Campaign donor can't sue disgraced ex-congressman Schock for 'dishonesty'

By Scott Holland | Apr 3, 2017

A federal judge has dismissed a lawsuit brought by a campaign donor against former U.S. Rep. Aaron Schock, who resigned his post amid allegations of financial impropriety, saying the donor can’t sue the ex-congressman for fraud because he may have acted dishonestly.

The judge, however, also declined to grant the politician’s request for sanctions against the plaintiff for bringing a potentially frivolous claim.

Shock, a Peoria Republican, resigned from Congress on March 31, 2015, among reports of financial impropriety in several areas, including mileage reimbursement claims filed with the House Administration Committee, covert contributions through real estate sales, spending office funds on private flights and failing to report in-kind gifts.

In the wake of the resignation, Howard Foster — who met with Schock in 2011 and gave $500 to his campaign in 2012 — sued Schock, claiming the representations about Schock’s reputation in fundraising solicitations constituted fraud. Though the initial complaint was dismissed without prejudice for failure to plead with specificity, Foster filed an amended complaint seeking for himself and other donors relief from Schock and unnamed collaborators under a federal racketeering law’s mail and wire fraud provisions.

Judge Andrea R. Wood ruled on the case March 30 in Chicago, paying special attention to the communications and campaign materials Foster cited as evidence, including printed campaign materials; a Nov. 4, 2011, email from GOP fundraiser Lisa Wagner; a Nov. 13, 2011, email from Schock; and a June 27, 2012, Schock press release sent after Foster’s donation that positioned Schock as a longtime vocal critic of disgraced Illinois Gov. Rod Blagojevich.

“In the commercial context,” Wood wrote, referencing the 2004 Seventh Circuit Appeals Court opinion in Corley v. Rosewood Care Center, Inc., “vague and subjective statements of positive attributes are considered ‘puffery upon which no reasonable person could rely’ and are thus properly found to be insufficient to support claims of fraud. Numerous courts have found general expressions of honesty and integrity not to be actionable under this analysis.”

She said Foster’s most specific allegations were Schock’s references to himself as “honest” and “different” from other Illinois politicians, noting the other statements Foster cited “are the sort of generic claims of honesty and integrity that are too vague to be considered definitive representations upon which Foster, or any reasonable person, could rely. The elevated skepticism directed toward political communications only pushes Schock’s statements further into the realm of inactionable puffery.”

As to Foster’s claim he only donated because Schock’s dishonesty was concealed, Wood noted “a failure to disclose information is fraudulent only if the defendant has an independent duty of disclosure or if he has communicated affirmative misrepresentations or partial truths that make his silence misleading.” Further, Wood said Foster didn’t allege Schock “owed him any independent duty of disclosure.” She further noted her dismissal of the fraud claim also defeats Foster’s unjust enrichment claim and that his “promissory estoppel claim is similarly insufficient.”

Schock asked the court to sanction Foster for filing his amended complaint, arguing it suffers the safe deficiencies as the original and he had no purpose in a second attempt. Wood disagreed, noting the “amendment did add specificity not present in the original complaint: rather than generalized assertions of misleading statements, the amended complaint identified parties, dates, and transmission methods of six specific communications.”

That the pleading was insufficient to avoid dismissal, Wood explained, is not a reason to find it violates Rule 11 of the Federal Rules of Civil Procedure.

Wood dismissed Foster’s amended complaint with prejudice and denied his motion for leave to take discovery.

Foster was represented in the action by attorneys with the firm of Hagens Berman Sobol Shapiro LLP, of Chicago.

Schock was defended by attorneys with McGuireWoods LLP, of Chicago.

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Organizations in this Story

Congressman Aaron Schock Hagens Berman Sobol Shapiro, LLP McGuireWoods LLP U.S. District Court for the Northern District of Illinois

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