this chapter [18 USCS §§ 1961
et seq.] either the investigative provisions of this chapter
[18 USCS §§ 1961 et seq.] or the investigative power
of such department or agency otherwise conferred by
law.
§ 1962. Prohibited activities
(a) It shall be unlawful for any person who has received
any income derived, directly or indirectly, from a pattern
of racketeering activity or through collection of an unlaw-
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ful debt in which such person has participated as a prin-
cipal within the meaning of section 2, title 18, United
States Code [18 USCS § 2], to use or invest, directly or
indirectly, any part of such income, or the proceeds of
such income, in acquisition of any interest in, or the es-
tablishment or operation of, any enterprise which is en-
gages in, or the activities of which affect, interstate or
foreign commerce. A purchase of securities on the open
market for purposes of investment, and without the in-
tention of controlling or participating in the control of the
issuer, or of assisting another to do so, shall not be un-
lawful under this subsection if the securities of the issuer
held by the purchaser, the members of his immediate fam-
ily, and his or their accomplices in any pattern or rack-
eteering activity or the collection of an unlawful debt after
such purchase do not amount in the aggregate to one
percent of the outstanding securities of any one class, and
do not confer, either in law or in fact, the power to elect
one or more directors of the issuer.
(b) It shall be unlawful for any person through a pattern
of racketeering activity or through collection of an unlaw-
ful debt to acquire or maintain, directly or indirectly, any
interest in or control of any enterprise which is engaged
in, or the activities of which affect, interstate or foreign
commerce.
(c) It shall be unlawful for any person employed by or
associated with any enterprise engaged in, or the activities
of which affect, interstate or foreign commerce, to conduct
or participate, directly or indirectly, in the conduct of such
enterprise’s affairs through a pattern of racketeering ac-
tivity or collection of unlawful debt.
(d) It shall be unlawful for any person to conspire to vi-
olate any of the provisions of subsections (a), (b), or (c) of
this section.
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§ 1963. Criminal penalties
(a) Whoever violates any provision of section 1962 of this
chapter [J8 USCS § 1962] shall be fined not more than
$25,000 or imprisoned not more than twenty years, or
both, and shall forfeit to the United States (1) any interest
he has acquired or maintained in violation of section 1962
[18 USCS § 1962], and (2) any interest in, security of,
claim against, or property or contractual right of any kind
affording a source of influence over, any enterprise which
he has established, operated, controlled, conducted, or par-
ticipated in the conduct of, in violation of section 1962 [18
USCS § 1962].
(b) In any action-brought by the United States under this
section, the district courts of the United States shall have
jurisdiction to enter such restraining orders or prohibi-
tions, or to take such other actions, including, but not
limited to, the acceptance of satisfactory- performance
bonds, in connection with any property or other interest
subject to forfeiture under this section, as it shall deem
proper.
(c) Upon conviction of a person under this section, the
court shall authorize the Attorney General to seize all prop- ~
erty or other interest declared forfeited under this section
upon such terms and conditions as the court shall deem
proper. If a property right or other interest is not exer-
cisable or transferable for value by the United States, it
shail expire, and shall not revert to the convicted person.
All provision of law relating to the disposition of property,
or the proceeds from the sale thereof, or the remission or
mitigation of forfeitures for violation of the customs laws,
and the compromise of claims and the award of compen-
sation to informers in respect of such forfeitures shall
apply to forfeitures incurred, or alleged to have been in-
curred. under the provisions of this section, insofar as
applicable and not inconsistent with the provisions hereof.
Such duties as are imposed upon the collector of customs
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or any other person with respect to the disposition of
property under the customs laws shall be performed under
this chapter [18 USCS §§ 1961 et seq.] by the Attorney
General. The United States shall dispose of all such prop-
erty as soon as commercially feasible, making due provi-
sion for the rights of innocent persons.
§ 1964. Civil remedies
(a) The district courts of the United States shall have ju-
risdiction to prevent and restrain violations of section 1962
of this chapter [18 USCS § 1962] by issuing appropriate
orders, including, but not limited to: ordering any person
to divest himself of any interest, direct or indirect, in any
enterprise; imposing reasonable restrictions on the future
activities or investments of any person, including, but not
limited to, prohibiting any person from engaging in the
same type of endeavor as the enterprise engaged in, the
activities of which affect interstate or foreign commerce;
or ordering dissolution or reorganization of any enterprise,
making due provision for the rights of innocent persons.
(b) The Attorney General may institute proceedings under
this section. In any action brought by the United States
under this section, the court shall proceed as soon as prac- |
ticable to the hearing and determination thereof. Pending
final determination thereof, the court may at any time
enter such restraining orders or prohibitions, or take such
other actions, including the acceptance of satisfactory per-
formance bonds, as it shall deem proper.
(c) Any person injured in his business or property by rea-
son of a violation of section 1962 of this chapter [18 USCS
§ 1962] may sue therefor in any appropriate United States
district court and shall recover threefold the damages he
sustains and the cost of the suit, including a reasonable
attorney’s fee.
(d) A final judgment or decree rendered in favor of the
United States in any criminal proceeding brought by the
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United States under this chapter [18 USCS §§ 1961 et
seq.] shall estop the defendant from denying the essential
allegations of the criminal offense in any subsequent civil
proceeding brought by the United States.
bo
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INDEX TO THE TRIAL TRANSCRIPT
Friday, April 25, 1986, Trial Court Docket No.
154,p.p.1-46 (argument Renewed Motion for Sum-
mary Judgment).
Monday, June 30, 1986, Trial Court Docket No.
291,p.p.1-50 (preliminary trial matters; Motions in
Limine, etc.).
Tuesday, July 1, 1986, Trial Court Docket No.
198,p.p.1-56 (preliminary instructions; legai argu-
ments).
Tuesday, July 1, 1986, Trial Court Docket No.
292,p.p.1-50 (opening statements)
Tuesday, July 1, 1986, Trial Court Docket No.
199,p.p.1-143 (Sage).
Wednesday, July 2, 1986, Trial Court Docket N
199A, p.p.1-34 (legal arguments)
Wednesday, July 2, 1986, Trial Court Qocket N
293,p.p.1-107 (Sage; McCaw)
Monday, July 7, 1986, Trial Court Docket Nv
294,p.p.1-20 (Motion for Continuancs
Wednesday, July 9, 1986, Tria) Court Docket No.
219,p.p.1-277 (McCaw; Bridges).
: Thursday, July 10, 1986, Trial Court Docket No.
220,p.p.1-281 (Bridges; Stanfield; Michlik; Penny-
packer).
Friday, July 11, 1986, Trial Court Docket No.
221,p.p.1-240 (Kimberlin; Smith; McGlaughlin; Alex-
ander; Miller; Elliott; Helle).
2: Saturday, July 12, 1986, Trial Court Docket No.
222.p.p.1-240 (J.D. Rogers; Gilmore; Gano; Miller,
C.Bridges; B.Koontz; Dunn).
Monday, July 14, 1986, Trial Court Docket No.
223 p.p.1-236 (Northcutt; Bauer, Wilder; Haynes;
Zeilman; Lacox; Wiggins).
14:
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Tuesday, July 15, 1986, Trial Court Docket No.
224,p.p.1-189 (Strate; J.R. Rogers).
: Wednesday, July 16, 1986, Trial Court Docket No.
226,p.p.1-27 (McCaw).
- Wednesday (mislabeled ‘‘Tuecday’’), July 16, 1986,
Trial Court Docket No. 225,p.p.1-52 (jury instruc-
tions conference).
7: Wednesday (mislabeled “‘July 10, 1986”), July 16,
1986, Trial Court Docket No. 295,p.p.1-134 Qury in-
structions conference).
: Thursday, July 17, 1986, Trial Court Docket No.
296,p.p.1-175 (jury instructions conference).
Friday, July 18, 1986, Trial Court Docket No.
242\p.p.1-178 (closing argument; verdict).
Tuesday, October 14, 1986, Trial Court Docket No.
247,p.p.1-37 (argument on post-trial motions).
November 14, 1986, Trial Court Docket No.
(hearing on motions).
11. 1986. Trial Court Docket No
‘ 4
+ (A1exander).
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.