Opinion ID: 2758262
Heading Depth: 4
Heading Rank: 2

Heading: Standing and Proximate Causation

Text: By the same token, we reject Hutchens’s suggestion that plaintiffs lack standing to bring their RICO claims due to a failure to allege proximate causation. 14 Rightly understood, this is a surreptitious effort to challenge the merits of the class claims, which are not at issue at the class certification stage. Yes, sufficiently alleging proximate cause is necessary to establish standing under RICO, Bixler, 596 F.3d at 756, but accepting plaintiffs’ allegations as true, we are satisfied that plaintiffs have properly pleaded proximate cause to earn standing to vindicate the alleged wrongs. Gillmor v. Thomas, 490 F.3d 791, 797 & n.4 (10th Cir. 2007). By alleging that the putative class members were the “direct targets” of defendants’ fraudulent scheme (based on the alleged RICO predicate acts), plaintiffs have adequately established the requisite causal connection between defendants’ act and each class member’s financial loss. See Brokerage Concepts, 14 Meisels makes a version of this argument in his appeal, and we reject it for the same reason. -46- Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 521 (10th Cir. 1998); see also Trollinger v. Tyson Foods, Inc., 370 F.3d 602, 612 (6th Cir. 2004); Baisch v. Gallina, 346 F.3d 366, 373 (2d Cir. 2003); Mid Atl. Telecom, Inc. v. Long Distance Servs., Inc., 18 F.3d 260, 263–64 (4th Cir. 1994). As the natural, foreseeable, and, most importantly, intended victims of the alleged fraud, plaintiffs have sufficiently pleaded proximate causation to survive a threshold standing inquiry. In essence, Hutchens alleges that defendants will eventually win because the facts demonstrate the causal weaknesses in the class’s RICO claims. 15 That argument may be sound, but it invites an ultimate judgment about the defendants’ liability, not plaintiffs’ entitlement to bring legal action. In sum, saying nothing of the strength of their RICO cause of action, plaintiffs have a viable theory of causation that is adequate to confer standing under RICO at this stage in the litigation. 16 15 Many of the defendants, for example, point out plaintiffs’ concession that there may have been legitimate reasons for lenders to deny each class member’s loan application. According to defendants, this destroys proximate cause. On the merits, this might be true, and the parties can certainly litigate this issue at trial. As a threshold matter, however, these arguments of proximate causation do not divest plaintiffs of standing to bring their well-pleaded RICO claims. 16 We recognize that questions of proximate causation often converge at a point existing between standing and the merits. Holmes, 503 U.S. at 268–69. But however large the overlapping space in this metaphorical Venn diagram, the questions raised by defendants are firmly in the merits circle. -47-