## Facts

- Robert and Vera Corley contracted with a Peoria nursing home for care of Robert Corley’s mother, conditioned on a guaranteed private suite for the duration of her stay.
- The Corleys alleged the nursing home operators and related entities used a “bait and switch” scheme to induce admissions with promises about accommodations, care, and pricing, then reduced services and increased charges.
- The Corleys filed a civil RICO action alleging a pattern of racketeering activity, principally multiple acts of mail fraud connected to admissions and billing communications sent to residents and families.
- During discovery, plaintiffs’ counsel conducted voluntary interviews of non-party witnesses under oath with a court reporter; defendants sought, and the district court entered, a protective order effectively treating those interviews as depositions requiring formal deposition procedures.
- The district court later granted summary judgment for defendants on the RICO claim for lack of evidence of the required pattern, and it also awarded costs and imposed a monetary sanction against plaintiffs.

## Issues

1. Whether summary judgment against the plaintiffs’ civil RICO claim was improper because discovery restrictions prevented a fair opportunity to obtain evidence of a RICO “pattern of racketeering activity.”
2. Whether the district court abused its discretion by treating voluntary, sworn, transcribed non-party witness interviews as depositions and restricting them through a protective order.
3. Whether the district court’s awards of costs and a monetary sanction could stand given the reversal of the summary judgment and the discovery rulings supporting it.

## Decision

- The court of appeals reversed the grant of summary judgment on the RICO claim and remanded for further proceedings.
- The court held the district court’s discovery restrictions improperly curtailed plaintiffs’ ability to develop evidence relevant to proving a RICO pattern, making summary judgment premature.
- The court vacated the award of costs and the monetary sanction tied to the district court’s rulings.

## Legal Principles

- Parties may conduct informal discovery by interviewing willing non-party witnesses; the fact that an interview is sworn and transcribed does not, by itself, convert it into a Rule 30 deposition requiring deposition notice and procedures.
- A district court abuses its discretion when it imposes discovery limits that substantially interfere with a party’s ability to gather evidence without adequate justification.
- Summary judgment should not be granted when the non-movant has been denied a fair opportunity to obtain discovery needed to oppose the motion, especially in litigation where proof depends on information held by numerous third parties.
- When a judgment is reversed due to erroneous discovery limitations, related cost and sanction awards premised on that judgment generally must be vacated for reconsideration.

## Conclusion

The Seventh Circuit held that restricting plaintiffs’ voluntary, sworn, transcribed interviews of non-party witnesses improperly impaired discovery and led to a premature summary judgment on the civil RICO claim; it reversed and remanded for further proceedings and vacated the associated costs and monetary sanction.


Corley v. Rosewood Care Ctr., Inc. of Peoria, 142 F.3d 1041 (7th Cir. 1998)