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Federal judge dismisses racketeering suit against Illinois utility, former state House speaker

The suit failed to allege Michael Madigan, former Illinois speaker of the House, had unduly influenced legislators to enact laws benefitting large electric utility company Commonwealth Edison.

CHICAGO (CN) — An Illinois federal judge all but killed a class action Thursday filed in the name of over 100,000 residents against the state’s largest electric utility and its former speaker of the House, accusing him of bribing lawmakers to enact laws benefiting the company’s bottom line.

The class lodged racketeering claims against Commonwealth Edison, Chicago’s only electricity provider, and Michael Madigan, a Democrat and former Illinois speaker of the House. The suit was run through by the pen of U.S. District Judge Jorge Alonso, an Obama appointee to the Northern District of Illinois.

Though Commonwealth Edison — more commonly known as ComEd — admitted in 2020 to the very bribery scheme described in the class action, Judge Alonso found that the watchdog group bringing the suit had failed to allege that Madigan improperly influenced anyone in the state capitol. He dismissed the case almost entirely.

“Plaintiffs … have not plausibly alleged that Madigan improperly influenced the other legislators who voted to pass the bill,” Alonso wrote in Thursday’s ruling. “Although plaintiff has alleged that Madigan had power over committee assignments, endorsements and fundraising, these allegations are consistent with lawful conduct.”

The complaint was first filed against ComEd in July of 2020 by Lawrence Gress, a resident of the northern Illinois town of Downers Grove. By January, Gress was joined in the suit by The Citizens Utility Board, a state watchdog group that opposed the passage of the 2011 Energy Infrastructure and Modernization Act, aka the Smart Grid Act.

The act’s official purpose was to modernize the state’s energy grid with digital “smart meters,” but it also allowed private utilities — ComEd is Illinois’ largest — to automatically raise electric rates as they see fit. The rates are subject to review by the Illinois Commerce Commission, but only after the utility has already sent the bill.

From 2013 to 2019, ComEd reported consistently high-earning years, turning over $4.7 billion in profits. But according to a 111-page report published last year by the independent nonprofit Illinois Public Interest Research Group, very few Illinoisans have actually seen the improvements ComEd promised would come with their modernization plan.

“ComEd promised that [the Energy Infrastructure and Modernization Act] would deliver significant customer benefits: more information, choice and control, more energy efficiency, and more clean energy. Not only did the company fail to deliver the promised benefits, in some cases it actively blocked them,” the group wrote in its report.

Alonso’s argument does not dispute any facts regarding the benefits — or lack thereof — of the Smart Grid Act, nor does it dispute ComEd’s admitted profiteering. Instead it rests entirely on a philosophical question: Can the plaintiffs establish a causal link between ComEd paying off Madigan, Madigan pressuring fellow lawmakers for votes and those lawmakers passing ComEd-friendly laws?

Alonso said no.

“Plaintiffs’... allegations fall short of proximate causation,” Alonso wrote. “Although plaintiffs allege Madigan brought the bill to the legislature, plaintiffs fail to allege that the bribe of Madigan caused the members of the Illinois House and Senate to vote in favor of [the Smart Grid Act].”

Dismissal of the lawsuit comes as a serious blow to the Citizens Utility Board and other groups looking to hold ComEd accountable. It also comes at a bad time for anyone hoping to take the financial wind out of the utility’s sales. The state Legislature is very close to approving an energy package that, among other things, gives ComEd parent company Exelon subsidies to maintain the state’s two nuclear power plants.

The one spot of hope for Gress and the Citizens Utility Board is that several of the suit’s claims — including those regarding conspiracy, fraud and unjust enrichment — were dismissed without prejudice. This will make filing an appeal that much easier. According to reporting by the Chicago Tribune, Citizens Utility Board executive director David Kolata said the group is already considering its next legal moves.

“We remain committed to holding the utility accountable and securing fair compensation for customers harmed by the ComEd scandal,” Kolata reportedly told the Tribune.

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