Opinion ID: 857137
Heading Depth: 3
Heading Rank: 1

Heading: RICO Causation

Text: The civil damages provision of RICO provides that [a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor . . . and shall 7 As noted, Pfizer argued to the jury and the district court that Neurontin was effective for off-label uses and that Pfizer therefore made no material misrepresentations. It does not make this argument on appeal. Instead, it argues on appeal only that Neurontin's effectiveness means Kaiser did not prove that it suffered economic injury from paying for off-label prescriptions of Neurontin. Pfizer does state on appeal, in passing, that Kaiser presented no evidence of fraudulent detailing (sales calls) to PMG doctors, but it does not squarely challenge the district court's contrary finding and, in any event, makes this argument only to attack the fit of Kaiser's expert testimony. -22- recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fee. 18 U.S.C. § 1964(c). In relevant part, section 1962 prohibits any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce from conduct[ing] or participat[ing], directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity. Id. § 1962(c). A racketeering activity can consist of a wide range of predicate offenses, including, as alleged in this case, mail and wire fraud, see id. § 1961(1), and a pattern of such activity requires at least two racketeering acts, id. § 1961(5). Our RICO causation analysis is controlled by the Supreme Court's decisions in Holmes v. Securities Investor Protection Corp., 503 U.S. 258 (1992), and its progeny.8 See Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (2006); Bridge v. Phoenix Bond & Indem. Co., 128 S. Ct. 2131 (2008); Hemi Grp., LLC v. City of New York, 130 S. Ct. 983 (2010). In Holmes, the Supreme Court held that the civil RICO provision's by reason of language contains both but-for causation and proximate causation requirements. 503 U.S. at 268. In our view, these are two quite distinct questions. Here, the harm to Kaiser plainly was foreseeable, and foreseeability is needed for, but does not end the inquiry as to, 8 The parties apply the same analysis on the proximate causation questions to both Kaiser's RICO claim and its UCL claim, so we proceed on the assumption that this approach is correct. -23- proximate causation. The proximate causation question in this appeal concerns whether the chain of events between Pfizer's misrepresentations and Kaiser's payment for the prescriptions is so attenuated that, for legal and policy reasons, Kaiser's claim for recovery should be denied. The but-for causation question, in contrast, is whether, absent Pfizer's fraud, Kaiser would have paid for fewer off-label Neurontin prescriptions. Pfizer's primary argument is that, as a matter of law, there is no proximate causation in this case because there are too many steps in the causal chain connecting its misrepresentations to the injury to Kaiser, particularly because that injury rests on the actions of independent actors -- the prescribing doctors. As to but-for causation, Pfizer argues that its evidence at trial falsified Kaiser's theories of causation, and that some of the evidence Kaiser presented to prove but-for causation was inadmissible. We take these arguments in sequence.