Opinion ID: 765860
Heading Depth: 3
Heading Rank: 2

Heading: The difference between the causation concepts at common law and in statutory cases.

Text: 57 It should not be forgotten, however, that the pertinent requirements of proximate cause in a RICO case are those intended by the legislature that passed the statute, and not those of the common law. See Abrahams, 79 F.3d at 237-38 n.3. Whether a statute's causation requirements are broader, narrower, or the same as those of the common law depends on what harms the statute is intended to address. 7 See id. at 238 n.3. 58 The inquiry into RICO's statutory purpose happens to lead back, at least in part, to the common law of proximate cause. Based on an analysis of the statute's history, the Supreme Court has held that the language of 18 U.S.C. §1964(c) reflects a congressional intent to require plaintiffs in civil actions under RICO to demonstrate not only but-for causation but also proximate causation as that concept is understood at common law. See Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 267-68 (1992). But a RICO plaintiff's burden to show that his case meets the common-law requirement of proximate causation derives from the legislature's intent to impose that causation requirement, and not directly from the common law itself. 8 59 The precise question in Holmes was whether but for causation was sufficient to establish liability under the RICO statute, as would have been the case if Congress had so intended. The court answered that question in the negative, declaring that the statute also required a showing of proximate causation as understood at common law. See id. But this holding does not mean that RICO is satisfied by a showing of common-law proximate cause. RICO is a statute aimed at remedying a particular class of harms, and suits under RICO are cognizable only if they fit within its remedial scheme. Accordingly, Holmes's conclusion that a RICO plaintiff must demonstrate proximate cause as that concept is understood at common law states a necessary but not sufficient condition for meeting the causation requirement under RICO. 60 In practice, our cases have held RICO plaintiffs to a more stringent showing of proximate cause than would be required at common law. Thus, at common law, the element of foreseeability is generally satisfied by a showing that the plaintiff was in a foreseeable category of persons who might be harmed. See Palsgraf v. Long Island R.R., 248 N.Y. 339, 345, 162 N.E. 99, 101 (1928). And this is so in some common law cases even when the type of harm may be unforeseeable. 9 See In re Polemis and Furness, Withy & Co., 3 K.B. 560 (C.A. 1921). But RICO cases, in order to combat the specific mischiefs that the RICO statute was designed to address, seem to require that the kind of harm the victim suffered be foreseeable as well. See Hecht v. Commerce Clearing House, Inc. 897 F.2d 21, 23-24 (2d Cir. 1990). Similarly, it is usually easier for intervenors to break the chain of causation in RICO than it is at common law. Compare Brandenburg v. Seidel, 859 F.2d 1179, 1190 (4th Cir. 1988) (holding that intervening causes that are not predicate acts under RICO break the chain of causation), with Stagl v. Delta Airlines, 52 F.3d 463 (2d Cir. 1995) (holding, in a suit at common law, that an airline that failed to maintain adequate crowd-control measures at an airport baggage carousel proximately caused injuries to an elderly passenger who was badly hurt when another passenger swung a suitcase into a second suitcase which, in turn, fell off the carousel and landed on the plaintiff). 61 This is in no way surprising, and indeed it is the normal case when suits are based on statutes. 10 See Gorris v. Scott, 9 L.R.-Ex. 125 (1874). As has often been noted, the requirement of proximate causation is one of policy. See, e.g., Sperber v. Boesky, 849 F.2d 60, 63 (2d Cir. 1988). Proximate cause determines when a loss should fall on an innocent plaintiff rather than on a defendant who has, by hypothesis, done something for which he is prima facie accountable. Where the defendant's behavior is made actionable by a statute, it must of course be the statute that defines the extent of his liability. 11 That the statute may do so, and frequently does do so, by borrowing in part from the common law should not mislead us: it remains the statute and its purpose that governs. 12 62 In the case before us, as the opinion of the court demonstrates, all the causation elements that the statute imposes -- both with respect to transaction and loss causation -- are sufficiently alleged in the plaintiffs' complaint. Accordingly, the district court erred in dismissing their suit on a 12(b)(6) motion. Notes: 1 Examples of such situations include those described in Corey v. Havener, 182 Mass. 250, 251-52, 65 N.E. 69, 69 (1902), Summers v. Tice, 33 Cal.2d 80, 82-83, 87-88, 199 P.2d 1, 1- 5 (1948); Hymowitz v. Eli Lily, 73 N.Y.2d 487, 502-04, 507-08, 541 N.Y.S.2d 941, 944-45, 947-48, 539 N.E.2d 1069, 1072-73, 1075 (1989), and Zuchowitz v. United States, 140 F.3d 381, 383-91 (2d Cir. 1998). 2 Similarly, it is more than likely that transaction causation requires a showing of causal link or tendency (defined and discussed infra). 3 Although proof that a defendant caused an accident is generally sufficient in negligence cases to show that the defendant also caused the injuries that flowed from the accident, proving cause with respect to the accident does not in any way demonstrate that there were any injuries -- any damages -- at all. Cf. Majority Opinion at 12 n.8 (making an analogous point as to the difference between a showing of loss causation and a showing of damages). 4 Again, I do not consider the possible relevance of the traditional common-law exceptions to liability based on but-for causation. 5 Some commentators describe the lack of causal link cases as involving coincidence rather than cause. See Richard A. Epstein, Torts 260-61 (1999). The concept is the same, however. 6 While it is sometimes said that foreseeability is relevant to wrongdoing, but aftseeability is what is relevant to cause, see Dellwo v. Pearson, 259 Minn. 452, 455, 107 N.W.2d 859, 861 (1962), that statement is not fully accurate. Thus, at least since Palsgraf v. Long Island R.R., 248 N.Y. 339, 162 N.E. 99 (1928), foreseeability of category of plaintiff is generally required for common-law proximate cause. And if foreseeability of extent of damages is not generally needed, compare Overseas Tankship (UK) Ltd. v. Morts Dock & Eng'g Co. (The Wagon Mound #1)) [1961] App.Cas. 388 (P.C.) (appeal taken from Austl.) (requiring foreseeability of the extent of damages), with In re Kinsman Transit Co., 338 F.2d 708, 723-25 (2d Cir. 1964) (Friendly, J.) (noting that the reasoning of Wagon Mound #1 is not the rule in American law), analogous results are sometimes achieved in extreme cases through the use of other doctrines like assumption of risk, see Fleming James, Jr., Assumption of Risk: Unhappy Reincarnation, 78 Yale L.J. 185, 187-88 (1968) (describing assumption of risk as simply a confusing way of stating certain no-duty rules). More important, juries are not infrequently permitted to find, and courts will occasionally rule, that proximate cause does not exist where a causal link exists between the defendant's act and the injury, but where it was a weak one and only became known after the defendant acted. Thus, if we one day learn that driving cars at excessive speeds increases the chances that nearby rotten trees will fall across the highway, harm like that in the Berry case would, in fact, be causally linked to a defendant's speeding. But this does not mean that the foreseeability element of proximate cause would have been present when defendants sped. But cf. In re Polemis and Furness, Withy & Co., 3 K.B. 560 (C.A. 1921) (finding proximate cause in an analogous situation). 7 A classic case in this context is Gorris v. Scott, 9 L.R.-Ex. 125 (1874). Gorris held that a statute requiring sheep on ships to be kept in pens could not be the basis for recovering damages suffered when sheep not kept in pens were swept overboard in a storm, even though the sheep would not have been lost had they been kept in pens. Recovery was barred because the clear purpose of the statute was only to prevent disease, and not to keep sheep from being lost at sea. 8 We have said elsewhere that proximate cause is a common law concept [that] exists independently of the [RICO] statute. First Nationwide Bank, 27 F.3d at 769. But that statement should not be read to mean that proximate cause is a brooding omnipresence the application of which cannot be altered by a legislature. As the Supreme Court explained in Holmes, Congress chose to make common-law proximate causation, which has an existence outside of RICO, into a requirement of a civil RICO suit. See Holmes, 503 U.S. at 267-68. The shape of proximate causation in RICO cases is independent of the statute, then, only to the extent that the enacting legislature chose to treat it as exogenous. 9 Of course, there are also common law cases that support the proposition that foreseeability of the type of harm is, at times, necessary to establish liability. See, e.g., Kinderavich, 127 Conn. 85, 15 A.2d 83. 10 See, e.g., Townes v. City of New York, 176 F.3d 138, 146 (2d Cir. 1999) (holding, in a suit brought pursuant to 42 U.S.C. § 1983, that an illegal search yielding evidence used to convict a criminal defendant was not the proximate cause of the defendant's subsequent conviction and incarceration, because the trial court's refusal to suppress the evidence was an intervening and superseding cause of those events). 11 The same is true for the requirement of but-for cause and for its exceptions. Thus, a statute on which a liability suit is based might -- if the legislature so intended -- permit statistical cause to replace traditional but-for cause even in situations in which the common law adheres to the traditional rule. Conversely, the legislature might mandate that, for statutory liability to lie, traditional but-for cause must be shown even in circumstances where many common-law courts permit statistical cause to meet the requirement. See Hymowitz, 73 N.Y.2d at 507-08, 541 N.Y.S.2d at 947-48, 539 N.E.2d at 1075 (collecting authorities). The seemingly invariant requirement of causal link may itself be abrogated if the legislature so intends. This is a possible reading of Kernan v. American Dredging Co., 355 U.S. 426 (1958), which held a shipowner liable, under the Federal Employers' Liability Act, for an explosion created when a kerosene lamp on the ship ignited petroleum fumes from the water. See id. at 427-28. The lamp had been only three feet above the water, and this violated a Coast Guard regulation stating that such lamps had to be at least eight feet high so that they would be visible to other ships. See id. The Court held that the shipowner was liable for the explosion even though the rule it had violated had nothing to do with preventing explosions, but rather was concerned with navigation safety. See id. at 437-39. 12 As a result, we should be especially wary of applying statutory precedents involving proximate cause to common-law cases and vice-versa. Consider, for example, the mischief that would result if a court were to apply the result in Gorris in a case alleging a common law tort by shipowners who had not taken adequate precautions for the safety of their passengers or their cabbages, or alternatively applying Polemis in a RICO situation.