MSP Recovery Claims, Series LLC, a Delaware Series Limited Liability Company, et al. v. Lundbeck LLC, a Delaware Corporation, et al.

The Racketeer Influenced & Corrupt Organizations Act (“RICO”) provides a private cause of action to “[a]ny person injured in his business or property by reason of a violation of” 18 U.S.C. § 1962. 18 U.S.C. § 1964. This Court has long held “by reason of” requires a showing of proximate cause. Holmes v. Sec. Inv. Prot. Corp., 503 U.S. 258, 268 (1992). In civil RICO actions against drug manufacturers for overpayment of drugs, a circuit split has developed over whether physicians’ prescribing decisions defeat proximate cause. Three circuits have concluded that a physician’s decision does not defeat proximate cause. Two circuits have concluded the opposite. Below, the Fourth Circuit joined the minority view. Additionally, the courts of appeals are fractured over whether, in the RICO proximate cause analysis, the foreseeability can support the directness of a RICO injury. Five circuits have held that foreseeability is part of proximate cause. One circuit has held that foreseeability has no bearing on proximate cause at all. Four circuits have adopted conflicting holdings, including the Fourth Circuit. The questions presented are:

1. Whether, in a civil RICO action against a drug manufacturer for overpayment of drugs, physicians’ prescribing decisions constitute an intervening cause.

2. Whether the RICO injury of a primary and intended victim is a direct result of a scheme to defraud when it is the natural and foreseeable consequences of such scheme.