Opinion ID: 770626
Heading Depth: 5
Heading Rank: 4

Heading: Factor 4: Directness/Indirectness of the Injury

Text: 56 The directness or indirectness of the injury involves two inquiries: (1) the appropriate party, and (2) remoteness. See Steamfitters, 171 F.3d at 927. As to the appropriate party, Steamfitters stated: 57 [s]ubsumed in the directness factor is also the issue of whether other, more directly injured parties could vindicate the policies underlying the antitrust laws: The existence of an identifiable class of persons whose self-interest would normally motivate them to vindicate the public interest... diminishes the justification for allowing a more remote party such as the Union to perform the office of private attorney general. 58 Id. at 927 (quoting AGC, 459 U.S. at 542). The nonpaying patients in the present case, while more directly injured, may be unwilling to sue the Tobacco Companies for antitrust violations. Moreover, the direct injury theory covers some damages that only Hospitals could have sustained. 8 Thus, the District Court correctly determined that the Hospitals seem like the appropriate party. 59 However, following Steamfitters, the District Court found that the Hospitals' injuries were too remote and the chain of causation too attenuated to satisfy the directness of injury factor. It found that the injuries were indirect and derivative of nonpaying patients' smoking injuries, overshadowing the possibility that the Hospitals might be the appropriate party. 60 The Hospitals first argue that an intentional injury cannot be indirect. But, as discussed earlier, specific intent to harm does not magically create standing or cause alleged antitrust injuries to be direct. See AGC, 459 U.S. at 537. The Hospitals also argue that their injuries are independent and separate from injuries to nonpaying patients, and in support, list numerous examples. However, we rejected a nearly identical claim in Steamfitters, with language directly applicable to the present case: 61 [u]nder plaintiffs' direct theory, the tobacco companies' conduct aimed at the [Hospitals] induced the [Hospitals] to not take certain actions, which led to a greater incidence of smoking (and of smokers using more dangerous products), which led to more illness, which led to increased health care expenditures being borne by the plaintiffs. Although the alleged wrongdoing was more directly aimed at the [Hospitals], the injury itself certainly was no more direct than the indirect injury that arose from the defendant's actions toward smokers.... [P]laintiff's direct-injury claim is that the tobacco companies fraudulently induced the [Hospitals] to not spend money (on safer-smoking or smoking-cessation products) that, if spent, would have diminished a separate revenue stream (i.e., smokers' purchase of tobacco products) for the defendants. We view this as an indirect connection. 62 171 F.3d at 927-28. Of course, the Hospitals are different from the union funds in Steamfitters in that they provide free medical care, provide it directly, and have a duty to provide it. Yet only the direct provision of care is relevant to remoteness. Moreover, direct provision does not alter the fact that the Hospitals dealt solely with the nonpaying patients, and not with the Tobacco Companies. Cf. International Bhd. of Teamsters, Local 734 Health and Welfare Trust Fund, 196 F.3d at 827 (rejecting the direct payment argument). The Hospitals' injuries are still derivative of the nonpaying patients' injuries. As in Steamfitters, the Hospitals' injuries are too remotely connected in the causal chain from wrongdoing on the part of the Tobacco Companies; thus, the Hospitals' injuries do not satisfy the directness of injury factor. See Steamfitters, 171 F.3d at 927-28. 63