Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-00-07095/USCOURTS-caDC-00-07095-0/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 21, 2001 Decided May 22, 2001

No. 00-7093

Service Employees International Union Health

and Welfare Fund, et al.,

Appellees

v.

Philip Morris Incorporated, et al.,

Appellants

---------

Consolidated with

Nos. 00-7094, 00-7095, 00-7096, 00-7097,

00-7098, 00-7099, 00-7100

Appeals from the United States District Court

for the District of Columbia

(No. 98cv00704)

(No. 98cv01569)

(No. 98cv01716)

(No. 99cv02326)

(No. 99cv03080)

(No. 99ms00213)

---------

USCA Case #00-7095 Document #597780 Filed: 05/22/2001 Page 1 of 15
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No. 00-7023

The Republic of Guatemala

Appellant

v.

The Tobacco Institute, Incorporated, et al.,

Appellees

---------

Consolidated with

Nos. 00-7118, 00-7120

Appeals from the United States District Court

for the District of Columbia

(No. 98cv00704)

(No. 98cv01185)

(No. 99cv01535)

(No. 99cv03080)

(No. 99ms00213)

Herbert M. Wachtell argued the cause in No. 00-7093 for

appellants. With him on the briefs were Peter C. Hein,

David S. Eggert, Timothy M. Broas, Michael K. Atkinson,

Robert F. McDermott, Jr., Paul S. Ryerson, Robert H. Klonoff, Paul Reichert, Kenneth N. Bass, Leigh Hyer, Janet L.

Goetz, Joseph Barloon, Keith A. Teel, D. Edward Wilson,

Michael B. MacWilliams, Peter A. Woolson, Judah Best and

John Parker Sweeney. Newman T. Halvorson, Jr. entered

an appearance.

Michael C. Spencer argued the cause in No. 00-7093 for

appellees. With him on the brief were Daniel Edelman and

Roger M. Adelman.

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Arthur R. Miller argued the cause in No. 00-7023 for

appellants. On the briefs for appellants and amicus curiae

Guatemalan National League Against Cancer were George M.

Fleming, Sylvia Davidow, Andres C. Pereira, Richard M.

Martin, Jr., Nicholas Gilman, and Jonathan S. Massey.

Herbert M. Wachtell argued the cause in No. 00-7023 for

appellees. With him on the brief were Peter C. Hein, Timothy M. Broas, Michael K. Atkinson, Robert F. McDermott,

Jr., Paul S. Ryerson, Kenneth N. Bass, Leigh Hyer, Garyowen P. Morrisroe, Thomas J. McCormack, Timothy M.

Hughes, Robert E. Scott, Jr., Joseph M. McLaughlin, Gene E.

Voigts, Richard L. Gray, John Vanderstar and Judah Best.

Keith A. Teel, David Gruenstein, Daryl L. Joseffer, Michael

A. Schlanger, Peter A. Woolson, and D. Edward Wilson, Jr.

entered appearances.

Robin S. Conrad and Kenneth S. Geller were on the brief

in No. 00-7023 of amicus curiae The Chamber of Commerce

of the United States.

Before: Williams, Sentelle and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Rogers.

Rogers, Circuit Judge: In these two appeals, the court

must determine whether the plaintiffs have demonstrated

proximate cause in seeking, on an aggregate basis, to recover

costs incurred as a result of paying for the health care needs

of individual smokers. The complaints allege conspiracy and

fraud in connection with federal antitrust and racketeering

("RICO") claims as well as antitrust claims under District of

Columbia law and common law claims. Similar claims have

been considered and rejected as too remote by seven other

circuits. Because we agree with the other circuits that the

alleged injuries of the third-party payors are too remote to

have been proximately caused by the defendants' alleged

conduct, we reverse the denial of the motion to dismiss with

respect to the RICO and fraud claims in Service Employees

International Union Health and Welfare Fund v. Philip

Morris Inc., 83 F. Supp. 2d 70 (D.D.C. 1999) ("Service

Employees"), and otherwise affirm the dismissal of the comUSCA Case #00-7095 Document #597780 Filed: 05/22/2001 Page 3 of 15
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plaints in Republic of Guatemala v. Tobacco Institute, Inc.,

83 F. Supp. 2d 125 (D.D.C. 1999) ("Guatemala").

I.

A.

In Service Employees, several labor-management health

trust funds ("the funds"), see 29 U.S.C. s 186(c)(5) (1994),

sued Philip Morris, other tobacco companies, and other entities related to the tobacco industry, alleging a fraudulent

scheme to preserve their control of the cigarette market and

to avoid the costs of treating smoking-related diseases by

counteracting smokers' efforts to quit, by impairing the ability of health care providers to reduce costs through effective

smoking cessation programs and safer cigarettes, and by

concealing the tobacco industry's active role in manipulating

and perpetuating the resulting health care crisis. The funds

seek to recover their payments for participants' smokingrelated health care costs by "su[ing] in their own capacities,

rather than asserting claims in subrogation on behalf of

individual [f]und beneficiaries."

The district court granted the defendants' motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) the

funds' local and federal antitrust claims for lack of an antitrust injury and for failure to specify antitrust damages.

Service Employees, 83 F. Supp. 2d at 89-91. The court

dismissed the funds' fraud claims without prejudice for failure

to plead fraud with particularity as required by Federal Rule

of Civil Procedure 9(b). Id. at 91-92. The district court also

dismissed the funds' special duty, indemnity, and unjust

enrichment claims. Id. at 92-94. Denying the motion to

dismiss with respect to the funds' RICO claims, however, the

district court accepted the funds' characterization of their

injuries as "direct injuries to the trust assets," id. at 86, or

harm "to their infrastructure and financial health and stability," id., and rejected the view that such damages are entirely

derivative of the harm suffered by the funds' beneficiaries, id.

at 89. While the district court acknowledged the analytical

framework provided by the Supreme Court in Associated

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General Contractors of California, Inc. v. California State

Council of Carpenters, 459 U.S. 519 (1983) ("AGC"), and

Holmes v. Securities Investor Protection Corporation, 503

U.S. 258 (1992), it addressed proximate cause in terms of

foreseeability and direct consequences, guided by the twopart test set forth in the Restatement (Second) of Torts s 431

(1965). Service Employees, 83 F. Supp. 2d at 80-83. The

district court concluded that foreseeable harm to the funds

stemming from defendants' alleged conduct was "obvious," id.

at 84, and resolved difficulties otherwise posed by the nature

of the funds' claims by invoking "the inherent ability and

flexibility of our common-law based legal system to respond

to the demands of a case as difficult as this," id. at 79-80.

The defendants, in seeking reversal on the RICO and fraud

claims, rely principally on what they characterize as "150

years of controlling precedent" regarding proximate cause

under the common law that the Supreme Court's decisions in

AGC and Holmes have incorporated in analyzing standing to

pursue federal antitrust and RICO claims. Holmes, 503 U.S.

at 267-70; AGC, 459 U.S. at 529-35. In addition to relying

on the rule that one who pays the medical expenses of

another may not recover in a direct suit against the tortfeasor

but must proceed by way of subrogation, cf. Indus. Risk

Insurers v. Creole Prod. Servs., Inc., 746 F.2d 526, 528 (9th

Cir. 1984); Rock Island Bank v. Aetna Cas. & Sur. Co., 692

F.2d 1100, 1106-07 (7th Cir. 1982); Great Am. Ins. Co. v.

United States, 575 F.2d 1031, 1033-34 (2d Cir. 1978), the

defendants rely on the decisions of the circuit courts of appeal

that have rejected such third-party payor suits against the

tobacco industry. The funds, in turn, appeal the dismissal of

all of their other claims save for their special duty and

indemnity claims.

B.

The Republics of Guatemala, Nicaragua, and Ukraine ("the

nations") seek to distinguish their claims from those of the

typical third-party payor whose fate is sealed by the decisions

of other circuits. They contend that as sovereign nations

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constitutionally (or otherwise legally) obligated to provide

free health care and other forms of social welfare to their

residents, or at least to those who cannot afford to pay for

such benefits, they have suffered economic harms to their

treasuries that are independent of any harms allegedly suffered by their residents as a result of smoking defendants'

products. The nations maintain that they are not only the

best but the only plaintiffs who can recover for the economic

harm allegedly suffered by their public fiscs. Further, they

claim a purported right to sue in parens patriae that they

view as overcoming concerns about their standing to recover

their economic losses under RICO and the federal antitrust

laws.

The district court dismissed the complaints in their entirety. Guatemala, 83 F. Supp. 2d at 128.1 Without adopting

the defendants' position that the nations are merely complaining of a purely derivative harm, and acknowledging that the

doctrine of remoteness affords courts flexibility in determining whether the alleged injury is remote from the alleged

misconduct, the district court considered it "abundantly clear

that the injury that [the nations] purportedly suffered occurred only as a consequence of the harm to individual

smokers." Id. at 129. The district court concluded that the

"tortured path" from the defendants' alleged wrongdoing to

the nations' increased expenditures "demonstrates that [the

nations'] claims are precisely the type of indirect claims that

the proximate cause requirement is intended to weed out."

Id. at 130 (quoting Steamfitters Local Union No. 420 Welfare

Fund v. Philip Morris Inc., 171 F.3d 912, 930 (3d Cir. 1999)

("Steamfitters")).

In seeking reversal, the nations contend that the district

court misapplied the Holmes factors, ignored the foreseeable

nature of the harms alleged as well as public policy considerations in conducting its proximate cause analysis, failed to

address the alternate chain of causation alleged by the nations, and failed to acknowledge the nations' unique status as

__________

1 By unpublished order, the district court dismissed the complaints of Nicaragua and the Ukraine for the reasons in Guatemala.

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foreign sovereigns. Essentially, the nations urge this court

to adopt the district court's proximate cause analysis in

Service Employees and to give special weight to their right to

sue as parens patriae. They also contend that the district

court erred in not allowing them to replead their fraud and

RICO claims. See Guatemala, 83 F. Supp. 2d at 135 n.8.

II.

Our review of the district courts' partial denial and grant of

the defendants' motions to dismiss the complaints under

Federal Rule of Civil Procedure 12(b)(6) is de novo. See

Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276

(D.C. Cir. 1994). Because the relevant legal analysis appears

in several comprehensive decisions of other circuit courts of

appeal, our analysis is brief.

To date, seven circuit courts of appeal have rejected claims

similar to those brought by the funds and the nations by

generally concluding that the alleged injuries are too remote

and, therefore, are not redressable for lack of proximate

cause.2 In Service Employees, the funds seek to distinguish

these cases principally on the ground that the circuits have

engaged in an overly mechanical analysis of proximate cause

and ignored congressional intent and important public policies

__________

2 Lyons v. Philip Morris Inc., 225 F.3d 909 (8th Cir. 2000);

United Food and Commercial Workers Unions, Employers Health

and Welfare Fund v. Philip Morris Inc., 223 F.3d 1271 (11th Cir.

2000); Tex. Carpenters Health Benefit Fund v. Philip Morris Inc.,

199 F.3d 788 (5th Cir. 2000); Int'l Bhd. of Teamsters, Local 734

Health and Welfare Trust Fund v. Philip Morris Inc., 196 F.3d 818

(7th Cir. 1999) ("Teamsters"); Laborers Local 17 Health and Benefit

Fund v. Philip Morris Inc., 191 F.3d 229 (2d Cir. 1999) ("Laborers

Local"); Oregon Laborers-Employers Health & Welfare Trust

Fund v. Philip Morris Inc., 185 F.3d 957 (9th Cir. 1999) ("Oregon

Laborers"); Steamfitters, Local Union No. 420 Welfare Fund v.

Philip Morris Inc., 171 F.3d 912 (3d Cir. 1999) ("Steamfitters"); see

also Ass'n of Wash. Public Hosp. Dists. v. Philip Morris Inc., 241

F.3d 696 (9th Cir. 2001) ("Wash. Pub. Hosp."); Allegheny Gen.

Hosp. v. Philip Morris Inc., 228 F.3d 429 (3d Cir. 2000) ("Allegheny").

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underlying RICO. Pointing to RICO's history and purpose,

see Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 519-20

(1985) (Marshall, J., dissenting), the funds maintain that

Congress intended to afford a remedy where, as here, in the

funds' words, "people, with common law claims, ... were not

able to adequately oppose an industry of companies conspiring together to commit misconduct more akin to the racketeering of organized crime than to garden-variety product

liability torts and isolated instances of fraud or deceit."

Health care payors, by contrast, "were the type of business

entities that suffered ... economic injuries, and that had the

size and power to mount credible attacks as private attorneys

general to assist governmental law enforcement efforts."

Therefore, Holmes, AGC, Illinois Brick Co. v. Illinois, 431

U.S. 720 (1977), and similar cases are distinguishable and

properly understood as the Supreme Court's effort to choose

among multiple possible plaintiffs that have suffered economic

injury and to select only the most efficient and directly

injured plaintiff. Furthermore, the funds contend that a

proper analysis of the Holmes factors demonstrates that they

have standing to pursue their RICO claims against the tobacco industry. In a somewhat similar vein, the nations contend

that the district court's conclusion in Guatemala failed to

recognize the unique status of the nations as foreign sovereigns seeking to protect their governments' treasuries

through parens patriae actions.

The funds and the nations err in assuming that the proximate cause analysis called for by AGC and Holmes is a quest

for the "best" (or, realistically, "least bad") plaintiff. Rather,

the Supreme Court has insisted on an appropriate plaintiff,

namely, a plaintiff whose alleged injury possesses a sufficiently direct causal relationship to the alleged wrongdoing. See

AGC, 459 U.S. at 533-35; see also Holmes, 503 U.S. at 268-

70. The problem for the plaintiffs arises from long-standing

common law principles which the Supreme Court has incorporated into the proximate cause requirement for purposes of

determining standing to bring RICO and federal antitrust

claims.

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By relying on the analysis of RICO's legislative history set

forth in Justice Marshall's dissenting opinion in Sedima, 473

U.S. at 512-13, an approach rejected by the Court's majority,

id. at 497 n.15, the funds seek to show that in enacting RICO

Congress intended to adopt an analysis of the proximate

causation requirement different from that identified by the

Supreme Court in Holmes, 503 U.S. at 267-70. There may

be some tension between the Holmes (RICO) factors, which

might be read simply to assert a single-factor direct-injury

test that is merely supported by several policy factors. See

Holmes, 503 U.S. at 269, and the AGC (antitrust) approach,

which balances the directness concerns along with other

factors. See AGC, 459 U.S. at 537-45. This is not a pressing

issue here, however, because it is not outcome determinative

inasmuch as the funds and the nations lose under a pure

directness test and under a balancing of the Holmes factors.

The nations' assertion that they may proceed in parens

patriae is a dubious assertion at best, for as the First Circuit

pointed out in Estados Unidos Mexicanos v. DeCoster, 229

F.3d 332, 336 (1st Cir. 2000), parens patriae standing should

not be recognized in a foreign nation (by contrast with a State

in this country) unless there is a clear indication by the

Supreme Court or one of the two coordinate branches of

government to grant such standing. The nations offer no

evidence of such intent. In any event, they fail to show that

such status eliminates or adequately substitutes for proximate

cause. Rather, the doctrine of parens patriae is merely a

species of prudential standing, see Md. People's Counsel v.

FERC, 760 F.2d 318, 321-22 (D.C. Cir. 1985), and does not

create a boundless opportunity for governments to seek recovery for alleged wrongs against them or their residents.

See, e.g., Pfizer, Inc. v. Lord, 552 F.2d 612, 616 (8th Cir. 1975).

Even were the court to view as oversimplified the defendants' reliance on the settled rule barring direct suits by third

parties seeking to recover the costs of medical care paid on

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sor's conduct,3 application of the Holmes factors,4 503 U.S. at

269-70, reveals that both the funds and the nations fail to

demonstrate proximate cause. With respect to the first

Holmes factor, the circuits have generally concluded that

damages for such claims are highly speculative and difficult to

calculate given the many other potential causes for the alleged financial injuries. See Wash. Pub. Hosp., 241 F.3d at

703; Allegheny, 228 F.3d at 441-42;5 Laborers Local, 191

F.3d at 239-40; Oregon Laborers, 185 F.3d at 964-65; Steamfitters, 171 F.3d at 928-29; cf. Teamsters, 196 F.3d at 823-

24. Regarding the second Holmes factor, the circuits have

concluded that allowing such claims to proceed would create a

risk of multiple recoveries and necessitate complicated rules

for apportioning damages between groups of plaintiffs removed at various levels from the tobacco industry's alleged

wrongdoing. See Wash. Pub. Hosp., 241 F.3d at 703; Teamsters, 196 F.3d at 823; Laborers Local, 191 F.3d at 240-41;

__________

3 Cf. Indus. Risk Insurers, 746 F.2d at 528; Rock Island Bank,

692 F.2d at 1106-07; Great Am. Ins. Co., 575 F.2d at 1033-34.

4 In explaining that the common law required "some direct

relation between the injury asserted and the injurious conduct

alleged," Holmes, 503 U.S. at 268, the Supreme Court characterized

its decision in AGC as identifying three relevant considerations: (1)

the need for sufficiently direct factual causation in order to be able

"to ascertain the amount of a plaintiff's damages attributable to the

violation, as distinct from other, independent, factors"; (2) the

avoidance of "complicated rules apportioning damages among plaintiffs removed at different levels of injury from the violative acts [so

as] to obviate the risk of multiple recoveries"; and (3) the assurance

that "directly injured victims can generally be counted on to vindicate the law as private attorneys general, without any of the

problems attendant upon suits by plaintiffs injured more remotely."

Id. at 269-70 ("the Holmes factors").

5 The decisions of the Third and Ninth Circuits in Allegheny

and Washington Public Hospital are instructive with respect to the

nations' claims because, like the nations, the plaintiffs in both cases

were legally obligated to directly provide health care to smokers

who could not afford to pay for such services. See Wash. Pub.

Hosp., 241 F.3d at 700; Allegheny, 228 F.3d at 436, 443.

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Oregon Laborers, 185 F.3d at 965-66; cf. Allegheny, 228 F.3d

at 442; Steamfitters, 171 F.3d at 933. The third Holmes the

factor, the circuits have generally concluded, cannot outweigh

important policies underlying the first two Holmes factors,

see Steamfitters, 171 F.3d at 933-34; see also Oregon Laborers, 185 F.3d at 964, and furthermore, individual smokers may

be counted on to vindicate the public interests at stake in the

third factor by asserting various theories of recovery against

the tobacco industry. See Wash. Pub. Hosp., 241 F.3d at 703;

Teamsters, 196 F.3d at 823; Laborers Local, 191 F.3d at 241;

Oregon Laborers, 185 F.3d at 964. In addition, the circuits

have rejected the contention that specific intent is sufficient

to demonstrate proximate cause, see Allegheny, 228 F.3d at

439; Laborers Local, 191 F.3d at 241-42; Steamfitters, 171

F.3d at 925, or that the foreseeable nature of the harms

alleged is sufficient to satisfy the proximate cause requirement. See Steamfitters, 171 F.3d at 926. Furthermore, the

Ninth and Third Circuits have rejected efforts to distinguish

between third-party health care payors like the funds and

direct health care providers like the nations with respect to

the derivative nature of the harms alleged. See Wash. Pub.

Hosp., 241 F.3d at 702-03; Allegheny, 228 F.3d at 440-41.

We likewise hold that the harms alleged by the funds and

the nations are too remote from the defendants' alleged

wrongdoing to provide antitrust or RICO standing. Neither

the funds nor the nations have shown that their claimed

economic harms were not caused by other independent factors or that difficult problems of duplicative recoveries or

allocation of damages could be avoided were they allowed to

proceed. Indeed, as the defendants suggest, the alleged

harm arising from payment of medical expenses by the funds

and the nations is itself derivative of alleged injuries to

individual smokers, and the alleged "infrastructure" harms

are even more remote than the damages for medical payments because the potential for "infrastructure" harm does

not exist until an actuarially significant number of medical

payments on behalf of smokers has been made. See Laborers

Local, 191 F.3d at 239; Oregon Laborers, 185 F.3d at 963;

Steamfitters, 171 F.3d at 927-28; cf. Teamsters, 196 F.3d at

823-24. Moreover, as the Seventh Circuit tellingly observed

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nancial harm flowing from the tobacco industry's alleged

wrongdoing because they possess information that would have

indicated a need to collect higher premiums from smokers.

See Teamsters, 196 F.3d at 823-24, 826.

The remote, derivative nature of the alleged injuries, in

turn, makes more difficult the determination of the amount of

damages that is attributable to the alleged wrongdoing, as

distinct from other independent factors. As the circuits have

pointed out, considerable speculation would be involved in

identifying the costs that have caused the alleged financial

instability of the funds and similar costs to the nations'

treasuries that the plaintiffs contend have deterred or prevented them from financing various health care programs.

See Wash. Pub. Hosp., 241 F.3d at 703; Allegheny, 228 F.3d

at 441-42; Laborers Local, 191 F.3d at 239-40; Oregon

Laborers, 185 F.3d at 964-65; Steamfitters, 171 F.3d at 928-

30. For example, it is difficult to know how smokers might

have behaved with more complete information, see Laborers

Local, 191 F.3d at 239-40; Steamfitters, 171 F.3d at 929, a

problem compounded by the fact that the tobacco companies

would be stripped of many defenses that would be available in

a subrogation action. See Teamsters, 196 F.3d at 823. Reliance on aggregate statistical proof, as the district court in

Service Employees accepted (without prejudice to later attack

by defendants, see 83 F. Supp. 2d at 88), and as the nations

propose, compounds the difficulties and does not alter the

speculative nature of the claimed damages. See Allegheny,

228 F.3d at 441-42; Oregon Laborers, 185 F.3d at 964-65;

Steamfitters, 171 F.3d at 928-29; cf. Teamsters, 196 F.3d at

823. Moreover, the insurers have likely already passed the

costs on to the directly injured through higher premiums.

See Teamsters, 196 F.3d at 824.

Allowing the funds and the nations to proceed would also

require complex rules for apportioning damages between

potential plaintiffs removed from the alleged wrongdoing by

different levels of injury, as well as create a very real

possibility of duplicative recoveries against the defendants.

The need for complex rules apportioning damages arises

because other indirectly injured parties might also sue. As a

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result, courts would be required to allocate damages among

various classes of directly and indirectly injured parties who

are removed from the alleged torts by varying degrees and

would be required to do so in a manner that protects the

tobacco industry from being held repeatedly liable for the

same alleged wrongdoing. See Holmes, 503 U.S. at 273;

AGC, 459 U.S. at 543-45; Laborers Local, 191 F.3d at 240-41;

Oregon Laborers, 185 F.3d at 965-66; cf. Teamsters, 196 F.3d

at 823-24. See generally Ill. Brick, 431 U.S. at 737-38.

The nations contend that because they are not private

insurers they cannot bring a subrogation action. Further,

because they have assumed the responsibility of compensating the directly injured, they suggest that if they cannot

recover in this action for the alleged harms, no one can.

Assuming the premise to be correct (and the nations' submissions are far from clear on the matter), the argument mistakenly assumes that it was Congress' intent that there must be

recoveries, regardless of the burdens inflicted on the legal

system and the significant policies captured in the first two

Holmes factors. See supra p. 10 n.4. It seems especially

implausible that Congress would have wished to saddle the

United States judicial system with such burdens simply to

accommodate the legal idiosyncrasies of foreign nations. To

the extent that such idiosyncrasies stand between the nations'

smokers and recoveries in United States courts, the nations

may wish to consider amendment of their domestic law.

Relatedly, because individual smokers may seek recoveries

for the same alleged conduct under state law theories and

because employers, other health insurers, and other similar

potential plaintiffs might also pursue similar antitrust and

RICO claims against the tobacco industry, double recovery

could occur. See Wash. Pub. Hosp., 241 F.3d at 703; Teamsters, 196 F.3d at 823; Laborers Local, 191 F.3d at 240-41;

Oregon Laborers, 185 F.3d at 966; cf. Allegheny, 228 F.3d at

442. The district court's contrary view in Service Employees,

83 F. Supp. 2d at 87-88, fails to take into account the

collateral source rule, see District of Columbia v. Jackson,

451 A.2d 867, 873 (D.C. 1982), and the limits of the single

satisfaction rule, see Lamphier v. Wash. Hosp. Ctr., 524 A.2d

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729, 734 (D.C. 1987), which would not prevent multiple plaintiffs from obtaining duplicative recoveries from a single defendant for a single tort. See Guatemala, 83 F. Supp. 2d at

131 n.3; cf. Laborers Local, 191 F.3d at 241.

Virtually the same kinds of problems exist with respect to

the nations' claims. See Wash. Pub. Hosp., 241 F.3d at 703;

cf. Allegheny, 228 F.3d at 442; Pfizer v. Lord, 522 F.2d at

619-20.

By its very nature, the common law proximate cause requirement adopted by the Supreme Court in Holmes and

AGC leaves open the possibility that "[s]ome injuries caused

by an antitrust [or RICO] violation may thus be left unremedied for lack of a proper plaintiff." Oregon Laborers, 185

F.3d at 964. See generally Ill. Brick, 431 U.S. at 745-47.

The third Holmes factor, therefore, must be considered in the

context of the proximate cause analysis as a whole rather

than as a free-standing, independent ground for finding proximate causation. Were satisfaction of the third Holmes factor

necessary, the proximate cause analysis would be transformed into a process for identifying the "best" plaintiff to

assert certain antitrust or RICO claims, in contravention of

AGC, 459 U.S. at 534-35. Cf. Oregon Laborers, 185 F.3d at

964. Like other circuits, we conclude that individual smokers

constitute a group of potential plaintiffs possessed of more

direct claims who can be counted on to deter the alleged

wrongdoing by asserting state law theories of recovery or

perhaps even RICO and federal antitrust claims to the extent

they can prove a measure of damages distinct from personal

injuries. See Wash. Pub. Hosp., 241 F.3d at 703; Teamsters,

196 F.3d at 823; Laborers Local, 191 F.3d at 241; Oregon

Laborers, 185 F.3d at 964; Steamfitters, 171 F.3d at 933; see

also Fed. Trade Comm'n v. Ind. Fed'n of Dentists, 476 U.S.

447, 461-62 (1986); Reiter v. Sonotone Corp., 442 U.S. 330,

339 (1979).

The funds' and the nations' reliance on the purportedly

foreseeable nature of their injuries and the allegedly intentional nature of defendants' wrongdoing is misplaced.

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tinct concepts, both of which must generally be established by

a plaintiff." Laborers Local, 191 F.3d at 236; see also

Steamfitters, 171 F.3d at 926. Defendants suggest that substitution of the former for the latter would enable circumvention of the settled rule that one who pays the medical

expenses of another may not recover those expenses in a

direct suit against the tortfeasor but must proceed by way of

subrogation. In any event, specific intent to harm the plaintiffs by shifting smoking-related health care costs to them is

alone insufficient to overcome the bar on remote claims. See

AGC, 459 U.S. at 537 & n.37; Blue Shield of Va. v.

McCready, 457 U.S. 465, 478-79 (1982); Laborers Local, 191

F.3d at 241-42; Steamfitters, 171 F.3d at 925.

Accordingly, because the funds' and the nations' claims are

"too remote, contingent, derivative, and indirect to survive,"

Guatemala, 83 F. Supp. 2d at 130,6 we reverse the denial of

the motion to dismiss the RICO and fraud claims in Service

Employees, and we otherwise affirm the dismissals of the

complaints in Service Employees and Guatemala.

__________

6 The failure of the funds and the nations to demonstrate

proximate cause under Holmes with respect to their RICO and

federal antitrust claims also means that their antitrust and common

law claims under District of Columbia law fail for lack of proximate

cause. See McKethean v. Wash. Metro. Area Transit Auth., 588

A.2d 708, 716 (D.C. 1991); Lacy v. District of Columbia, 424 A.2d

317, 321 (D.C. 1980); see also Wash. Pub. Hosp., 241 F.3d at 706-

07; Allegheny, 228 F.3d at 445-46; Teamsters, 196 F.3d at 827-28;

Laborers Local, 191 F.3d at 242-43; Oregon Laborers, 185 F.3d at

968-69; Steamfitters, 171 F.3d at 934-37.

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