City may face long legal fight: Bar lawsuit could be costly slog, experts say

2014-03-08T22:28:00Z 2014-07-01T07:06:47Z City may face long legal fight: Bar lawsuit could be costly slog, experts sayCARA SPOTO Journal Times

RACINE — A civil rights lawsuit filed last month against the city and a host of local officials and organizations could turn into a long, costly fight, legal experts say.

Filed Feb. 25 in the Federal District Court for the Eastern District of Wisconsin by attorneys representing the owners of six shuttered Racine bars, the lawsuit alleges that Mayor John Dickert and other local leaders conspired to drive minority-owned bars out of the city.

As City Hall prepares for court — it has already hired outside counsel and set a meeting to ask aldermen what direction the city should take — constitutional and civil rights law professors said the city could find itself looking at a pricey settlement or equally costly legal battle.

Proof and cost

There are really two aspects that could make the case an expensive one for the city and other defendants, Marquette University law professor Joseph Hylton said. One is the sheer number of people involved in the case — 19 defendants and eight plaintiffs.

Professors Andrew Coan and Donald Downs of the University of Wisconsin-Madison agree.

With the city facing the potential of having to defend close to a dozen current and former city officials and staff members, while also cooperating with the investigations of the plaintiffs’ attorneys, the legal fees could add up quickly.

Add to that the specter of having to pay triple damages to the eight plaintiffs in the case as well as their legal fees if the city loses, and the costs for both the court battle and its outcome could be steep, Hylton said.

“These can be extremely expensive to litigate,” he said. “Sometimes they are just filed strategically to force along a settlement.”

Downs, a UW-Madison political science professor who also is affiliated with the university’s law school, added that the plaintiffs’ attorneys might have filed such a large and complex complaint hoping the city might consider settlement over a an expensive legal battle.

“If a judge sees smoke, and thinks there might be fire there, it is going to get even more in-depth during the discovery process,” he said.

Should the city lose or decide to settle, it would be on the hook for the first $100,000 of any settlement, after which its insurance and the insurance of an municipal organization it belongs to would kick in.

Not uncommon

In addition to claiming they held the plaintiffs and other minority-owned bar owners to different standards than their white counterparts, the lawsuit accuses Dickert and others, including members of the Racine City Tavern League, of engaging in an elaborate scheme to fund Dickert’s mayoral campaigns that led to minority-owned bars being targeted and their licenses freed up for white bar owners.

The lawsuit claims the city and others, including police and the Public Safety and Licensing Committee, repeatedly violated Section 1983 of the U.S. Civil Rights code, by, among other things, conspiring to “target, unjustly scrutinize, discriminate, and unfairly burden” the plaintiffs’ bars simply because of their race.

The lawsuit also alleges defendants violated the Racketeer Influenced and Corrupt Organizations Act, often referred to as RICO.

Although Section 1983 of the U.S. Civil Rights code — passed in the 1870s — was originally designed to keep Southern white public officials from suppressing former slaves, today it has become the go-to law for individuals claiming their government violated their rights, Hylton said.

He adds that while it is “obviously much easier to allege a violation” of the law than it is to prove it, the basic question for any judge handling such a case is “are the allegations true?”

The main task facing the plaintiffs’ attorneys will be demonstrating to the court that “the government actions they are challenging” were “in fact based on race as opposed to some other motivation,” said Coan, a professor at the UW’s law school.

Dismissal seen as unlikely

While there is always a chance that a judge will dismiss the case as being without merit, that is not something Hylton, who reviewed the case, thinks will happen.

“If these allegations are true, they clearly have a case,” he said. “This is not the kind of matter that is going to be dismissed at the outset.”

He added that, at least in terms of the section 1983 portion of the case, the plaintiffs may not even need to provide a document or some other evidence showing their intent to treat minority-owned bars differently.

“If you could actually establish that the same type of conduct was happening in white-owned bars as well as minority-owned bars, but the kind of sanctions or intensified investigations were only directed at minority-owned bars, that would itself be evidence of discriminatory conduct,” he said.

The burden of proving such pattern or intent, however, lies squarely with the plaintiffs, Downs said. If the city can prove it treated white-owned bars similarly or that there were non-racial reasons behind its reasons for shuttering black-owned bars, it could prevail.

“It will be a question of who has the best evidence,” he said.

Asked for comment, Marty Kohler of Kohler & Hart S.C., one of the two firms representing the plaintiffs, sent an email Friday stating that the firm had “spent the better part of a year investigating” the case and believes in its “clients and the merits of the lawsuit.”

“The 50-page complaint lays out the details of the information we have uncovered to date and we intend to prove every allegation,” Kohler wrote.

The city’s attorney in the case, Michael J. Cohen of Milwaukee-based Meissner Tierney Fisher & Nichols S.C., was unavailable for comment Friday.

What's next

City officials will meet in coming weeks to discuss how to handle the lawsuit, while a trial date has yet to be set.

The Committee of the Whole will meet Tuesday to discuss the case, including which of the of defendants that have ties with the city it will pay to represent, Deputy City Attorney Scott Letteney said.

The committee’s recommendations will go before the City Council for a final vote on March 18.

The federal judge assigned to the case will likely set a tentative trial date relatively early on, although that date could well be months away, said Marquette University law professor Joseph Hylton.

In the event that the city ends up losing the lawsuit or decides to settle the case, it does have insurance it will be able to draw on, but only after paying out $100,000 in city funds.

“Assuming coverage is permitted by the insurer, the city would pay the first $100,000 and the insurance provider would then pick up the next $100,000,” explained Letteney.

If a settlement or court ruling requires any larger payment, then city could tap into a $10 million policy it has via its membership with the Cities and Villages Mutual Insurance Co.

If it gets to that point, CVMIC members would first have the privilege of weighing in on the procedures.

“It is just like any insurance policy. If you get in a car wreck, your insurer would decide whether to settle or not,” Letteney explained. “They can’t just make the city (settle) but they certainly would have an influence.”

Copyright 2016 Journal Times. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(24) Comments

  1. vinny10
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    vinny10 - March 15, 2014 12:57 am
    Waste of time & most of all money that could definitely be used elsewhere! What do the bar owners want the outcome to be?? Reopen your establishments? Probably had the opportunity to change some things before it got to this point. Over 100 other long running bars in Racine that don't seem to have issues?! Why should "WE" be responsible because you cannot control your clientele?! It's scary as heck trying to make your way home through 500+angry intoxicated people at 2:30 AM fighting in the middle of the street?! Didn't happen just one time either....Try another business venture that might work for you or something else POSITIVE to do!!
  2. Zigmond
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    Zigmond - March 13, 2014 9:25 pm
    One thing I know is that the claim of RACISM still holds much power. BUT, like the boy crying wolf. it fades away every day it is thrown around as just another noun.
  3. BThomWI26
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    BThomWI26 - March 10, 2014 7:54 pm
    First Friday out of hand and it forced Downtown to shut down? Please elaborate. I work downtown....this does not ring a bell.
  4. racinetoday
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    racinetoday - March 10, 2014 2:28 pm
    How were the experts for this article selected? Were they just in town or friends of the JT or were they paid by the JT or others? Just seems strange that they would be so up to speed and anxious to volunteer their detailed opinions since none of them appear to be local residents. Would other experts have significantly different viewpoints?

    Racine's lawyers advertise as "simply the best" with over a 150 year history of excellence and success; they appear to be located in the high rent district of Milwaukee which probably means that they are highly paid. It is probably best that they defend the whole group which would streamline the management of information, avoid additional lawsuits, and to simplify billing for the City's benefit. The article doesn't state whether the City will be reimbursed for legal and other expenses if the defense wins the case; but will it be possible to collect from these failed business owners?

    I suspect there is something wrong with the last paragraph of the article or Mr. Lettteney misspoke or failed to complete his reasoning as the logic seems flawed. Perhaps a correction is in order and hopefully future articles can shed more light on:
    How the experts were selected?
    How was the defense legal firm selected (no pay unless we win; low evaluated bidder, no qualified firm in Racine, spare no expense)?
    Will the City recover legal and other expenses if the defense prevails in this matter.
  5. LoveRacine
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    LoveRacine - March 10, 2014 10:36 am
    I have to say, after reading the complaint, there is a lot to be explained. And, based solely on the information in the complaint, there is no reason why a few other bars should not have lost their licenses and, the campaign violation allegations should not be investigated further. If the pattern of conduct by the city presented here can be substantiated further, there is "big trouble in River City."
  6. Xright
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    Xright - March 10, 2014 7:05 am
    Money Grab!
  7. kevinsmom68
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    kevinsmom68 - March 09, 2014 10:32 pm
    Better put the breaks on that root river project, gonna need some tax payer dollars for court
  8. Kate Remington
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    Kate Remington - March 09, 2014 6:45 pm
    ggodmuls, there have been countless warnings .... as you well know. Alderman Keith Fair warned the council and his peers at City Hall repeated until he was himself targeted. Alderman Eric Marcus boldly presented options to law breaking and was ignored and when he became too annoying, he was dealt with in a personal, hurtful, contemptible and public way. Thomas Holmes has no match, he puts it all right there at the podium. Former Car 25 wizard Scott Nelson? He must just be too talented! Funny how his talent is what is needed now and missing from the scene. Last time I heard Attorney Bobot in court he was having to accommodating yet another delay tactic for his client and he calmly voiced how all the delays were getting costly.
  9. Rick Ray Earle
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    Rick Ray Earle - March 09, 2014 5:27 pm
    "Other bars within the city may also have periodic complaints but, not a repeated violent, disruptive conduct pattern such as these." Wrong. Other white owned bars have the same violence, but they're connected so it's not reported. All Sports had more reported incidents than Park 6 but was allowed to change agents (a paper shuffle) to stay open. Mr. Holmes, the owner of Park 6, was told he couldn't change agents. The difference? It's black and white.

    How about ongoing problems at Pepi's, right across from City Hall? The city and newspaper are silent on the police calls there. Again, connected owner. So connected that a convicted felon is allowed to carry a gun without consequence.

    Did your read in the Journal Times about the time that First Friday got out of hand and the police had to shut down downtown? Of course not, they don't report these things. The Journal Times is part of the problem. If they reported the truth, Dickert never would have been elected in the first place. I lay this at the Journal Times' doorstep as much as at lying John's. They failed repeatedly to inform the public of malfeasance in office by our "leaders." If the JT had reported the truth, we would have been rid of gangsters running city hall a long time ago.

    Dickert's bullying and race hatred dooms Racine. We're always number one in unemployment and number one in racism. Thank you, lying John and Journal Times.
  10. ggodmuls
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    ggodmuls - March 09, 2014 4:52 pm
    Bobot did say that he has warned Racine officials repeatedly that the way they were handling liquor licenses was wrong and unlawful. "I told the coucil 'you'll get sued and it will cost the city tons of money Dont' do it.'"

    "The facts are only going to get worse for the city of Racine when it goes to depositions," Bobot predicted. "It's alarming."

  11. ggodmuls
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    ggodmuls - March 09, 2014 2:42 pm
    The testimony and evidence should be interesting. Are the allegations false, or is it more evidence of Scam-O-Rama Racine? And why are the taxpayers once again picking up the tab to defend John Dickert when he is campaigning? This is the second time. HYE! Tell RUSD it's working.

    Dickert also received thousands of dollars in personal loans that were deposited into his personal bank account. The personal loans, which came from sources including a family member living outside the State of Wisconsin and a member of Dickert’s campaign staff, were elicited for the purpose of circumventing the maximum allowable campaign contributions. Dickert then used the proceeds to write checks to his campaign under the guise that they were coming from a personal loan Dickert made to his own campaign fund. With the full knowledge and consent of Dickert, the loans were then fraudulently reported by Dickert’s campaign staff on campaign finance reports, as the true identities of the donors were never revealed. The fraudulent loan monies were deposited in the bank account of Dickert’s campaign organization, “The Friends of Dickert.”

    IS this allegation true?

    On April 19, 2012, at 1:05 a.m., Metro Security reported that the Police Department was called to Envi at 316 Main St. for a fight involving five to six people. The owner of Envi, Defendant Nicholson, is white and member of the Tavern League. The bar was, and still is, predominantly frequented by white patrons. Five police squads reported to the area
    to look for a suspect. After ten to fifteen minutes, the police left the area. Metro officers heard a police officer advise dispatch that the location of the call should be referred to generically as the “300 block of Main Street” as to avoid having it linked directly to Envi. The matter was never brought before the Licensing Committee.

    Here is the video of the Park 6 window being shot.

    Here is how Alderman Jeff Coe, RPD Chief Kurt Whalen, and the Public Safety and Licensing committee reacted:

    As an example of just one of the so-called “incidents” precipitating the Licensing Committee’s investigation into Park 6, on May 20, 2010, a Park 6 security guard was hit in the ankle by a stray bullet shot from down 6th Street at closing time. Sometime after the shooting, Holmes learned who shot the stray bullet, which he told to 1st District Alderman Jeff Coe, who then contacted Chief Wahlen of the Police Department. Wahlen, however, declined to investigate the matter further. The case remains unsolved to date; yet, Park 6 was blamed for the incident at subsequent due process hearings.

  12. Unreal Racine
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    Unreal Racine - March 09, 2014 2:41 pm
    The taxpayers should not be paying for their legal defense, and those accused of any wrongdoing should be required to pay for that individually. Then they will start to come forward and tell the truth about what really happened. Since the officials acted beyond their official capacity in the charges alleged, including racketeering, money laundering, bid rigging, and discrimination, city council needs to disallow those involved individually from voting on paying for their own legal defense, and the other Aldermen should vote to NOT spend taxpayer money defending these people on an individual basis. If the city does assume legal defense and responsibility, it could end up costing the community so much more.

    Everyone is entitled to their opinion about the bars or bar owners, but the fact remains that if ANY of the allegations are true, which MANY of them likely are based on public records alone, this goes way beyond any simple race issue - the alleged corruption is involved in so many aspects of our local government - even to the effect that they rigged the CAR25 contract for the Mayor's friends, they tried giving away Indian Burial Mounds to other friends, they gave no-bid contracts to other friends, they aren't properly enforcing tax collections, they are inflating property assessments, and they are lying about fees and services, as well as lying our budget to take more away from the community only to give more to their friends. There are many more questions about the Porters pay off, the zoo, city hall renovations, the roundabout, and more. All emails, texts and phone records should be part of the discovery process. What else will be found in the process?

    The community just wants to be treated fairly, and you cannot run a local government like a private insiders club, which is what has clearly happened, while violating the rights of community members to give special favors and contracts to friends. That is unethical and illegal. Racine needs a fresh start, and these people need to be removed from office and officially charged for any crimes they were involved in.
  13. Kate Remington
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    Kate Remington - March 09, 2014 1:41 pm
    I thought when I saw the headline, "City could face long legal fight; bar lawsuit could be costly slog, experts say" this would be just another shallow one-sided story. The body of the article, however, has some substance, Cara! You have been working hard covering this beat! Reality sets in slowly in Racine. City Hall has been silent too long and the Court now will determine who is predatory and who is dishonest. Defendants finally face the music.
  14. Racines Finest Truth
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    Racines Finest Truth - March 09, 2014 1:33 pm
  15. MBA
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    MBA - March 09, 2014 1:22 pm
    This is going to be fun to watch.
  16. johmny
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    johmny - March 09, 2014 12:18 pm
    The race card. Never leave home with out it.
  17. Northside02
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    Northside02 - March 09, 2014 11:58 am
    I agree that our mayor has no idea what he's doing. But the whole point is that the owners now probably don't really have an income and there mad and thinking of ways to get back at the city! So now they want to find a way to make a quick buck and pull the race card. If you look around this city and country WHITE PEOPLE are the minority and still you don't see many of them claiming racial BS! Just because these owners didn't comply with the cities demands and warnings that's there fault! And now they shut them down because of all the problems with the type of people that went there! It's Not the cities fault! They did what they thought was the safest thing to do for the city and the people! If the owners didn't want there bars shut down then they should have made a better effort in stopping the violence, drug use at and around there establishment! And in all honesty I could care less about them and there bars! Downtown is safer without them.
    P.S At least this mayor is better than Becker!
  18. Northside02
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    Northside02 - March 09, 2014 11:23 am
    I agree that our mayor has no idea what he's doing! But the whole point of this lawsuit is for these owners to find an easy way to collect money! And in all honesty I could care less about these owners and there bars. They attracted that kind of crowd to there establishment. They knew what they were doing and what would happen when these types of crowds were out! If they really wanted to keep there bars they would have comply
  19. LoveRacine
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    LoveRacine - March 09, 2014 10:58 am
    "Chicago style politics, "massive corruption, "RICO," "money laundering,"----what is wrong with you people! Inflammatory statements with no specifics to backup your claims. The plaintiffs and their attorneys see deep-pockets and good insurance. Regardless of who owned these bars, they were a blight on the city. Other bars within the city may also have periodic complaints but, not a repeated violent, disruptive conduct pattern such as these. It would be interesting to know which one of the plaintiffs organized these owners and where their money is coming from to fund the lawsuit.
  20. Racines Finest Truth
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    Racines Finest Truth - March 09, 2014 10:25 am
    Massive corruption = "We didn't behave, we got shut down and now we are pissed, but have a new strategy of blame". It's unfortionate that individuals prefer to be more versed in dirty racial politics and positioning than getting the education they are so sorely lacking. It won't change, however, as generation after generation pass the batton of playing the role of the victim over leadership.
  21. PrimeTime69
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    PrimeTime69 - March 09, 2014 9:15 am
    A lawfirm with the reputation of Kohler & Hart would never be involved in a case this size without being 200 percent sure of the legal details. The real question is who will go to prison and who will step up to lead the community and rid itself of massive corruption? I suggest all residents actually read the lawsuit. This is as bad as it gets for a city and it's residents.
  22. racinelol
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    racinelol - March 09, 2014 8:52 am
    Yes this is ludicrous.
  23. MCP
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    MCP - March 09, 2014 12:12 am
    If the city loses or settles the defendants are guilty and should be removed from office immediately. It's time to get Chicago style politics out of Racine. This mayor has been a disaster and promotes this type of behavior. Look at how many alderman and city officials have been in the news for civil or criminal misbehavior/crimes in the past several years. It's time to cut the head off the snake and get Dickert out!
  24. PrimeTime69
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    PrimeTime69 - March 09, 2014 12:00 am
    Oh man, this is just the begining of this, CAR25 and that whole debacle and those involved with that ordeal will be dragged into this as part of the RICO. The real questions now the community needs to ask are: Who will the taxpayers be paying for with this lawsuit? What happens to Racine if they lose? How many millions and millions will be paid out? Who goes to prison? There are federal racketering and money laundering charges as well. What happens to those named in this suit who are named INDIVIDUALLY? Lots of questions and I think the residents deserve answers and resignations, who will go down with Dickert?
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