Opinion ID: 6983274
Heading Depth: 2
Heading Rank: 2

Heading: RICO and Antitrust Claims for Equitable Relief

Text: In addition to damages, plaintiffs seek equitable relief under RICO and the antitrust laws.
Standing analysis for equitable relief under the antitrust laws is not the same as standing analysis for damages. See Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 110-11 & nn. 5-6, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986). As the Court explained in Cargill: [T]he fact is that one injunction' is as effective as 100, and, concomitantly, that 100 injunctions are no more effective than one. Thus, because standing [for damages] raises no threat of multiple lawsuits or duplicative recoveries, some of the factors other than antitrust injury that are appropriate to a determination of standing [for damages] are not relevant [to a determination of standing for equitable relief]. Id. at 111 n. 6, 107 S.Ct. 484 (citation and quotation omitted) (emphasis added). Thus, plaintiffs may not have to meet all three factors in the “remoteness” test to maintain an action for antitrust injunctive relief. Plaintiffs do, however, still have to show antitrust injury-either real or threatened. See id. at 111-13, 107 S.Ct. 484. This requirement “ensures that the harm claimed by the plaintiff corresponds to the rationale for finding a violation of the antitrust laws in the first place.” ARCO v. USA Petroleum Co., 495 U.S. 328, 342, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990). An “antitrust injury” is an injury of “the type that the antitrust statute was intended to forestall.” AGC, 459 U.S. at 540, 103 S.Ct. 897. “The antitrust laws ... were enacted for the protection of competition, not competitors.” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977) (quotation omitted). “The requirement that the alleged injury be related to anti-competitive behavior requires, as a corollary, that the injured party be a participant in the same market as the alleged malefactors.” Bhan v. NME Hosps., Inc., 772 F.2d 1467, 1470 (9th Cir.1985). “In other words, the party alleging the injury must be either a consumer of the alleged violator’s goods or services or a competitor of the alleged violator in the restrained market.” Eagle v. Star-Kist Foods, Inc., 812 F.2d 538, 540 (9th Cir.1987). In their complaint, plaintiffs define the antitrust market at issue as the market for cigarettes and tobacco products. Plaintiffs are neither consumers nor competitors in that market. They are not, therefore, “participants in the same market” as defendants, and they have thus not suffered “antitrust injury.” See Bhan, 772 F.2d at 1470; see also Steamfitters, 171 F.3d at 926. Plaintiffs’ reliance on McCready to argue that “there is no ‘consumer’ or market participant requirement,” is misplaced. The plaintiff in McCready filed an antitrust action against Blue Shield, claiming that Blue Shield’s “practice of refusing to reimburse subscribers for psychotherapy performed by psychologists, while providing reimbursement for comparable treatment by psychiatrists, was in furtherance of an unlawful conspiracy to restrain competition in the psychotherapy market.” 457 U.S. at 467, 102 S.Ct. 2540. The Court held that the plaintiff, as a subscriber who had employed the services of a psychologist and thus a consumer of psychotherapy services, had standing to maintain the antitrust action. See 457 U.S. at 480-81, 484-85, 102 S.Ct. 2540. The Court did not hold that there is no “consumer” or “market participant” requirement. The present case is distinguishable from McCready in several aspects. First, the plaintiff in McCready was a consumer in the relevant market of “psychotherapeutic services.” See 457 U.S. at 483, 102 S.Ct. 2540. In contrast, it is undisputed that plaintiffs in the present case are neither “consumers” nor “competitors” in the relevant market of cigarettes and tobacco products. Second, the Court has explained that the broad language it used in McCready 6 was simply a paraphrase of the antitrust laws and “added nothing to the even broader language that the statute itself contains.” See AGC, 459 U.S. at 529 & n. 19, 103 S.Ct. 897. In so explaining, the Court noted that the actual plaintiff in McCready was directly harmed by the defendants’ unlawful conduct. See id. In contrast, plaintiffs’ own argument in the present case reveals that they were not directly harmed by defendants’ allegedly unlawful conduct, but rather that any harm they suffered is derivative of the harm suffered by smokers. 7 As the Third Circuit stated: It is true that, drawing on the language from McCready, we have sometimes expressed the injury requirement in terms of the harm being “inextricably intertwined” with the defendant’s wrongdoing. The simple invocation of this phrase, however, will not allow a plaintiff to avoid the fundamental requirement for antitrust standing that he or she have suffered an injury of the type-almost exclusively suffered by consumers or competitors-that the antitrust laws were intended to prevent. Steamfitters, 171 F.3d at 926 n. 8 (citations omitted). Plaintiffs have failed to allege an injury of the type that the antitrust laws were intended to prevent. Plaintiffs are neither consumers nor competitors in the relevant market of cigarettes and tobacco products. To the extent they have suffered injury, their claims are entirely derivative of the injuries suffered by smokers. Their injuries are not of a nature to establish standing for equitable relief under the antitrust laws.
“[I]njunctive relief is not available to a private party in a civil RICO action.” Religious Tech. Ctr. v. Wollersheim, 796 F.2d 1076, 1084 (9th Cir.1986).