Jenner & Block

Seventh Circuit Affirms Dismissal of RICO Suit Against Jenner & Block Clients as "Groundless"

In a victory for Jenner & Block clients, Stephen Tillery, Steven Katz and Douglas Sprong, the U.S. Court of Appeals for the Seventh Circuit affirmed the dismissal of a RICO lawsuit filed by ex-partner of their law firm, Rex Carr. Carr alleged that he had been defrauded in the division of fees earned in the successful prosecution of a number of ERISA cases against major corporations that resulted in substantial recoveries for retired employees who elected to take their pensions in lump sums rather than wait upon age-65 annuities. The RICO suit was the latest in a series of actions brought and dismissed by Carr in the Illinois state courts.  The District Court dismissed the current case on the basis of res judicata and the Illinois one-refiling rule.

The Seventh Circuit upheld the lower court’s dismissal of the case, but reversed that court's denial of defendants' motion for sanctions and remanded with directions to assess a proper monetary sanction against plaintiff and his counsel for pursuing “groundless" litigation undertaken with a "motive to harass."  The Seventh Circuit noted that in his federal suit, Carr had repackaged the allegations contained in four suits he previously filed in the Illinois courts, which he dismissed within days of filing the federal suit.  The Seventh Circuit also recommended the district court to consider enjoining Carr from conducting further litigation over the distribution of legal fees from his former law firm.

Jenner & Block Partners Lee A. Freeman and James T. Malysiak and Of Counsel Richard P. Campbell handled the case for defendants, and Mr. Freeman argued in the Seventh Circuit.