Opinion ID: 748603
Heading Depth: 5
Heading Rank: 2

Heading: Legitimate Employment Opportunity

Text: 35 Regarding Khurana's claimed loss of legitimate business opportunity, we begin our consideration by noting that RICO civil standing is not limited to only the immediate victim of a defendant's RICO violation. See Zervas v. Faulkner, 861 F.2d 823, 823, 833 (5th Cir.1988) (A requirement that the nexus between the injury and a predicate act be 'direct' may ... be overly restrictive.); Mid Atl. Telecom, Inc. v. Long Distance Servs., Inc., 18 F.3d 260, 263 (4th Cir.1994) (rejecting adoption of a rule that only injuries suffered by the immediate victim of a predicate act satisfy the by reason of requirement of § 1964(c)). In Mid Atlantic, a plaintiff telephone company accused one of its competitors of violating RICO by defrauding its customers with fictitious charges, enabling it to charge lower rates to entice new subscribers. The plaintiff company alleged that it lost revenues from subscribers who were defrauded into accepting the fraudulent lower rates of the defendant company. The Fourth Circuit rejected the argument that the plaintiff company lacked standing because the customers were the directly injured parties and only they were proximately injured by its alleged misconduct. Similarly, Khurana may not have been the intended target of the fraud scheme, but like the telephone company in Mid Atlantic, he pleaded the loss of a legitimate business opportunity resulting from the defendants' alleged racketeering acts. Holmes did not preclude a RICO claim for indirect injuries, but rather instructed the federal courts to employ common law proximate causation principles. See Israel Travel, 61 F.3d at 1257. Some indirect RICO injuries, such as this one, satisfy the proximate causation requirements of common law. Id. In fact, we have previously rejected a direct versus indirect injury test as the dispositive standing inquiry for civil RICO claims. See Ocean Energy II, Inc. v. Alexander & Alexander, Inc., 868 F.2d 740, 746 (5th Cir.1989); see also Reynolds v. East Dyer Dev. Co., 882 F.2d 1249 (7th Cir.1989) (avoiding using direct versus indirect terminology to make standing determinations and instead focusing on causation); Prosser & Keeton on Torts § 42, p. 273-74 (discussing direct versus indirect as only one of several theories of proximate causation). 36 In Mid Atlantic, the Fourth Circuit noted that the plaintiff was not seeking to vindicate the claims of its competitor's customers but rather its own alleged distinct and independent injuries of lost customers and lost revenues. Id. at 264. We agree with the Fourth Circuit that distinct and independent injuries are in keeping with the Supreme Court's understanding of proximate cause in Holmes. Khurana pleads his own injury of loss of legitimate employment opportunity. In Holmes, an intervening event, the insolvency of the securities brokership, broke the causal link between the plaintiff's injury and the defendant's conduct, 503 U.S. at 262, 264, 112 S.Ct. at 1314-16 so that the plaintiff was a secondary victim. Id. at 273, 112 S.Ct. at 1320. In contrast, the plaintiff in this case seeks to recover for losses substantially attributable to the defendants' conduct. 37 Finally, as explained before, the fact that Khurana pleaded reliance on the defendants' racketeering acts as a cause of this injury indicates a valid claim that the racketeering acts proximately caused him to forego other legitimate business opportunities. See Chisolm, 95 F.3d at 337; Standardbred, 985 F.2d 102. Khurana claims that he was fraudulently induced to take his position with the hospital and argues that such proximately caused him to lose other legitimate business opportunities. As Khurana's loss of other employment opportunities was foreseeable by the defendants and could certainly be anticipated as a natural consequence of their alleged misrepresentations, Khurana has sufficiently pleaded that the alleged substantive violations of § 1962(b) and § 1962(c) proximately caused his business opportunity loss. See Chisolm, 95 F.3d at 337 (relying on plaintiff's detrimental reliance on defendants' material misrepresentations to find proximate cause and noting that [i]n order for the scheme to succeed, the appellants needed to be convinced that the 'private sales' referenced in the TransSouth notices were legitimate.... concealment of the nature of the 'private sales' was the very linchpin of the scheme.); cf. Shearin v. E.F. Hutton Group, Inc., 885 F.2d 1162, 1170 (3d Cir.1989) (affirming the dismissal of a RICO claim based on a loss of the plaintiff's former job where there was no allegation that the employer reneged or the plaintiff was duped out of her old job).