Opinion ID: 2995956
Heading Depth: 2
Heading Rank: 1

Heading: RICO and State Law Claims

Text: We begin once again with the Loeb action. Our determination that the AGC factors prevent the Scrap Dealers Nos. 00-3979, 01-1148, 01-3229, 01-3230, 01-3485 43 from pursuing their antitrust claims disposes of their remaining claims against Sumitomo and Global for violations of RICO and state law. It is also dispositive of all claims against JPMorgan Chase. The district court dismissed the Scrap Dealers’ RICO claims on the ground that the AGC factors apply equally to RICO. The Scrap Dealers, however, argue that even if their antitrust claim fails, their RICO case should proceed. This claim lacks merit. Civil RICO was modeled after the Clayton Act. Holmes v. Security Investor Protection Corp., 503 U.S. 258, 267-69 (1992). To satisfy its requirement of proximate causation, the Scrap Dealers must allege a relation between their injury and the defendants’ violation that is neither indirect nor remote. International Bhd. of Teamsters, Local 734 Health & Welfare Trust Fund v. Phillip Morris, Inc., 196 F.3d 818, 825 (7th Cir. 1999) (applying AGC factors to a proximate causation analysis). Since we have already determined that the Scrap Dealers’ injury is too indirect and remote under AGC for antitrust purposes, we conclude that the relation is similarly too remote for RICO purposes. The Scrap Dealers also assert that the district court erred in finding that they had abandoned their state law claims. On this point, they appear to be correct. There is certainly no evidence in the record that the Scrap Dealers voluntarily dismissed or failed to pursue their various state law claims. The defendants argue that these claims were abandoned when the Scrap Dealers attempted to certify a class for the federal antitrust claims but not for the state claims. But no inference of abandonment should flow from a limited request for a class action; to the contrary, FED. R. CIV. P. 23(c)(4)(A) specifically recognizes that “an action may be brought or maintained as a class action with respect to particular issues.” It would be entirely consistent with the rule to seek certification on issues governed by federal law, 44 Nos. 00-3979, 01-1148, 01-3229, 01-3230, 01-3485 while declining to do so for more particularized state law issues. Nevertheless, the fact remains that we have dismissed all of the Scrap Dealers’ federal claims against Sumitomo and Global. Since the Scrap Dealers have asserted no independent basis for federal subject matter jurisdiction, it is entirely appropriate to dismiss the state law claims, though without prejudice. See 28 U.S.C. § 1367(c)(3); Oates v. Discovery Zone, 116 F.3d 1161, 1173 n.12 (7th Cir. 1997).