Pik-Coal Co. v. Big Rivers Electric Corp.

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

ELECTRONIC CITATION: 2000 FED App. 0010P (6th Cir.)

File Name: 00a0010p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

;



PIK-COAL COMPANY,



Plaintiff-Appellant,





No. 98-5974

v.



>

BIG RIVERS ELECTRIC 





CORPORATION, EDDIE RAY

INC., E & M COAL COMPANY, 

BROWN, EMBRO HOLDINGS,





ROSE BROTHERS TRUCKING,

INC., SOLAR SOURCES, INC., 





WILLIAM H. THORPE, and

Defendants-Appellees. 

SHIRLEY PRITCHETT,



1

Appeal from the United States District Court

for the Western District of Kentucky at Owensboro.

No. 94-00049—Jennifer B. Coffman, District Judge.

Argued: August 12, 1999

Decided and Filed: January 7, 2000

1

2 Pik-Coal Co. v. Big Rivers No. 98-5974

Electric Corp., et al.

Before: KRUPANSKY and RYAN, Circuit Judges;

HULL,* District Judge.

_________________

COUNSEL

ARGUED: Harry L. Mathison, KING, DEEP &

BRANAMAN, Henderson, Kentucky, for Appellant. Daniel

Kelley, ICE, MILLER, DONADIO & RYAN, Indianapolis,

Indiana, for Appellees. ON BRIEF: Harry L. Mathison,

KING, DEEP & BRANAMAN, Henderson, Kentucky, for

Appellant. Daniel Kelley, ICE, MILLER, DONADIO &

RYAN, Indianapolis, Indiana, David V. Miller, Greg A.

Granger, BOWERS, HARRISON, KENT & MILLER,

Evansville, Indiana, for Appellees.

_________________

OPINION

_________________

KRUPANSKY, Circuit Judge. The plaintiff-appellant Pik-

Coal Company (“Pik”), an Indiana corporation engaged in the

coal brokering business, has contested the initial forum’s

dismissal, for failure to state a claim, of its amended

complaint against defendants-appellees Big Rivers Electrical

Corporation (“Big Rivers”),1 Eddie Ray Brown (“Brown”),

Embro Holdings, Inc. (“Embro”), E & M Coal Company (“E

& M”), Rose Brothers Trucking, Inc. (“Rose”), Solar Sources,

Inc. (“Solar”), William H. Thorpe (“Thorpe”), and Shirley

*

The Honorable Thomas G. Hull, United States District Judge for the

Eastern District of Tennessee, sitting by designation.

1

On October 2, 1998, in accordance with the plaintiff-appellant’s

stipulation, the Sixth Circuit released defendant-appellee Big Rivers from

this action, because, on September 25, 1996, it had commenced Chapter

11 bankruptcy proceedings. See 11 U.S.C. § 362 (automatic stay).

14 Pik-Coal Co. v. Big Rivers No. 98-5974 No. 98-5974 Pik-Coal Co. v. Big Rivers 3

Electric Corp., et al. Electric Corp., et al.

and remote byproducts of Big Rivers’ election to contract its Pritchett (“Pritchett”). The plaintiff’s complaint had alleged

coal supply from E & M to the exclusion of Alley-Cassetty. that various actions taken by the defendants, individually or

Assuming arguendo that the defendants, individually or in in concert with others, dispossessed it of certain contractual

tandem, had impinged RICO by corruptly prompting or coal brokerage commissions, in purported violation of the

influencing Big Rivers to so assign Contract 589, the plaintiff Racketeer Influenced and Corrupt Organizations Act, 18

nonetheless can neither plead nor prove any proximately- U.S.C. §§ 1961-1968 (“RICO”), as well as Kentucky law.

caused losses to itself, because all of its purported financial

disadvantages were incidental to those realized primarily by This reviewing court has presumed that the plaintiff’s

intermediate parties, to wit, Alley-Cassetty and/or Big Rivers. allegations are true upon plenary scrutiny of the lower court’s

Hence, although the plaintiff may possess potential causes of dismissal of count2 one of the amended complaint for failure

action against some, or all, of 11the defendants buttressed by to state a claim. The plaintiff has alleged that, during

other legal rights or doctrines, it has no colorable RICO October 1978 [1979?], Big Rivers, the owner and operator of

claim against any defendant. On de novo consideration, the electrical power plants located in western Kentucky, issued a

plaintiff’s RICO cause (count one) is dismissed with public solicitation for bids on “Contract 589,” a long term

prejudice under Fed R. Civ. P. 12(b)(6) for failure to state a coal supply contract. In response, several coal brokers

claim; and the plaintiff’s three Kentucky law charges (counts submitted sealed competitive bids. The bid of Alley-Cassetty

two, three, and four) are dismissed without prejudice, in the Coal Company (“Alley-Cassetty”) was the lowest.

exercise of the court’s discretion to decline supplemental Apparently assuming that Big Rivers’ consequent award of

jurisdiction under 28 U.S.C. § 1367(a) & (c)(3), in the Contract 589 to Alley-Cassetty was inevitable, the plaintiff,

absence of original federal jurisdiction over any pending on November 8, 1979, executed a written contract with Solar,

claim following the dismissal of count one. the owner and operator of coal mines located in Indiana,

Thus, the district court’s judgment of June 18, 1998 is

AFFIRMED. 2

The Sixth Circuit has pronounced:

Whether a district court has correctly dismissed a suit

pursuant to Fed. R. Civ. P. 12(b)(6) [failure to state a claim] is

a question of law, and therefore subject to de novo review. The

district court must construe the complaint in a light most

favorable to the plaintiff, accept all of the factual allegations as

true, and determine whether the plaintiff undoubtedly can prove

no set of facts in support of his claims that would entitle him to

relief. When an allegation is capable of more than one

inference, it must be construed in the plaintiff's favor. Hence, a

judge may not grant a Rule 12(b)(6) motion based on a disbelief

of a complaint’s factual allegations.

11 Columbia Natural Resources, Inc. v. Tatum, 58 F.3d 1101, 1109 (6th Cir.

Excepting the federal RICO claim in controversy (count one), this 1995) (citations omitted).

reviewing forum expresses no view regarding the merits, or lack thereof,

of any other claim which the plaintiff may have against any defendant or Accordingly, this appellate forum expresses no view regarding the

potential defendant. truthfulness or accuracy of any allegation related in this decision.

4 Pik-Coal Co. v. Big Rivers No. 98-5974 No. 98-5974 Pik-Coal Co. v. Big Rivers 13

Electric Corp., et al. Electric Corp., et al.

under the terms of which the plaintiff would have the Accordingly, Pik’s alleged economic injuries were indirect

exclusive right to “represent” Solar’s sale of coal to Big

Rivers "for a period of six (6) months and so long as any

orders or contracts are in force, including any extension or

renewal thereof." would have earned if Alley-Cassetty had attained Contract 589. The

plaintiff’s cryptic conspiracy allegation, which in its entirety recited that

The contract between Pik and Solar did not allude to the “[t]he defendants conspired to violate 18 U.S.C. § 1962(c) in violation of

18 U.S.C. § 1962(d)," omitted essential allegations detailing an agreement

Alley-Cassetty bid, however, the parties apparently intended to jointly undertake specific actions illegalized by RICO. See Craighead

that Pik would act as the broker for Solar’s coal furnished to v. E.F. Hutton & Co., Inc., 899 F.2d 485, 495 (6th Cir. 1990) (remarking

Big Rivers to satisfy Alley-Cassetty’s supply obligations to that a RICO conspiracy count must plead an agreement to engage in

Big Rivers following Big Rivers’ anticipated acceptance of specified conduct which would violate RICO).

Alley-Cassetty’s low bid on Contract 589. Pik also mediated

a separate understanding between Solar and Alley-Cassetty Moreover, the amended complaint was devoid of any allegation that

whereby Solar would supply Big Rivers with the coal required Solar, either acting solo or in conjunction with any other defendant(s),

had engaged in a pattern of racketeering activity, even assuming

by Contract 589 if Big Rivers awarded that contract to Alley- arguendo that it contained allegations of racketeering acts by Solar. See

Cassetty.3 The Pik/Solar agreement required Solar to pay Pik 18 U.S.C. § 1962(c) (illegalizing the conduct of an interstate enterprise

six percent (6%) of the purchase price (F.O.B. mine) of all through a “pattern of racketeering activity”); 18 U.S.C. § 1961(5)

coal sold by Solar to Big Rivers during the contractual period. (defining a “pattern of racketeering activity” to consist of at least two acts

of racketeering). A “pattern of racketeering activity”requires related

predicate acts of racketeering which continued during a substantial period

or which by their nature forebode of future criminal conduct. H.J. Inc. v.

Northwestern Bell Telephone Co., 492 U.S. 229, 240-43 (1989). See also

3 Saglioccolo v. Eagle Ins. Co., 112 F.3d 226, 230 (6th Cir. 1997)

The November 8, 1979 memorial between Pik and Solar posited that (concluding that alleged acts of racketeering which occurred within one

Pik “now has in hand certain coal sale orders, which orders can be filled month were insufficient to constitute a pattern); Vemco, Inc. v.

from SOLAR mines,” although it did not specifically mention the Alley- Camardella, 23 F.3d 129, 134 (6th Cir. 1994) (ruling activities which

Cassetty bid on Contract 589; that “[t]his agreement is not an exclusive transpired within a seventeen month span inadequate to comprise a

sale agreement” and thus “PIK-COAL may sell coal for other parties and "pattern of racketeering activity"); Vild v. Visconsi, 956 F.3d 560, 569

SOLAR may sell its coal through other parties;” but that Pik nonetheless (6th Cir. 1992) (characterizing "a few months" of racketeering activity as

shall have an exclusive right to “represent” Solar’s coal sales to Big insufficient to create a continuous "pattern"). In the action sub judice, the

Rivers for a six month period “and so long thereafter as any orders or amended complaint merely charged that, on a single day (December 28,

contracts are in force, including any extension or renewal thereof.” 1979), Solar placed two telephone calls – one to Pik, by which it

Although the precise stipulations of the written compact between Pik and purported to cancel the agreement under which Pik would supply the

Solar, when considered together, were ambiguous regarding the precise embryonic Big Rivers/Alley-Cassetty “contract” with Solar’s coal; and

rights and obligations of the signatories (and neither the written contract one to a truck driver who was not even a Pik employee, by which it

itself nor the amended complaint revealed which party had drafted that allegedly “threatened” him to prevent his haulage of Solar coal “to supply

writing), the allegations of Pik’s amended complaint, as well as the the contract [sic] with Alley-Cassetty.” RICO incorporates, inter alia,

assertions contained within its appellant’s brief, unambiguously reflected acts illegalized by 18 U.S.C. § 1343 (the federal criminal wire fraud

Pik’s hypothesis that it was deprived of commissions under its contract statute) and 18 U.S.C. § 1951 (the federal criminal commercial extortion

with Solar solely because Big Rivers awarded Contract 589 to E & M statute) within its definition of “racketeering activity.” 18 U.S.C.

rather than Alley-Cassetty, as evolved below. Stated differently, the § 1961(1). Even if, as contended by the plaintiff, those two averred

plaintiff has theorized that its contractual entitlement to sales commissions telephonic communications could be construed as potentially criminalized

from Solar was contingent upon Big Rivers’ award of Contract 589 to by sections 1343 and/or 1951 (which is highly doubtful), Pik has, beyond

Alley-Cassetty. controversy, failed to allege a sufficient RICO “pattern” of such offenses.

12 Pik-Coal Co. v. Big Rivers No. 98-5974 No. 98-5974 Pik-Coal Co. v. Big Rivers 5

Electric Corp., et al. Electric Corp., et al.

agents and alleged co-conspirators caused it to award Contract However, Big Rivers ultimately did not accept Alley-

589 to an averredly economically unstable enterprise, namely Cassetty’s offer. Instead, in September 1980, it awarded

defendant E & M; which in turn harmed Alley-Cassetty Contract 589 to defendants Brown and E & M.4 The plaintiff

financially by forestalling Big Rivers from granting it has charged that Brown secured Contract 589 by means of

Contract 589 irrespective of its initially attractive proposal. illegal bribes, delivered via the United States mail, to certain

employees of Big Rivers, including defendants Thorpe and

Pik had not executed a written contract with either Big Pritchett. In exchange for illicit payments, a Big Rivers

Rivers or Alley-Cassetty; rather, it had merely agreed with manager allegedly funneled confidential and proprietary

Solar to “represent” its sale of coal to Big Rivers, subject to inside information, including the terms of Alley-Cassetty’s

conditions, during a specified six month term.9 The coal supply proposal, to the Brown defendants. Using that

plaintiff’s alleged losses were caused by Big Rivers’ failure illegally obtained intelligence, coupled with the favorable

to purchase Solar coal during the six month period of the influence of corrupted Big Rivers employees, the Brown

Pik/Solar contract because Big Rivers elected not to award defendants allegedly deprived Alley-Cassetty of Contract 589,

Contract 589 to Alley-Cassetty. Hence, because Pik had which in turn divested Pik of commissions which it would

brokered the deal between Alley-Cassetty and Solar upon the have earned by virtue of its written agreement with Solar

assumption that Big Rivers would confer Contract 589 upon contingent upon Alley-Cassetty’s attainment of Contract 589.

Alley-Cassetty, whereas ultimately Big Rivers invested that

opportunity in E & M rather than Alley-Cassetty, Pik was (at Pik averred that, between December 20 and 27, 1979, Solar

most) indirectly divested, by the defendants’ alleged conduct, had shipped quantities of coal to Big Rivers in apparent

of inchoate commission rights which it would have possessed partial performance of Alley-Cassetty’s putative obligations

under its contract with Solar if Alley-Cassetty had received under its submitted but as-yet-unaccepted coal supply

Contract 589.10 proposal. However, on or about December 28, 1979, a Solar

representative telephoned Pik to “cancel” the November 8,

1979 Pik/Solar agreement. On that same day, a Solar

9

employee purportedly threatened, via telephone, a coal hauler,

As developed above, Pik’s amended complaint alleged that it had with the intent of restraining him from transporting coal from

arranged a deal between Solar and Alley-Cassetty whereby Solar would Solar’s mines in ostensible satisfaction of the incipient but

supply Alley-Cassetty, and in turn Big Rivers, with coal as required under

Contract 589. However, Pik did not aver that it had commenced any unconsummated contract between Alley-Cassetty and Big

contractual relationship with Alley-Cassetty. In any event, an allegation Rivers.

by Pik that it had a direct contractual relationship with Alley-Cassetty

would not have altered the result herein, because Pik’s pleaded injuries In all events, the Pik/Solar contract’s six month term

would remain secondary to losses suffered by Alley-Cassetty allegedly expired on May 8, 1980. After that date, on June 16, 1980,

caused by the defendants’ charged RICO offenses. Brown, as principal of E & M, secretly submitted a formal

10 coal supply proposal to Big Rivers which underbid the

Although Pik alleged that it had a direct contractual relationship

with Solar, it has failed to aver any damages directly suffered by it as the

result of any conduct by Solar which arguably infringed RICO strictures. 4

Instead, it has merely alleged that it ultimately suffered remote losses Defendant Brown allegedly was "the ultimate beneficial owner" of

because Solar vended coal to Big Rivers via E & M rather than Alley- defendants E & M, Embro Holdings, and Rose Brothers Trucking.

Cassetty, which deprived Pik of the six percent commission on all Solar Accordingly, those litigants are sometimes collectively referenced herein

coal distributed to Big Rivers during at least a six month term which it as “the Brown defendants.”

6 Pik-Coal Co. v. Big Rivers No. 98-5974 No. 98-5974 Pik-Coal Co. v. Big Rivers 11

Electric Corp., et al. Electric Corp., et al.

standing Alley-Cassetty offer. On September 16, 1980, Big suffered by the broker-dealers. That is, the conspirators

Rivers accepted the E & M bid, despite E & M’s averred poor have allegedly injured these customers only insofar as the

contemporaneous financial condition. E & M subsequently stock manipulation first injured the broker-dealers and

discharged its coal supply commitments to Big Rivers by left them without the wherewithal to pay customers'

acquiring coal from Solar’s mines. Naturally, because Pik claims. . . . The broker-dealers simply cannot pay their

had no contractual relationship with Solar after May 1980, it bills, and only that intervening insolvency connects the

received no commissions for those sales. The Brown conspirators' acts to the losses suffered by the

defendants’ alleged mail frauds, briberies, and kickbacks nonpurchasing customers and general creditors.

continued between 1980 and 1992, during which period they

allegedly continued to financially influence employees of Big Id. at 271 (citing Associated General Contractors of Cal., Inc.

Rivers to award additional coal purchase contracts to them. v. Carpenters, 459 U.S. 519, 534 (1983) (quoting Southern

The plaintiff initially learned of the subject corrupt Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531,

arrangements in 1993, following publication by the Kentucky 533 (1918) (per Holmes, J.) ("`The general tendency of the

Public Service Commission of an investigatory audit report law, in regard to damages at least, is not to go beyond the first

which examined Big Rivers’ business activities and practices step.’")).

spanning late 1979 through 1992.

The logic of Holmes and its Sixth Circuit progeny8 compels

On March 16, 1994, Pik inaugurated the instant action via the conclusion that Pik’s instant RICO claims were not, and

a four-count complaint in federal district court which charged could not be, supported by sufficiently proximate injuries. At

(1) a RICO conspiracy against all defendants by which they most, Pik has alleged, and could only allege, that the

deprived the plaintiff of sales commissions which it would defendants’ conspiratorial acts directly and proximately

have earned under its November 8, 1979 agreement with injured Big Rivers because the corruption of that defendant’s

Solar if Big Rivers had awarded Contract 589 to Alley-

Cassetty instead of E & M (count one), (2) Kentucky law

breach of contract against Solar (count two), (3) state law 8

Following Holmes, the Sixth Circuit reiterated that a civil RICO

tortious interference with its contractual relations with Solar claimant must allege and prove that it realized damages directly caused by

against all defendants except Solar (count three), and (4) the defendants’ conduct violative of RICO; mere “but for” injuries

Kentucky law fraud against Big Rivers (count four). The consequent to intervening losses directly caused to another party are

plaintiff requested compensatory damages in excess of $1 insufficient. See, e.g., Firestone v. Galbreath, 976 F.2d 279, 285 (6th

million on each cause, plus treble damages on count one; as Cir. 1992) (affirming the district court's dismissal of a count instigated by

the heirs of a decedent which alleged that the defendants had committed

well as legal interest, costs, and attorney fees. On May 28, RICO offenses against the decedent which diminished the value of the

1996, the district court sustained Solar’s petition to dismiss decedent's estate, ruling that, because the estate was the party primarily

count one for failure to assert a valid claim, ruling that Pik injured by the charged conduct, the alleged harm to the plaintiffs as

had neglected to adequately allege that Solar had committed beneficiaries of that estate was indirect and thus not proximate even if

any predicate act of racketeering or that it had conspired with they suffered actual "but for" monetary losses); Sanders Confectionary

Products, Inc. v. Heller Financial, Inc., 973 F.2d 474, 487 (6th Cir. 1992)

any co-defendant to commit a predicate act of racketeering. (sustaining the trial court's resolution that, because the defendant’s

18 U.S.C. §§ 1961(1) & (5), 1962. On June 13, 1996, the trial alleged RICO violations which caused a diminution in the value of

forum granted the plaintiff leave to file an amended corporate shares directly harmed the corporation, an injured owner of

complaint. On July 9, 1996, the plaintiff lodged its four-count shares of the company’s devalued stock lacked standing to sue those

defendants under RICO because its damages were non-proximate).

10 Pik-Coal Co. v. Big Rivers No. 98-5974 No. 98-5974 Pik-Coal Co. v. Big Rivers 7

Electric Corp., et al. Electric Corp., et al.

can generally be counted on to vindicate the law as amended complaint which, inter alia, incorporated new

private attorneys general, without any of the problems allegations against Solar intended to correct the defects

attendant upon suits by plaintiffs injured more remotely. identified in the trial bench’s May 28, 1996 order.5

Id. at 268-70. (Citations omitted; emphases added). On June 18, 1998, the trial court dismissed count one for

failure to state a claim against any defendant, reasoning that

In Holmes, the defendant securities brokers/dealers Pik had alleged proximate injuries only to Big Rivers and/or

fraudulently manipulated certain stock prices, which Alley-Cassetty but had failed to assert any direct damage to

ultimately caused numerous investors to suffer damages. itself caused by any defendant’s RICO infraction(s). See

Concurrently, the defendant securities dealers themselves Holmes v. Securities Investor Protection Corp., 503 U.S. 258

incurred consequent financial losses which subsequently (1992). Additionally, the trial court declined to exercise

disabled them from satisfying various obligations to their discretionary supplemental jurisdiction over the three pendent

clients and others. The Securities Investor Protection state law claims, and accordingly struck the entire action from

Corporation (“SIPC”), a private nonprofit membership

corporation chartered by 15 U.S.C. § 78ccc(a)(1) to which the

defendants belonged by operation of 15 U.S.C.

5

§ 78ccc(a)(2)(A), ultimately satisfied its errant members’ The material allegations against Solar which Pik had added by

undischarged financial commitments to their former amendment to paragraph 5 of count one recited:

customers and general creditors, including erstwhile patrons

who had not purchased “watered” stock. Subsequently, the (a) On or about December 28, 1979, the defendant, Solar

Sources, Inc., for the purpose of executing a scheme or artifice

SIPC claimed reimbursement of those expenditures from the to defraud, made use of the telephone to call the plaintiff and

defendants, propped by securities fraud and RICO theories. solicit its assistance in executing that scheme by canceling the

Holmes, 503 U.S. at 261-65 & n.7. Reversing the Ninth contractual agreement to supply Alley-Cassetty with the coal to

Circuit, the Supreme Court sustained the district court’s meet the contractual requirements of BREC [Big Rivers] in

dismissal of RICO counts which sought recovery for violation of 18 U.S.C. § 1343.

payments which the SIPC had made to the defendants’ former (b) On or about December 28, 1979, the defendant, Solar

clients who had not purchased artificially value-inflated Sources, Inc., for the purpose of executing a scheme or artifice

shares but instead had suffered losses, which the SIPC to defraud, made use of the telephone to call Hurtis Gammon

eventually compensated, merely by reason of the defendants’ and threaten him so as to prevent him from continuing to haul

overall financial impairments caused by their unrelated coal from the mine of Solar Sources, inc. [sic] to supply the

contract with Alley-Cassetty in violation of 18 U.S.C. § 1343

wrongful price manipulations of certain equities. See id. at and 18 U.S.C. § 1951.

270. The Court anchored that ruling in the SIPC’s failure to

satisfy the proximate causation requirement. The Court (c) Despite the fact that it had shipped coal to BREC to

mandated: supply the Alley-Cassetty contract on December 20, 1979,

December 21, 1979, December 22, 1979, December 26, 1979,

[E]ven assuming, arguendo, that it [SIPC] may stand in and December 27, 1979, the defendant, Solar Sources, Inc.,

entered into an agreement with Brown to supply Brown and E &

the shoes of nonpurchasing customers, the link is too M with the coal necessary to fulfill Contract No. 589 with BREC

remote between the stock manipulation alleged and the without paying the plaintiff commissions on such sales due

customers' harm, being purely contingent on the harm under an agreement dated November 8, 1979, a copy of which

is attached hereto as Exhibit “A”.

8 Pik-Coal Co. v. Big Rivers No. 98-5974 No. 98-5974 Pik-Coal Co. v. Big Rivers 9

Electric Corp., et al. Electric Corp., et al.

its docket. 28 U.S.C. § 1367(a) & (c)(3). Pik noticed a court and shall recover threefold the damages he sustains

timely appeal6 on July 13, 1998. and the cost of the suit, including a reasonable attorney's

fee . . . .

The plaintiff has alleged that the defendants violated RICO

section 1962 ("Prohibited activities"), subparts (c) and (d), 18 U.S.C. § 1964(c) (emphases added).

which state:

Accordingly, to sustain a RICO § 1962 civil treble damages

It shall be unlawful for any person employed by or action against any defendant, a plaintiff must plead and prove

associated with any enterprise engaged in, or the an actual injury to its business or property "by reason of" a

activities of which affect, interstate or foreign commerce, defendant’s section 1962 transgression. The Supreme Court,

to conduct or participate, directly or indirectly, in the in Holmes v. Securities Investor Protection Corp., 503 U.S.

conduct of such enterprise's affairs through a pattern of 258 (1992), dictated that mere allegation and/or evidence that

racketeering activity or collection of unlawful debt.7 an injury to the plaintiff would not have occurred "but for" the

defendant's alleged RICO violation (that is, that the plaintiff

18 U.S.C. § 1962(c). sustained a mere "injury in fact") is insufficient to establish

RICO causation. Id. at 265-68. Instead, the plaintiff must

It shall be unlawful for any person to conspire to plead and prove "proximate causation." The Court explained:

violate any of the provisions of subsection (a), (b), or (c)

of this section. [A]mong the many shapes this concept [proximate

causation] took at common law was a demand for some

18 U.S.C. § 1962(d). direct relation between the injury asserted and the

injurious conduct alleged. Thus, a plaintiff who

Section 1964 created civil remedies for RICO section 1962 complained of harm flowing merely from the misfortunes

infractions: visited upon a third person by the defendant's acts was

generally said to stand at too remote a distance to

Any person injured in his business or property by recover.

reason of a violation of section 1962 of this chapter may

sue therefor in any appropriate United States district . . . . First, the less direct an injury is, the more

difficult it becomes to ascertain the amount of a

plaintiff's damages attributable to the violation, as

6 distinct from other, independent, factors. Second, quite

The Brown defendants submitted a joint appellees’ brief herein on

November 12, 1998. Defendant Solar filed a separate appellee’s brief on apart from problems of proving factual causation,

November 20, 1998. Defendant-appellees Thorpe and Pritchett petitioned recognizing claims of the indirectly injured would force

the instant bench on October 9, 1998, and October 13, 1998, respectively, courts to adopt complicated rules apportioning damages

to adopt the opposition briefs of Solar and the Brown defendants. Those among plaintiffs removed at different levels of injury

motions are hereby granted.

from the violative acts, to obviate the risk of multiple

7

“A violation of RICO under 18 U.S.C. § 1962(c) requires (1)

recoveries. And, finally, the need to grapple with these

conduct (2) of an enterprise (3) through a pattern (4) of racketeering problems is simply unjustified by the general interest in

activity.” Kenty v. Bank One, Columbus, N.A., 92 F.3d 384, 389 (6th Cir. deterring injurious conduct, since directly injured victims

1996) (citing Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985)).