MEMORANDUM AND ORDER
TABLE OF CONTENTS
I. INTRODUCTION 223
*223 II. FACTS...................................................................223
A. Plaintiffs’ Original Claims................................................223
B. Procedural Background .................................................224
C. Amendments To Plaintiffs’ Original Complaints.............................224
III. ANALYSIS OF CLAIMS...................................................224
A. “Direct” RICO.........................................................224
1. Proximate Causation Generally.......................................225
2. Laborers Local.....................................................225
3. Application Of Law To Blue Cross And National Asbestos ...............226
B. Subrogation............................................................228
1. RICO Claims ......................................................228
2. Pecuniary Losses Associated With Personal Injuries ....................229
a. Statutory Language.............................................229
b. Legislative Purpose.............................................230
c. Case Law......................................................231
d. RICO Limitations In Other Circuits...............................234
e. Laborers Local 17...............................................237
C. Aggregation Of Claims..................................................238
D. State Claims...........................................................239
TV. CONCLUSION............................................................240
I. INTRODUCTION
Defendants moved to dismiss the complaints in these two cases on the theory that a decision in
Laborers Local 17 Health & Benefit Fund v. Philip Morris, Inc.,
(“Laborers Local 17”),
Laborers Local 17
held that the plaintiffs’ injuries in that case were too remote — i.e., were not proximately caused'— to support a cause of action under RICO. As observed in an opinion issued prior to
Laborers Local 17,
and as
Laborers Local 17
itself recognized, the legal concept of proximate causation is a normative, flexible, and highly fact specific doctrine which requires individualized inquiry in each case.
See Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris, Inc.,
There are differences between the parties and circumstances in the present cases and those in Laborers Local 17 relevant to the proximate cause inquiry and providing grounds to distinguish the two litigations. Laborers Local 17 does not preclude the instant cases’ complaints. Even if the plaintiffs’ federal causes of action, as originally stated, are ultimately found to be barred by Laborers Local 17, neither of the present actions can be dismissed at the pleading stage. The plaintiffs in both cases have amended their complaints to state valid, alternative theories of liability.
II. FACTS
A. Plaintiffs’ Original Claims
Both cases involve claims by medical providers to be compensated for the economic injuries they have allegedly sustained as a result of the treatment of tobacco related illnesses. In both cases *224 the defendants are the major tobacco manufacturers and related entities.
In Blue Cross & Blue Shield of New Jеrsey, Inc., et al. v. Philip Morris, Inc., et al. (“Blue Cross”), the plaintiffs are medical provider plans (“The Blues”) claiming violations of both federal and state law. The federal causes of action are brought under the Racketeer Influenced and Corrupt Organizations Act (RICO) and antitrust statutes. The pendent state law claims are asserted under various state statutes and under common law theories such as fraudulent misrepresentation, fraudulent concealment, breach of special duty, unjust enrichment, and conspiracy.
In The National Asbestos Workers Medical Fund, et al. v. Philip Morris, Inc., et al. (“National Asbestos”), the plaintiffs are self-insured ERISA trust funds which provide health care benefits to union workers in the building trades. The plaintiffs state claims under federal RICO and under federal common law on theories of unjust enrichment, restitution, indemnity, and breach of assumed duty.
See Blue Cross,
B. Procedural Background
On October 19, 1998, defendants’ Rule 12(b)(6) motion in National Asbestos was denied.
See National Asbestos,
On March 30, 1999, the defendants’ motion to dismiss in Blue Cross was denied.
See Blue Cross,
Ten days after the
Blue Cross
opinion was issued and approximately six months after the
National Asbestos
opinion, the court of appeals of the Second Circuit decided an interlocutory appeal in a case involving RICO allegations against the tobacco industry by union trust fund-insurers.
See Laborers Local 17 Health & Benefit Fund v. Philip Morris, Inc.,
C. Amendments To Plaintiffs’ Original Complaints
In June 1999 plaintiffs in both Blue Cross and National Asbestos moved to amend their complaints to add new claims and to restate, in the alternative, the original federal and state claims under subro-gation; they continued to press all their original claims. They were permitted to amеnd their complaints pursuant to the liberal standards of Rule 15 of the Federal Rules of Civil Procedure. Decision was reserved on whether the amended complaints stated valid causes of action.
III. ANALYSIS OF CLAIMS
A. “Direct” RICO
Defendants contend that Laborers Local 17 bars plaintiffs’ original RICO claims. In contrast, plaintiffs argue that there are important factual and pleading distinctions between Laborers Local 17 and Blue Cross and National Asbestos which distinguish the cases.
*225 1. Proximate Causation Generally
The legal concept of proximate causation mandates a multi-faceted and highly fact specific inquiry. Proximate cause analysis is driven by considerations of policy, fairness, and practicability, rather than by a rigid adherence to classifications or abstractions. The Supreme Court has pointed out that the proximate causation decision should be guided by a flexible, case-by-case approach. In
Associated General Contractors v. California State Council of Carpenters,
[T]he infinite variety of claims that may arise make it virtually impossible to announce a black-letter rule that will dictate the result in every case. Instead, previously decided cases identify factors that circumscribe and guide the еxercise of judgment in deciding whether the law affords a remedy in specific circumstances.
In
Holmes v. Securities Investor Protection Corp.,
The formulation of rigid, simple rules for proximate cause is often inappropriate. The classification of claims and injuries into a
priori
categories such as “derivative” or “direct” is at times an exercise in obscuration.
See, e.g., Blue Cross,
New problems of proximate causation require a normative inquiry based at least in part upon notions of social justice. As a leading treatise on tort law sums up the matter:
“Proximate cause” ... is merеly the limitation which the courts have placed upon the actor’s responsibility for the consequences of the actor’s conduct.... Some boundaries must be set to liability for the consequences of any act, upon the basis of some social idea of justice or policy.
This limitation is to some extent associated with the nature and degree of the connection in fact between the defendant’s acts and the events of which the plaintiff complains. Often to greater extent, however, the legal limitation on the scope of liability is associated with policy — with our more or less inadequately ' expressed ideas of what justice demands, or of what is administratively possible and convenient.
W. Page Keeton et al.,
Prosser and Keeton on the Law of Torts
§ 41, at 264 (5th ed.1984);
see also Holmes,
Analysis of proximate causation must remain flexible, rather than static: as society, its needs, and its norms change, so too must the contours of tort liability and enforcement procedures.
2. Laborers Local 17
In
Laborers Local 17,
the court concluded that the RICO claims of the union trust funds were “too remote” as a matter of law. The court acknowledged that a black letter rule precluding all claims capable of being characterized аs “derivative” or “indirect” would be inconsistent with the modern notion of proximate cause and Supreme Court case law. “[W]here a plaintiff complains of injuries that are wholly derivative of harm to a third party,” the court stated, “plaintiffs injuries are
gener
*226
ally deemed
indirect and as a consequence too remote, as a matter of law, to support recovery.”
Laborers Local 17,
The court of appeals proceeded to analyze the plaintiffs’ claims in the context of the three policy concerns outlined in
Holmes
and discussed in the district court’s
Blue Cross
memorandum.
See Holmes,
Accordingly, we follow the lead of the Holmes Court in making clear that, to the extent our description of “indirect” or “derivative” injury might seem to encompass cases where recovery by the plaintiff would not run afoul of the policy concerns set forth above, the outer limits of the direct injury test are described more by those concerns than by any bright-line, verbal definition.
Laborers Local 17,
Laborers Local 17
rejected the plaintiffs’ complaint only after it had concluded that the claims presented substantial difficulties with respect to the ascertainment and apportionment of damages and after it had decided that the rejection of plaintiffs’ claims would not undermine the policies incorporated in the RICO statute.
See Laborers Local 17,
3. Application Of Law To Blue Cross And National Asbestos
In
Blue Cross,
Even were a court to accept defendants’ proposition that a large part of the reasoning in
Blue Cross
was rejected by
Laborers Local 17,
it does not follow that dismissal is required of the individual claims of thе plaintiffs in the current separate Blue Cross cases. As pointed out in some detail in
Blue Cross,
there are a number of unique features of the Blue Cross plaintiffs and their injuries which are relevant to the proximate cause analysis. Some of these special characteristics were not present in
Laborers Local 17.
A court should hesitate before stretching precedent too broadly with respect to the flexible and highly fact specific analysis of proximate causation, particularly when a new ease presents complicated and distinguishing aspects.
See, e.g., People v. Olah,
The Blues are not simply traditional insurers which passively receive premiums for the purpose of allocating risk. Rather, they play a far more active and direct role in the provision of health care to the general public than do traditional insurers, including the plaintiffs in Laborers Local 17. As observed in Blue Cross:
Today subscribers often rely on organizations such as the Blues not only tо *227 allocate risk, but also to help establish and administer networks of hospitals and physicians to make health care more affordable. The Blues are the largest provider of such managed care programs in the country. Some 45 million individuals are enrolled in some type of managed care administered by the Blues. Through these managed care programs plaintiffs take an active and leading role in shaping the delivery of health care in this country. Directly and indirectly, medical insurers-providers such as the Blues decide what medical procedures will be offered, to whom they will be offered and when and how they will be offered.
The active role of the Blues in providing medical care to the nation’s population is relevant for a number of reasons. First, injuries to the Blues are analogous to other “derivative” injuries, such as loss of consortia, which the law generally favors as compensable. As pointed out in Blue Cross:
Recognizing a direct cause of action on the part of the Blues is consistent with the role plaintiffs play in today’s society. In the same way that a spouse or parent has an obligation to provide for the medical injuries of his spouse or child, nonprofit medical providers such as the Blues have an obligation to supply medical care to their covered populations. More and more, medical providers such as the Blues have assumed the responsibility for ensuring that individuals have access to medical care. For the nearly 70 million people, one out of every four Americans, who rely on the Blues to provide their medical care, plaintiffs occupy a type of parens patriae relationship with their insureds which is analogous to the parent-child relationship.
These unique aspects of the Blues and their injuries are relevant to at least two of the three policy considerations set out in
Holmes.
The court in
Laborers Local 17
reasoned that the apportionment of damages would be complicated by the existence of multiple layers of health cаre insurers.
See
Organizations with the incentives and resources of the Blues are uniquely suited to vindicate the economic injuries sustained by the nations’ health care infrastructure, allegedly as a result of the defendants’ racketeering. The court in
Laborers Local 17
observed that the plaintiffs in that action could initiate a subrogated claim to recover their economic losses.
See
The unique features of the Blues and their injuries support their original RICO claims in light of Laborers Local 17. It is difficult to conclude that the court of appeals intended its proximate cause analysis to apply to the precise set of facts presented in Blue Cross. Despite thе fact that the memoranda in Blue Cross and National Asbestos were issued prior to the court of appeals’ decision in Laborers Local 17, and even though, according to the defendants, the decisions were brought to the panel’s attention before it issued its decision, the facts of Blue Cross and National Asbestos were neither mentioned nor alluded to in Laborers Local 17.
*228 While there appears to be sufficient legal bases for allowing the Blues’ original RICO claims to proceed, that issue need not be definitively decided now. The Blues have amended their complaint to state a valid, alternative basis for recovery under RICO. As a result, there is little to be gained by the dismissal of their original RICO claim at this time. The discovery required by the different claims is virtually identical. Striking of portions of either complaint would not appreciably save time or expense. It would not refine the issues for trial in any meaningful way.
In the case of National Asbestos, there are few features distinguishing it from Laborers Local 17. Thus, dismissal of the plaintiffs’ original stated RICO claims might arguably be warranted. Because these plaintiffs have also amended their complaint to state valid causes of action under an alternate theory, however, the defendants’ motion to dismiss these “direct” RICO claims is denied, with leave to renew in the event that further developments during discovery demonstrate the desirability of pre-trial dismissal.
B. Subrogation
The plaintiffs in Blue Cross and National Asbestos have amended their complaints to add RICO causes of action under a theory of subrogation. These claims are consistent with the policies, legislative history, and statutory language of RICO as well as Supreme Court ease law interpreting the statute. The plaintiffs in both cases will be allowed to pursue this litigation under this theory.
1. RICO Claims
The equitable doctrine of subrogation allows insurers, analogous in some respects to the plaintiffs, to bring their own claims for the recovery of the economic damages incurred as a result of tortious injury to their insureds.
Subrogation functions as a form of assignment. RICO claims are assignable.
See, e.g., Koehler v. NationsBank Corp.,
A number of courts have agreed that a subrogee can assert a RICO claim.
See, e.g., Ramos v. Patrician Equities Corp.,
The Supreme Court has assumed, for purposes of argument, that it was proper for a plaintiff to assert a subrogated RICO claim.
See Holmes,
2. Pecuniary Losses Associated With Personal Injuries
Defendants suggest that the plaintiffs cannot have a subrogated RICO claim because the subrogee plaintiffs “stand in the shoes” of their subrogors and, they argue, the subrogors themselves have no RICO claims for the economic injuries associated with treatment of smoking related illnesses.
The defendants’ analysis is unpersuasive. The recovery of pecuniary losses associated with physical injuries directly caused by racketeering conduct is consistent with the language of the RICO statute. Such claims, furthermore, would materially advance the statute’s legislative purposes of deterring racketeering, in all its forms, and of remedying, as fully as praсticable, the economic consequences of racketeering. Finally, the recovery of these pecuniary losses is consistent with the expansive scope of RICO’s civil remedy provisions as consistently interpreted by the Supreme Court.
a. Statutory Language
The most natural reading of the language in RICO supports the conclusion that pecuniary losses resulting from racketeering and causing personal injuries should be compensable under the statute. The statute confers standing on “[a]ny person injured in his business or property by reason of [racketeering acts defined in the statute].” 18 U.S.C. § 1964(c).
Money, the Supreme Court has recognized in another context, is a form of property.
See Reiter v. Sonotone Corp.,
. Victims of racketeering who have been deprived of their monetary resources as a direct result of racketeers’ predicate acts should, under the most natural interpretation of the phrase “business or property,” recover their pecuniary losses.
A hypothetical will illustrate the anomaly of the restrictive interpretation of the statutory language proposed by the defendants. Assume racketeers attack a manufacturing plant to coerce its owner and an employee, and in so doing throw the owner and her employee through a window. Defendants argue that the racketeers should be made to pay for the costs of the broken window under RICO, but not for the pecuniary costs, such as medical bills or lost wages and profits, associated with the broken arms and legs of the owner and employee. A line must be drawn under the “business and property” rubric of the statute, but it would seem more sensible to draw it between pain and suffering and outlays for repairing windows and limbs.
Limitations of the phrase “business and property” in the antitrust context do not apply to RICO. In an antitrust case, the Supreme Court stated that the phrase “business or injury” excludes “personal injuries suffered.”
Reiter,
RICO standing has been interpreted much more broadly than antitrust law standing which, for example, contains an “antitrust injury” requirement. The concerns which animated RICO were different from those which inform the interpretation of the antitrust statutes. As noted below, RICO was an attempt to deter racketeering in all is aspects, including physical violence aimed at the person, and to remedy the full range of economic consequences of racketeering. Physical violence and attacks upon the person were standard tools of racketeers that RICO was designed to address; such attacks are specifically proscribed by the statute. The two statutes’ coverage of “personal injuries” are not fully congruent.
Most importantly, the RICO statute contains an express admonition that the statute be read broadly in order to effectuate its policies. It provides that, “[t]he provisions of this title shall be liberally construed to effectuate its remedial purposes.” Pub.L. No. 91-452, § 904(a), 84 Stat. 922, 947 (1970);
see also Sedima, S.P.R.L. v. Imrex Co.,
While the phrase “business and property” could be interpreted to exclude all pecuniary losses associated in any way with a personal injury, such an interpretation would undermine the policies of RICO.
b. Legislative Purpose
Analysis of the statute’s legislative history confirms that RICO was intended to deter the use of physical violence by racketeers and to remedy the economic consequences of those physical injuries resulting from racketeering violence.
In enacting RICO, Congress recognized that the use and threat of physical violence were traditional tools of the racketeer and that the infliction of personal injuries could result in substantial economic losses to the victims of racketeering. During the bill’s debate, RICO’s co-sponsor in the Senate summarized the problem Congress faced: “[Organized Crime] employs physical brutality, fear and corruption to intimidate competitors and customers to achieve increased sales and profits.” 116 Cong. Rec. 602 (1970) (statement of Sen. Hruska); see also 113 Cong. Rec. 17998 (1967) (Sen. Hruska, during consideration of a precursor to RICO, describing tools of racketeers as “large amounts of cash coupled with threats of violence, extortion, and similar techniques”).
This concern for the economic consequences of the physical injuries caused by racketeers led Congress to include numerous references to personal injury offenses in RICO’s definition of “racketeering activity.” RICO’s definition of “racketeering activity” includes, for example, “any act or threat” involving murder, kidnaping, robbery, and extortion, which is chargeable under State law and punishable by imprisonment for more than one year. 18 U.S.C. *231 § 1961(1). In addition, RICO’s definition of predicate racketeering acts includes violations of federal laws designed to control damages to the person. See, e.g., 18 U.S.C. § 1513 (retaliating against a witness, victim, or informant), § 1951 (“Hobbs Act,” proscribing interstate robbery, extortion and any threats or acts of physical violence to any person or property in furtherance of interstate robbery or extortion), § 1958 (use of interstate commerce facilities in the commission murder-for-hire) .§§ 2251, 2251A, 2252, 2258 (sexual exploitation of children), and §§ 2421-24 (“white slave” traffic), found in 18 U.S.C. § 1961(1).
The commission of a “pattern” of any of these predicate offenses, when committed in conjunction with the statute’s other requirements, affords a civil remedy for “any person” who has incurred business or property losses as a result of the commission of the predicate acts. 18 U.S.C. § 1964(c). RICO’s legislative scheme evinces a desire on the part of Congress to deter racketeering, in all its forms, including racketeering violence which inflicts personal injuries. As a result, it is reasonable to conclude that RICO is also intended to remedy the range of economic costs of racketeering, including those economic costs racketeers inflict when they choose to achieve their aims through a pattern of violence and physical injury or by fraud calculated to injure the person.
c. Case Law
The Supreme Court’s expansive interpretations of RICO standing support the conclusion that RICO should remedy the pecuniary losses caused by the infliction of personal injuries by racketeers.
In
Sedima, S.P.R.L. v. Imrex Co.,
Where the plaintiff alleges each element of the violation, the compensable injury necessarily is the harm caused by predi- ' cate acts sufficiently related to constitute a pattern, for the essence of the violation is the commission of those acts in connection with the conduct of an enterprise. Those acts are, when committed in the circumstances delineated in § 1962(c), “an activity which RICO was designed to deter.” Any recoverable damages occurring by reason of a violation of § 1962(c) will flow from the commission of the predicate acts.
Sedima,
When the racketeering conduct involves acts of physical violence and injury, the natural interpretation of the phrase “any recoverable damages ... flowing] from the commission of the prеdicate acts” suggests that those who pay an economic price for the racketeering acts are included in the class of individuals who may recover.
This conclusion is further supported by the fact that the majority in
Sedima
rejected an attempt by the dissent to limit RICO in a manner analogous to that now proposed by the defendants. In
Sedima,
the dissent urged that the direct victims of predicate acts such as murder and kidnap-ing be excluded from recovery under the statute in order to limit recovery to those parties suffering “commercial” losses.
See Sedima,
Additional support is provided by the Supreme Court’s holding and reasoning in
National Organization for Women, Inc. v. Scheidler,
Rejecting several lower court holdings that RICO’s civil rеmedies require racketeering activity that is motivated by an economic purpose, the Supreme Court in Scheidler held that the plaintiff clinics’ allegations were sufficient to state a claim under RICO:
[The plaintiffs clinics] alleged in their complaint that respondents conspired to use force to induce clinic staff and patients to stop working and obtain medical services elsewhere. Petitioners claimed that this conspiracy “has injured the business and/or property interests of the [petitioners].” In addition, petitioners claimed that respondent Scheidler threatened [plaintiffs] clinic administrator with reprisals if she refused to quit her job at the clinic.... Nothing more is needed to confer standing on [plaintiff clinics] at the pleading stage.
Scheidler,
510 U.S at 256,
As the Court’s reasoning in Scheidler illustrates, RICO provides a civil recovery for businesses which have suffered economic loss as a result of actual or threatened physical violence conducted in a pattern of racketeering. If a business were required to shut down by virtue of racketeering-inflicted personal injuries to its workers, the Court’s analysis in Scheidler suggests that the business should, also be allowed to recover those economic losses resulting from the closure. There appears to be no principled basis for allowing the business to recoup these costs while denying that same right to the injured employees, who also have sustained real pecuniary losses and therefore have been “injured in their property.” The encompassing phrase “any person” contained in the statute’s standing provision, as well as RICO’s mandate to liberally construe the provisions of the statute to effectuate the statute’s policies, require that the same remedies available to businesses also be extended to individuals who have sustained economic losses.
It is often difficult to draw a clear distinction between the economic losses borne by individuals and by businesses. In the instant case, where those injured in their “persons” were fortunate to have medical insurance, the costs have ultimately been borne by the Blues who are in the business of providing health care to the nation. These alleged economic injuries to the plaintiffs’ business and property have allegedly undermined the financial health and stability of a critical industry in this nation — that devoted to health care of millions of people. See, e.g., Vernellia R. Randall, Managed Care, Utilization Re *233 view, and Financial Risk Shifting, 17 U. Puget Sound L.Rev. 1, 3 (1994) (“[T]he costs of health care delivery has increased and has become a national concern. ”); Peter T. Kilborn, Experts Offer Information About Americans Without Health Insurance, N.Y. Times, Feb. 26, 1999, at A1 (43.4 million Americans without insurance, “adding to the burdens on the nation’s health care system”). Employers have even found it increasingly expensive and difficult to fund health care coverage for their own employees. See Jennifer Stein-hauer, Health Insurance Costs Rise, Hitting Small Business Hard, N.Y. Times, Jan. 19, 1999, at Al. Businesses have been forced to devote larger and larger portions of their resources to providing health care or have reduced benefits to their workers, compelling taxpayers, the plaintiffs, and premium payers to subsidize the medical treatment of those who can no longer afford insurance. Research or treatment ivhich would have been supported by resources of the health care industry have, it is contended, gone unfulfilled as a result of the defendants’ racketeering. This is arguably precisely the type of economic injury ivhich RICO was designed to address and deter.
A number of courts, including two district courts in this circuit, have accepted оr shown a disposition in favor of allowing RICO claims for the pecuniary losses associated with physical injuries caused by racketeering.
See Libertad v. Welch,
The plaintiff in Rice, a night watchman and janitor at a business establishment, was allegedly assaulted and beaten while his place of employment was fire bombed. The court concluded that the plaintiffs loss of wages was a compensable injury under RICO:
The defendants’ arguments that plaintiffs claim for lost wages should not be within the scope of injuries recoverable under RICO conflict with these conclusions in Sedima Injuries resulting from the predicate offenses are compen-sable under the act. The scope of recoverable damages for injury “in his business or property” is to be broadly construed.... The narrow interpretation of “business and property” advocated by the defendants, based upon analogy to numerous cited cases of antitrust law, has been rejected by the Supreme Court.
Rice,
Other courts have allowed recovery for lost wages outside the “personal injury”
*234
context.
See, e.g., Shearin v. E.F. Hutton Group, Inc.,
d. RICO Limitations In Other Circuits
Defendants’ support their position by reference to the holdings in some other circuits which have not allowed the pecuniary losses due to “personal injuries.”
See, e.g., Bast v. Cohen, Dunn & Sinclair, P.C.,
Defendants’ citation to
Bankers Trust Co. v. Rhoades
In
Grogan,
the court of appeals for the Eleventh Circuit recognized that there was “some merit” in allowing the pecuniary costs of personal injuries to be recovered under RICO.
See Grogan
The courts reasoning in
Grogan
is not controlling. The pecuniary and non-pecuniary aspects of tort claims are not “intertwined” in a way that prevents the courts from treating the two sets of claims differ
*235
ently. Subrogation, where pecuniary claims of subrogees are often separated from non-pecuniary claims of subrogors, is one example of how the two types of claims are distinguished by courts and treated separately.
See, e.g., Arkwright-Boston Mfrs. Mut. Ins. Co. v. City of New York,
Under federal law, subrogees and subrogors are allowed to pursue their claims in separate actions.
See, e.g., Virginia Elec. & Power Co. v. Westinghouse Elec. Corp.,
As the example provided by subrogation suggests, there is no conceptual or practical difficulty in separating the “intertwined” pecuniary and non-pecuniary aspects of personal injury claims. See also, e.g., N.Y. C.P.L.R. 4111(d), (e) & (f) (New York juries, including those trying cases in federal courts applying New York substantive law, are required to itemize verdicts separating items of pecuniary and “non-pecuniary,” including pain and suffering, damages). It would be inappropriate to frustrate the policies of RICO on the theory that the two types of claims — pecuniary and non-pecuniary—are “indivisible.”
In
Genty,
The fact that alternative state law remedies may exist for victims of personal injury caused by racketeering is not a disposi-tive factor in the interpretation of the statute. There are alternative remedies for every injury caused by the predicate acts of racketeers. A victim whose window or arm was broken by racketeering has a number of alternative tort claims from which to choose. The purpose of RICO was to superimpose another layer *236 of remedies in order to deter racketeering. As the statute’s preface states, RICO is designed to “seek the eradication of organized crime in the United States ... by providing enhanced sanctions and new remedies.” Pub.L. No. 91-452, § 1, 84 Stat. 922, 928 (1970) (emphasis added).
Similar attempts to limit RICO on the theory that it was not intended to supplant traditional remedies have been rejected by the Supreme Court. In
Sedima, S.P.R.L. v. Imrex Co.,
The Supreme Court rejected the court of appeal’s reasoning as contradictory to the plain meaning of the statute. It pointed out that, “RICO was an aggressive initiative to supplement old remedies and develop new methods for fighting crime.”
Sedima,
The court of appeal’s effort to limit RICO’s standing provision in
Sedima
was also motivated in part by the court’s fear of the effect of expansion of the statute into new areas.
See Sedima,
The Supreme Court criticized the attempt to limit the statute’s scope when such a limitation contradicted the statute’s language and policies. It stated:
Though sharing the doubts of the Court of Appeals about this increasing divergence, we cannot agree with either its diagnosis or its remedy. The “extraordinary” uses to which civil RICO has been put appear to be primarily the result of the breadth of the predicate offenses, in particular the inclusion of wire, mail, and securities fraud, and the failure of Congress and the courts to develop a meaningful concept of “pattern.” We do not believe that the amorphous standing requirement imposed by the Second Circuit effectively responds to these problems, or that it is a form of statutory amendment appropriately undertaken by the courts.
Sedima,
Similarly, in
Scheidler
the Supreme Court rejected efforts by the lower courts to reign in RICO by engrafting a requirement that the racketeering injury be “motivated by an economic purpose.”
Scheidler,
As in Sedima and Scheidler, the exclusion of an entire class of pecuniary losses in the present litigation from the statute’s reach would contravene the comprehensive Congressional scheme, contradict the most natural reading of the statute’s language, and result in the underenforcement of the statute’s policies. The interpretations of *237 RICO relied upon by defendants are reminiscent of earlier attempts to engraft artificial limitations upon the standing provisions of RICO. Attempts to handcuff RICO have been rejected by the Supreme Court since the statute’s plain language and legislative history call for a freer and more expansive interpretation.
e. Laborers Local 17
The defendants final argument is that the plaintiffs’ subrogated RICO claims should be denied based on a paragraph of dictum contained in Laborers Local 17. In Laborers Local 17, the court of appeals recognized that the union trust funds retained their right to bring claims as subro-gees notwithstanding the holding that their “direct” claims were barred. In contrast to the two instant cases, in Laborers Local 17 the position of the plaintiff trust funds was, for tactical purposes, that the smokers did not possess a RICO claim for the economic damages associated with the medical treatment of tobacco use. In dictum the court of appeals accepted the plaintiffs’ position, concurred in by defendants for arguments sake, as a correct statement of law:
The Funds correctly note that these RICO causes of action could not be asserted by the smokers or by the Funds in a subrogation action because the RICO statute requires an injury to “business or property,” whereas the smokers’ injuries are personal in nature. ... The Funds may still bring a subrogation action to recover the medical costs paid out for the individual smokers.... Although these will not be RICO claims, they will remedy the harm done by defendants’ alleged misconduct.
Laborers Local 17,
Defendants suggest that this passage of dictum in Laborers Local 17 should be interpreted as a holding by the court of appeals for the Second Circuit that smokers do not possess a RICO claim for the economic damage resulting from the medical treatment of tobаcco use.
The argument is not persuasive. This circuit’s court of appeals has recently cautioned against placing too heavy reliance on judicial dictum:
The rationale for the principle that pre-clusive effect will be given only to those findings that are necessary to a prior judgment is that “a collateral issue, although it may be the subject of a finding, is less likely to receive close judicial attention and the parties may well have only limited incentive to litigate the issue fully since it is not determinative.”
United States v. Hussein,
The plaintiffs in Laborers Local 17 did not advance a subrogated claim in their pleadings. The plaintiffs never argued before the district court or the court of appeals that they possessed a subrogated RICO claim. To the contrary, as noted, they suggested, arguendo, that the smokers did not possess a RICO claim for their economic injuries. The court of appeals’ dictum appears to represent an assumption the court made for purposes of argument rather than an attempt to definitively state an important new rule of law on a complex and controversial issue without the benefit of adverse briefing, argument of counsel, or its own anаlysis. Such a leap to bind future parties actually litigating the issue for the first time would constitute an extraordinary and dangerous development in the common law process.
When both parties advocated the same view with respect to the pecuniary damages related to personal injuries, the
Blue Cross
memorandum accepted, in dictum, some of the views expressed in other circuits with respect to RICO claims for such injuries.
See Blue Cross,
In summary, the plaintiffs’ complaints in both Blue Cross and National Asbestos are sufficient to state a subrogated claim under federal RICO. According to the allegations, the plaintiffs qualify as subrogees of the smokers who have been injured economically as a result of the misconduct of the defendants. Plaintiffs have allegedly expended billions of dollars in the treatment of smoking related diseases. These payments were made as part of the plaintiffs’ legal obligations to them subrogors. Any challenges to the plaintiffs’ positions as proper subrogees raises factual issues best addressed at a later stage of these litigations. The factual allegations contained in the complaints are sufficient to state a cause of action under RICO.
See Blue Cross,
C. Aggregation Of Claims
Defendants objections to the plaintiffs’ “aggregation of claims” are misplaced at this stage of the litigation. As subrogees, the plaintiffs are real parties in interest who possess their own substantive rights.
See, e.g., United States v. Aetna Cas. & Surety Co.,
Defendants’ “aggregation” objections amount to an assertion that the plaintiffs’ pleadings do not demonstrate that they are entitled to the relief they request. In particular, defendants contend that plaintiffs have not alleged sufficient facts with respect to their subrogors, for example, the injuries each has suffered, the dates of each injury, and the brands of cigarettes each has smoked. These objections are more properly presented in the context of Federal Rules of Civil Procedure Rule 12(e) (motion for more definite statement) or Rule 8(a) (pleading claim for relief).
The federal rules of procedure employ liberal standards for pleading under Rule 8(a) (requiring “short and plain statement” showing party is entitled to relief). A party is not required to allege every particular and detail at the pleading stage. If defendants were correct, complaints in complicated and large cases such as this one would run into the thousands of pages. As the Second Circuit has explained:
*239 [S]uch pleading of the evidence is surely not required and is on the whole undesirable. It is a matter for the discovery process, not for allegations of detail in the complaint. The complaint should not be burdened with possibly hundreds of specific instances; and if it were, it would be comparatively meaningless at trial where the parties could adduce further pertinent evidence if discovered. They can hardly know all their evidence, down to the last detail, long in advance of trial.
Nagler v. Admiral Corp., 248
F.2d 319 (2d Cir.1957);
see also Conley v. Gibson,
The 205 page complaint in Blue Cross and the 87 page complaint in National Asbestos have set out sufficient facts, including detañed aUegations with respect to the defendants’ conduct, to give defendants “fair notice” of the plaintiffs’ claims. The discovery process and Rule 16 conferences' can be expected to identify further elements of both parties’ claims.
Defendants aptly point out that plaintiffs face substantial difficulties in establishing numerous aspects of their claims, for example, issues related to causation. That fact, however, is not sufficient reason for dismissing the claims at the pleading stage.
Defendants’ suggestion that the plaintiffs’ claims should be dismissed because the plaintiffs “intend” to utilize improper and “unconstitutional” methods of statisticаl analysis to prove elements of their case is not a proper argument for a motion addressed to the pleadings. Whether plaintiffs will be allowed to use statistical methods of proof, and if so in what contexts, is an issue that can only be determined during and after the discovery process. The defendants’ argument that plaintiffs wül not be able to prove all their claims without recourse to “unconstitutional” means is no reason for striking, with prejudice, all the plaintiffs’ claims or for attempting to winnow those claims without the benefits of discovery. Plaintiffs have alleged sufficient facts in their complaint to establish that, if proven, they are entitled to some relief. The appropriate time to determine how much relief they may be entitled to is after discovery reveals how many, if any, of their allegations they can prove.
The flexibility in structuring the litigation provided by the Federal Rules of Civü Procedure wül help ensure that the rights of all parties wül be protected throughout the litigation. See, e.g., Letter dated September 2, 1999 to magistrate judge by attorney for plaintiff suggesting “staged” discovery and trial.
D. State Claims
So much effort has already been invested in these сases that it is prudent to exercise supplemental jurisdiction over the state law claims in Blue Cross pursuant to section 1367 of title 28. The validity of the Blues’ state law claims remain unaddressed by Laborers Local 17. These state law claims provide an independent basis for this court’s retention of jurisdiction over Blue Cross. The case was filed in this court more than sixteen months ago. After more than a full year of discovery and motion practice, considerations of efficiency and fairness dictate that the parties be allowed to continue their closely related suits in this court.
The viability of state law claims has not been fully briefed. Discovery on all claims — federal and state — appears at this pleading stage to be essentially the same.
*240 IV. CONCLUSION
The motions to dismiss the amended complaints in Blue Cross and National Asbestos are denied. Discovery is to proceed under the close supervision of the magistrate judge with every effort made to limit the costs and to utilize materials already available from sources in the many tobacco litigations in state and federal courts. Both the magistrate judge and the district judge will entertain suggestions for effectively structuring the litigation.