## Facts

- LaSalle Bank Lake View (LaSalle) employed Ellen Seguban as an assistant teller manager for about twelve years.
- LaSalle alleged that Ellen embezzled roughly $940,000 from the bank during her employment.
- LaSalle also sued Ellen’s husband, Rafael Seguban, alleging he accepted and used the stolen funds while knowing they came from illegal activity.
- LaSalle filed a civil action in the Northern District of Illinois asserting federal RICO claims under 18 U.S.C. § 1962(c) and § 1962(d), and supplemental Illinois claims for breach of fiduciary duty, conversion, and fraud.
- While the civil case was pending, the U.S. Attorney for the Northern District of Illinois began a criminal investigation of the Segubans arising from the same alleged conduct.
- LaSalle moved for summary judgment and submitted a statement of material facts under then-applicable N.D. Ill. Local Rule 12(M).
- Facing the ongoing criminal investigation, the Segubans invoked the Fifth Amendment privilege against self-incrimination and declined to submit evidence to rebut LaSalle’s factual statement as contemplated by Local Rule 12(N).
- The district court treated LaSalle’s factual assertions as uncontested, drew an adverse inference from the Segubans’ invocation of the Fifth Amendment, and granted summary judgment.
- The district court entered judgment for $2,820,000 (three times the alleged $940,000 loss) under RICO’s treble-damages provision, 18 U.S.C. § 1964(c).
- The Segubans appealed to the Seventh Circuit, arguing the district court relied improperly on their Fifth Amendment invocation and that LaSalle’s record did not otherwise justify summary judgment.

## Issues

1. Whether, on a plaintiff’s summary-judgment motion in a civil RICO case, the court may treat defendants’ invocation of the Fifth Amendment as an inference of liability sufficient to support judgment.
2. Whether a defendant’s failure to submit a Local Rule 12(N) response (because of Fifth Amendment assertions) permits summary judgment without confirming that the movant’s admissible evidence establishes each element of the claims.
3. Whether LaSalle’s summary-judgment submissions, apart from any adverse inference from the Segubans’ silence, established entitlement to judgment as a matter of law.

## Decision

- The Seventh Circuit reversed the summary judgment and remanded for further proceedings.
- The court recognized that adverse inferences from Fifth Amendment silence may be drawn against civil litigants in appropriate circumstances.
- The court held, however, that an adverse inference cannot serve as the primary substitute for evidence required by Federal Rule of Civil Procedure 56.
- The court concluded the district court did not adequately confirm that LaSalle’s properly supported materials, standing on their own, eliminated any genuine dispute of material fact and proved the elements necessary for civil RICO liability and damages.
- The case was returned to the district court to reassess summary judgment under Rule 56 using competent evidence, without treating the Fifth Amendment invocation as a dispositive admission of liability.

## Legal Principles

- A civil factfinder may, in proper circumstances, draw an adverse inference from a party’s invocation of the Fifth Amendment privilege against self-incrimination.
- At summary judgment, the moving party must support its motion with admissible evidence showing there is no genuine dispute of material fact and that it is entitled to judgment as a matter of law; a defendant’s silence does not shift that burden.
- An adverse inference from Fifth Amendment silence is permissive and evidentiary; it may add weight to existing proof but cannot, by itself, fill gaps necessary to establish liability at the Rule 56 stage.
- Local rules that deem facts admitted for failure to respond (such as N.D. Ill. Local Rule 12(M)/(N)) do not allow a court to bypass the Rule 56 requirement that the admitted facts and supporting record establish each element of the claim and justify judgment.

## Conclusion

LaSalle Bank Lake View v. Seguban holds that while adverse inferences may be drawn from a civil defendant’s invocation of the Fifth Amendment, summary judgment in a civil RICO action cannot rest mainly on that inference; the plaintiff must still present competent Rule 56 evidence that, even if treated as undisputed under local summary-judgment rules, proves the required elements and supports judgment as a matter of law.


LaSalle Bank Lake View v. Seguban, 54 F.3d 387 (1995)