UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ASSOCIATION OF WASHINGTON
PUBLIC HOSPITAL DISTRICTS, a
Washington unincorporated
association; ADAMS COUNTY PUBLIC
HOSPITAL DISTRICT NO. 2; ADAMS
COUNTY PUBLIC HOSPITAL DISTRICT
NO. 3; AFFILIATED HEALTH
SERVICES, a general partnership of
Skagit County Public Hospital
District No. 1 and Skagit &
Whatcom Counties Public Hospital
District No. 304; CHELAN COUNTY
PUBLIC HOSPITAL DISTRICT NO. 2;
CLALLAM COUNTY PUBLIC HOSPITAL
No. 00-35117
DISTRICT NO. 1; CLALLAM COUNTY
PUBLIC HOSPITAL DISTRICT NO. 2; D.C. No.
DOUGLAS, GRANT, LINCOLN, CV-98-01675-TSZ
OKANOGAN COUNTIES PUBLIC
OPINION
HOSPITAL DISTRICT NO. 6; FERRY
COUNTY PUBLIC HOSPITAL DISTRICT
NO. 1, GARFIELD COUNTY PUBLIC
HOSPITAL DISTRICT; GRANT COUNTY
PUBLIC HOSPITAL DISTRICT NO. 1;
GRANT COUNTY PUBLIC HOSPITAL
DISTRICT NO. 2; GRANT COUNTY
PUBLIC HOSPITAL DISTRICT NO. 3;
GRAYS HARBOR COUNTY PUBLIC
HOSPITAL DISTRICT NO. 1;
JEFFERSON COUNTY PUBLIC HOSPITAL
DISTRICT NO. 2; KENNEWICK PUBLIC
HOSPITAL DISTRICT; KING COUNTY
PUBLIC HOSPITAL DISTRICT NO. 1;
2375
KING COUNTY PUBLIC HOSPITAL
DISTRICT NO. 2; KITTITAS COUNTY
PUBLIC HOSPITAL DISTRICT NO. 1;
LEWIS COUNTY PUBLIC HOSPITAL
DISTRICT NO. 1; MASON COUNTY
PUBLIC HOSPITAL DISTRICT NO. 1;
OKANOGAN AND DOUGLAS COUNTIES
PUBLIC HOSPITAL DISTRICT NO. 1;
OKANOGAN COUNTY PUBLIC
HOSPITAL DISTRICT NO. 3;
OKANOGAN COUNTY PUBLIC
HOSPITAL DISTRICT NO. 4; PACIFIC
COUNTY PUBLIC HOSPITAL DISTRICT
NO. 2; PACIFIC COUNTY PUBLIC
HOSPITAL DISTRICT NO. 3; PEND
OREILLE COUNTY PUBLIC HOSPITAL
DISTRICT NO. 1; PROSSER PUBLIC
HOSPITAL DISTRICT; SKAGIT COUNTY
PUBLIC HOSPITAL DISTRICT NO. 1;
SKAGIT COUNTY PUBLIC HOSPITAL
DISTRICT NO. 2; SKAGIT AND
WHATCOM COUNTIES PUBLIC
HOSPITAL DISTRICT NO. 304;
SNOHOMISH COUNTY PUBLIC
HOSPITAL DISTRICT NO. 1;
SNOHOMISH COUNTY PUBLIC
HOSPITAL DISTRICT NO. 2;
SNOHOMISH COUNTY PUBLIC
HOSPITAL DISTRICT NO. 3; WHITMAN
COUNTY PUBLIC HOSPITAL DISTRICT
NO. 1-A; WHITMAN COUNTY PUBLIC
HOSPITAL DISTRICT NO. 3,
Plaintiffs-Appellants,
v.
2376
PHILIP MORRIS INCORPORATED; RJ
REYNOLDS TOBACCO COMPANY;
BROWN & WILLIAMSON TOBACCO
CORPORATION; BRITISH AMERICAN
TOBACCO PLC; B.A.T. INDUSTRIES
PLC; BRITISH AMERICAN TOBACCO
INVESTEMENTS LIMITED, formerly
known as British-American
Tobacco Company Limited;
LORILLARD TOBACCO COMPANY;
LIGGETT GROUP, INC.; LIGGETT &
MYERS, INC.; UNITED STATES
TOBACCO COMPANY; THE TOBACCO
INSTITUTE, INC.; THE COUNCIL FOR
TOBACCO RESEARCH - USA, INC.;
SMOKELESS TOBACCO COUNCIL, INC.;
HILL & KNOWLTON, INC.; UNKNOWN
CORPORATIONS A-Z,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
Thomas S. Zilly, District Judge, Presiding
Argued and Submitted
December 14, 2000--San Francisco, California
Filed February 22, 2001
Before: Robert Boochever, Diarmuid F. O'Scannlain, and
A. Wallace Tashima, Circuit Judges.
Opinion by Judge O'Scannlain
_________________________________________________________________
2377
COUNSEL
Michael K. Vaska (argued), Bradley J. Berg, Steven G. Jones,
and Chryssa V. Deliganis, Foster Pepper & Shefelman PLLC,
Seattle, Washington, for the plaintiffs-appellants.
2381
Herbert M. Wachtell (argued), Wachtell, Lipton, Rosen &
Katz, New York, New York, and John W. Phillips, Leonard
J. Feldman, and Judith H. Ramseyer, Heller Ehrman White &
McAuliffe LLP, Seattle, Washington, for defendant-appellee
Philip Morris Incorporated; Bradley S. Keller, Byrnes & Kel-
ler, LLP, Seattle, Washington, and H. Joseph Escher, III and
Peter J. Busch, Howard Rice Nemerovski Canady Falk &
Rabkin, San Francisco, California, for defendant-appellee R.J.
Reynolds Tobacco; John A. Tondini, Byrnes & Keller, LLP,
Seattle, Washington, and Jeffrey Davidson and Tony L. Rich-
ardson, Kirkland & Ellis, Los Angeles, California, for
defendant-appellee Brown & Williamson Tobacco Corp.;
Christopher W. Tompkins, Betts Patterson & Mines, P.S.,
Seattle, Washington, and Jeffrey S. Nelson and Tina M.
Schaefer, Shook, Hardy & Bacon L.L.P., Kansas City, Mis-
souri, for defendant-appellee Lorillard Tobacco Company;
Thomas R. Merrick, Bullivant, Houser, Pendergrass & Hoff-
man, Seattle, Washington, for defendant-appellee British-
American Tobacco Co., Ltd.; Delber D. Miller and Heidi
Bateman, Miller Bateman LLP, Seattle, Washington, for
defendant-appellee United States Tobacco Company; John D.
Wilson and David M. Jacobi, Wilson Smith Cochran & Dick-
erson, Seattle, Washington, for defendant-appellee Smokeless
Tobacco Council, Inc.; James R. Murray and Franklin D. Cor-
dell, Gordon Murray Tilden, Seattle, Washington, for
defendant-appellee The Tobacco Institute, Inc.; James H. Jor-
dan, Jr., Miller, Nash, Wiener, Hager & Carlsen, Seattle,
Washington, for defendant-appellee The Council for Tobacco
Research - U.S.A., Inc.; Thomas J. Brewer and Steven T.
Seward, Wickwire, Green, Crosby, Brewer & Seward, Seattle,
Washington, for defendant-appellee Hill & Knowlton, Inc.
_________________________________________________________________
OPINION
O'SCANNLAIN, Circuit Judge:
We must decide whether public hospital districts may bring
federal and state claims against tobacco firms to recover their
2382
unreimbursed costs for treating patients suffering from
tobacco-related illnesses.
I
The Association of Washington Public Hospital Districts,
along with the Association's individual member districts (col-
lectively, "Hospital Districts"), appeal from the district
court's dismissal of their federal antitrust, Racketeer Influ-
enced and Corrupt Organizations Act ("RICO"), and supple-
mental state law claims against a number of tobacco
companies and tobacco industry organizations (collectively,
"Tobacco Firms"). The Hospital Districts are political subdi-
visions of the State of Washington which are required by state
and federal law to provide health care services to the general
public regardless of their patients' ability to pay.
The Hospital Districts allege that the Tobacco Firms have
engaged in a half-century conspiracy against the public gener-
ally and the health care industry in particular. According to
the Hospital Districts, the Tobacco Firms have conspired to
misrepresent and to conceal the addictive nature of nicotine
and the health risks associated with tobacco use, promoting
their alleged deception through propaganda disguised as inde-
pendent scientific research while endeavoring to suppress
legitimate scientific research that demonstrates the dangers of
tobacco use. The Hospital Districts further claim that the
Tobacco Firms have conspired to suppress competition to
develop less harmful nicotine and tobacco products and have
manipulated the levels of nicotine in their products to ensure
continuing addiction. Finally, the Tobacco Firms have alleg-
edly conspired to refrain from making any claims concerning
the relative health superiority of specific tobacco products.
According to the Hospital Districts, the Tobacco Firms'
unlawful conduct has caused them considerable financial
harm. But for the Tobacco Firms' conspiracy to suppress
competition, they allege, less harmful tobacco products would
2383
have been developed which would have garnered a substantial
market share. The Hospital Districts maintain that they them-
selves were potential consumers of such products, as they
could have purchased them for the use and treatment of their
patients suffering from nicotine addiction. Patients who used
these less harmful products presumably would have experi-
enced fewer tobacco-related health illnesses, thereby reducing
the Hospital Districts' costs for treating such illnesses. Fur-
ther, the Tobacco Firms' alleged conspiracy to spread misin-
formation regarding the adverse health effects of tobacco use,
the addictive nature of nicotine, and the Tobacco Firms' own
manipulation of nicotine levels allegedly prevented the Hospi-
tal Districts from instituting more effective smoking cessation
programs. Such misinformation also induced the Hospital
Districts' patients to use tobacco products. Thus, but for the
Tobacco Firms' alleged conspiracy to deceive the public, the
Hospital Districts could have assisted more patients to over-
come their addiction to nicotine products, again reducing their
costs for treating tobacco-related illnesses.
The Hospital Districts commenced this action against the
Tobacco Firms to recover their increased costs for treating
their patients' tobacco-related illnesses caused by the Tobacco
Firms' unlawful conduct, alleging federal antitrust and RICO
violations; state common law claims for fraudulent misrepre-
sentation, fraudulent concealment, breach of special duty,
unjust enrichment, civil conspiracy, and public nuisance; and
violations of the Washington Unfair Business Practices Act--
Consumer Protection Act, Wash. Rev. Code Ann.
SS 19.86.020-030. In a carefully reasoned decision, the dis-
trict court dismissed all claims with prejudice for failure to
state a claim, relying on Oregon Laborers-Employers Health
& Welfare Trust Fund v. Philip Morris Inc., 185 F.3d 957
(9th Cir. 1999). The court held that the Hospital Districts did
not have antitrust or RICO standing because their claimed
damages were not proximately caused by the Tobacco Firms'
unlawful conduct, but were instead derivative of the personal
injuries of smokers afflicted by tobacco-related illnesses.
2384
Ass'n of Wash. Pub. Hosp. Dists. v. Philip Morris, Inc., 79 F.
Supp. 2d 1219, 1224 (W.D. Wash. 1999). The court also held
that the Hospital Districts' antitrust claims were barred for
lack of antitrust injury under Am. Ad Mgmt Inc. v. GTE of
Cal., 190 F.3d 1051, 1057 (9th Cir. 2000), because the Hospi-
tal Districts did not experience their injuries in the market
where competition was being restrained. Ass'n of Wash. Pub.
Hosp. Dists., 79 F. Supp. 2d at 1226. Finally, the district court
dismissed the Hospital Districts' state common law claims for
lack of proximate cause, id. at 1228-29, and dismissed their
Consumer Protection Act claims under Wash. State Physi-
cians Ins. Exch. & Ass'n. v. Fisons Corp., 858 P.2d 1054,
1060-61 (Wash. 1993), for failure to allege an injury to "busi-
ness or property," Ass'n of Wash. Pub. Hosp. Dists., 79 F.
Supp. 2d at 1229. This appeal followed.
II
We must first decide whether the district court erred in dis-
missing the Hospital Districts' federal antitrust and RICO
claims.
A
[1] Section 4 of the Clayton Act provides that "any person
who shall be injured in his business or property by reason of
anything forbidden in the antitrust laws" may bring a private
damages suit. 15 U.S.C. S 15. Similarly, 18 U.S.C. S 1964(c)
provides that "[a]ny person injured in his business or property
by reason of a violation of section 1962," the substantive pro-
visions of RICO, may bring a private damages suit. 18 U.S.C.
S 1964(c). Nonetheless, the courts have recognized that pri-
vate antitrust and RICO actions are subject to traditional "ju-
dicial tools to limit a person's responsibility for the
consequences of that person's own acts." Holmes v. Sec.
Investor Prot. Corp., 503 U.S. 258, 268 (1992). Among these
limitations is the requirement that the alleged violations of the
law be the "proximate cause" of the injury suffered. Id.
2385
(RICO); Blue Shield v. McCready, 457 U.S. 465, 477 (1982)
(antitrust).
[2] A direct relationship between the injury and the alleged
wrongdoing has been one of the "central elements " of the
proximate causation determination, and "a plaintiff who com-
plained of harm flowing merely from the misfortunes visited
upon a third person by the defendant's acts [ ] generally [has
been] said to stand at too remote a distance to recover." Ore-
gon Laborers, 185 F.3d at 963 (quoting Holmes, 503 U.S. at
268-69 (internal citations omitted)). To determine whether an
injury is "too remote" to allow recovery under both the anti-
trust laws and RICO, a three-factor test is applied:"(1)
whether there are more direct victims of the alleged wrongful
conduct who can be counted on to vindicate the law as private
attorneys general; (2) whether it will be difficult to ascertain
the amount of the plaintiff's damages attributable to defen-
dant's wrongful conduct; and (3) whether the courts will have
to adopt complicated rules apportioning damages to obviate
the risk of multiple recoveries." Id. (citing Holmes, 503 U.S.
at 269-70, and Associated Gen. Contractors of Cal., Inc. v.
Cal. State Council of Carpenters ("AGC "), 459 U.S. 519, 545
(1983)).
In Oregon Laborers, we considered the antitrust and RICO
proximate cause requirement in the tobacco litigation context.
There, five union health and welfare trust funds that provide
health care benefits to their beneficiaries brought suit against
various tobacco firms, alleging federal antitrust and RICO
violations as well as state common law and statutory claims.
The trusts' complaint was predicated on the same conspiracy
allegations as are at issue here. Id. at 961. Like the Hospital
Districts, the trusts sought to recover their increased expendi-
tures for treatment of their beneficiaries' tobacco-related ill-
nesses that allegedly resulted from the tobacco defendants'
wrongdoing. Id. at 962.
We held that the trusts' claims failed as a matter of law. We
explained that the trusts lacked both antitrust and RICO stand-
2386
ing, as they could not establish that their injuries were proxi-
mately caused by the tobacco defendants' wrongdoing. Id. at
963-66. We observed that the trusts' injuries were entirely
derivative in nature, for "without any injury to smokers, plain-
tiffs would not have incurred the additional expenses in pay-
ing for the medical expenses of those smokers." Id. at 963.
Thus, there was no "direct link" between the defendants'
alleged wrongdoing and the trusts' damages, and the proxi-
mate cause requirement was not met. Id. at 964.
We then applied the three-factor AGC/Holmes proximate
cause test. We held that the first factor weighed against the
trusts because there existed more directly injured victims, in
the form of the smokers themselves, who would be motivated
to punish the defendants for their wrongdoing. Id. We recog-
nized that such directly injured victims could not bring suit
under RICO or the antitrust laws, given that they suffered per-
sonal injuries rather than the requisite "injury to business or
property." Id. Nonetheless, we rejected the trusts' argument
that this weighed in favor of standing. Although smokers
could not vindicate the public interest in antitrust enforce-
ment, they could bring other claims to deter the defendants'
wrongdoing. Id. Next, we observed that the trusts' damages
were entirely speculative in nature, as they would involve
proof, ultimately, of how smokers themselves would have
changed their behavior in the absence of the defendants'
wrongdoing. Id. at 965. We remarked that"[t]he difficulty of
ascertaining the damages attributable to defendants' alleged
wrongful conduct and the complexity involved in calculating
these damages weigh heavily, if not dispositively, in favor of
barring plaintiffs' actions." Id. Finally, we noted that there
was the potential for duplicative recovery given the possibility
that smokers might bring suit against the defendants for their
personal injuries under state law theories. Id. at 966.
2387
B
All other Courts of Appeals that have addressed the issue
have agreed that union trust funds lack standing to bring anti-
trust and RICO claims against the tobacco industry to recover
their increased expenditures for treating tobacco-related ill-
nesses.1 The fact that the Hospital Districts are health care
providers rather than third party health care payers like the
union trusts in Oregon Laborers is immaterial for purposes of
RICO and antitrust standing. The ratio decidendi of Oregon
Laborers and the union health trust cases from our sister cir-
cuits is fatal to the Hospital Districts' claims.
[3] Like the union trust funds in Oregon Laborers, the Hos-
pital Districts are attempting to recover damages that are
derivative of the injuries suffered by smokers. The district
court properly noted that "[w]ithout any injury to smokers,
plaintiffs would not have incurred the additional expenses in
paying for the medical expenses of those smokers. " Ass'n of
Wash. Pub. Hosp. Districts, 79 F. Supp. 2d at 1224. Thus,
there is no direct link between the alleged misconduct of the
Tobacco Firms and the Hospital Districts' claimed damages.
[4] As we did in Oregon Laborers , the district court exam-
ined the Hospital Districts' claims according to the proximate
cause factors set forth in AGC and Holmes: the directness of
the injury, the speculative nature of the harm, and the risk of
duplicative recovery and complexity of apportioning dam-
ages. Id. at 1224-25. The court correctly concluded that each
of these factors weighs strongly against according the Hospi-
tal Districts antitrust and RICO standing. Id. at 1224-26,
_________________________________________________________________
1 See United Food & Commercial Workers v. Philip Morris, Inc., 223
F.3d 1271 (11th Cir. 2000); Texas Carpenters Health Benefit Fund v.
Philip Morris, Inc., 199 F.3d 788 (5th Cir. 2000); Int'l Bhd. of Teamsters
v. Philip Morris, Inc., 196 F.3d 818 (7th Cir. 1999); Steamfitters Local
Union No. 420 Welfare Fund v. Philip Morris, Inc. , 171 F.3d 912 (3d Cir.
1999); Laborers Local 17 v. Philip Morris, Inc. , 191 F.3d 229 (2d Cir.
1999).
2388
1227. Smokers are the "more direct victims" who can vindi-
cate the public interest in deterring the Tobacco Firms'
wrongful conduct. See Oregon Laborers, 185 F.3d at 964.
The difficulty of ascertaining the Hospital Districts' damages
attributable to such wrongful conduct is just as great here as
it was in Oregon Laborers. Calculation of the Hospital Dis-
tricts' damages would entail considerable speculation regard-
ing how individuals' tobacco usage would have changed in
the event that accurate information and less harmful tobacco
products were available. See id. at 965. Finally, the same
potential for duplicative recovery is present given the possi-
bility that smokers themselves could bring state law claims
against the Tobacco Firms to recover for their personal injuries.2
See id. at 966.
C
The Hospital Districts offer several possible bases on which
to distinguish Oregon Laborers. The common theme underly-
ing the Hospital Districts' contentions is that looser RICO and
antitrust standing rules apply to health providers due to their
special relationship with their patients, a relationship that
third party payers such as union health trusts lack. 3 The differ-
_________________________________________________________________
2 The Hospital Districts contend that the risk of duplicative recovery
here is greatly reduced because, under the terms of the Master Settlement
Agreement between certain states, including Washington, and the tobacco
industry, any recovery by the Hospital Districts would be offset by a cor-
responding reduction in Washington's award under the Master Settlement
Agreement. Assuming, arguendo, that this is accurate, it has no bearing on
the possibility of duplicative recovery in the event that individual smokers
who have been patients of the Hospital Districts bring suit against the
Tobacco Firms. In fact, it was the possibility of claims by injured smokers,
rather than state governments, that led us in Oregon Laborers to hold that
the second AGC/Holmes factor weighed in favor of the tobacco defen-
dants. Oregon Laborers, 185 F.3d at 966.
3 The Hospital Districts also submit that they should have standing
because, as political subdivisions of the state, they are possessed of certain
attributes of sovereignty. Nevertheless, they do not, and in fact could not,
2389
ences between health care providers and third party payers,
however, do nothing to remedy the fundamental defect with
the Hospital Districts' claims: they are attempting to recover
for harm that is derivative of personal injuries visited upon
their patients. Their claims are just as remote, and would
occasion the same unfounded speculation concerning dam-
ages, as the union trusts' claims in Oregon Laborers. Thus,
the Hospital Districts' attempts to distinguish Oregon Labor-
ers are unavailing.
The Hospital Districts cite McCready, 457 U.S. 465, as
establishing a special rule of antitrust standing for health care
providers. The Hospital Districts are incorrect. In McCready,
a group health plan subscriber brought an antitrust suit against
the plan, alleging that it conspired with psychiatrists to
restrain competition in the psychotherapy market. Id. at 467.
The plan reimbursed its subscribers for psychotherapy treat-
ment provided by psychiatrists, but not psychologists. The
plaintiff received unreimbursed treatment from a psycholo-
gist. Id. While recognizing that the conspiracy was targeted at
psychologists rather than plan subscribers, the Court neverthe-
less held that the plaintiff had antitrust standing, explaining
that "[d]enying reimbursement to subscribers for the cost of
treatment was the very means by which it is alleged that Blue
Shield sought to achieve its illegal ends." Id. at 479. The
Court further explained that the plaintiff's injury "was inextri-
cably intertwined with the injury the conspirators sought to
inflict on psychologists . . . ." Id. at 484.
McCready does not establish a special standing rule for
health care providers, as the Hospital Districts would read it,
_________________________________________________________________
insist that any such quasi-sovereign status exempts them from the proxi-
mate cause requirement. Allegheny Gen. Hosp. v. Philip Morris, Inc., 228
F.3d 429, 436 (3d Cir. 2000) (public hospitals cannot invoke quasi-
governmental standing to sue tobacco companies on behalf of their non-
paying patients without regard to proximate cause).
2390
nor does it dispense with the general requirement that antitrust
and RICO plaintiffs must be directly harmed by the defen-
dant's wrongful conduct. As the Court subsequently explained
in AGC, in McCready "the actual plaintiff was directly
harmed by the defendants' unlawful conduct." AGC, 459 U.S.
at 529 n.19. She was denied reimbursement for her psycho-
therapy expenses. Her damages were not derivative of the
harm the conspirators inflicted upon psychologists. In fact, the
Court noted that McCready's psychologist was fully paid for
his services and was in no way injured by Blue Shield's
refusal to reimburse McCready for the cost of such services.
McCready, 457 U.S. at 475. Neither McCready nor any of the
other cases cited by the Hospital Districts provides any sup-
port for the Hospital Districts' attempt to recover for their
remote harm.4
[5] Similarly, the fact that the Hospital Districts allege that
they were potential purchasers of less harmful tobacco and
nicotine delivery products does not render their claims any
less remote. The harm suffered by the Hospital Districts as
potential purchasers of products whose development the
Tobacco Firms allegedly conspired to suppress is derivative
of the harm suffered by their patients, who were the potential
users of such products. Had such less harmful products been
available, the Hospital Districts' patients might have used
them, and in turn might have suffered from fewer tobacco-
related diseases, with the result that the Hospital Districts
might have incurred lower tobacco-related treatment costs.
This is the very essence of a derivative injury.
_________________________________________________________________
4 The Hospital Districts cite several other cases which purportedly rec-
ognize a special standing rule for health care providers. However, these
cases concern constitutional standing, not RICO or antitrust standing. See
NOW v. Scheidler, 510 U.S. 249, 255-56 (1994); Singleton v. Wulff, 428
U.S. 106, 113-18 (1976); Lee v. Oregon, 869 F. Supp. 1491, 1493-95 (D.
Or. 1994), vacated on other grounds by 107 F.3d 1382 (9th Cir. 1997).
Thus, they are inapposite.
2391
D
[6] The Hospital Districts' antitrust claims fail on a second,
independent ground: failure to allege an antitrust injury. An
"antitrust injury" is an injury of "the type that the antitrust
statute was intended to forestall." AGC, 459 U.S. at 540. "The
requirement that the alleged injury be related to anti-
competitive behavior requires, as a corollary, that the injured
party be a participant in the same market as the alleged male-
factors." Bhan v. NME Hosps., Inc., 772 F.2d 1467, 1470 (9th
Cir. 1985). Further, "[a]ntitrust injury requires the plaintiff to
have suffered its injury in the market where competition is
being restrained. Parties whose injuries, though flowing from
that which makes the defendant's conduct unlawful, are expe-
rienced in another market do not suffer antitrust injury." Am.
Ad Mgmt., Inc., 190 F.3d at 1057.
[7] Although the Hospital Districts allege that they are
potential participants in the nicotine delivery market, and this
is the market where competition allegedly has been restrained,
the district court ruled that they nonetheless failed to state an
antitrust injury. The court reasoned that the Hospital Districts'
injuries were not experienced in the nicotine delivery market,
but rather in the health care market. We agree. The essence
of the Hospital Districts' allegations is that the Tobacco
Firms' conspiracy to suppress the development of less harm-
ful tobacco products indirectly resulted in the Districts' incur-
ring increased health care expenses. These expenses simply
cannot be characterized as injuries that the Hospital Districts
experienced in the nicotine delivery market. See Serv.
Employees Int'l Union Health & Welfare Fund v. Philip Mor-
ris Inc., 83 F. Supp. 2d 70, 90 (D.D.C. 1999) (holding that
plaintiff union health trusts did not suffer an antitrust injury,
notwithstanding their claim to be potential purchasers of nico-
tine replacement products, because their asserted "infrastruc-
ture damages" "are not the type that would result from
anticompetitive activity in the nicotine products market
. . . .").
2392
[8] Accordingly, the district court properly dismissed the
Hospital Districts' federal RICO and antitrust claims.5
III
We must next decide whether the district court properly
dismissed the Hospital Districts' state law claims.
A
[9] The Hospital Districts brought suit against the Tobacco
Firms under the Washington Consumer Protection Act
("CPA"), Wash. Rev. Code Ann. SS 19.86.0206 and 19.86.030.7
The CPA provides a cause of action to "[a]ny person who is
injured in his or her business or property by a violation of" the
substantive provisions of the CPA. Wash. Rev. Code Ann.
S 19.86.090; Wash. State Physicians Ins. Exch. & Ass'n. v.
Fisons Corp., 858 P.2d 1054, 1060 (Wash. 1993). Expenses
for personal injuries are not injuries to business or property
under the CPA. Id. at 1064.
[10] The district court held that the Hospital Districts failed
to meet such "business or property" requirement because their
claimed injuries were predicated on personal injuries to smok-
ers. Ass'n of Wash. Pub. Hosp. Dists., 79 F. Supp. 2d at 1229.
The district court observed that smokers themselves could not
recover their own smoking-related medical expenses under
the CPA; accordingly, the mere fact that a third party pays for
_________________________________________________________________
5 We note, finally, that while the Hospital Districts, unlike the union
trusts, apparently cannot avail themselves of a contract-based subrogation
right to bring suit against the Tobacco Firms, this is irrelevant to the ques-
tion of whether their antitrust and RICO claims fail for remoteness.
6 Wash. Rev. Code Ann. S 19.86.020 provides, "[u]nfair methods of
competition and unfair or deceptive acts or practices in the conduct of any
trade or commerce are hereby declared unlawful."
7 Wash. Rev. Code Ann. S provides, "[e]very contract, combination, in
the form of trust or otherwise, or conspiracy in restraint of trade or com-
merce is hereby declared unlawful."
2393
their medical treatment should not transform such medical
expenses into business or property harm recoverable under the
CPA. Id.
We came to the same conclusion in Oregon Laborers,
where we held that union trusts could not recover their
expenses incurred to treat tobacco-related illnesses under Ore-
gon's Unfair Trade Practices Act ("UTPA"), Or. Rev. Stat.
S 646.638(1). Like the Washington CPA, "any person who
suffers any ascertainable loss of money or property, real or
personal, as a result" of the substantive provisions of the
UTPA has standing to bring suit under the Oregon statute. Or.
Rev. Stat. S 646.638(1). Again like the Washington CPA, the
Oregon UTPA does not permit recovery for personal injuries.
Gross-Haentjens v. Leckenby, 589 P.2d 1209, 1210-11 (Or.
Ct. App. 1979) ("[W]e hold that ORS 646.638 of the Oregon
Unlawful Trade Practices Act was not intended by the legisla-
ture to create such a new cause of action for personal inju-
ries."). In rejecting the union trusts' claims under the UTPA,
we observed that "[p]laintiffs' damages--expenses to treat
smokers' personal injuries--are clearly predicated upon `per-
sonal injury' and are therefore unrecoverable under the
UPTA." Oregon Laborers, 185 F.3d at 968. 8
In light of the similarity between the Washington and Ore-
gon consumer protection statutes, we hold that Oregon Labor-
ers bars the Hospital Districts' CPA claim to recover for their
unreimbursed expenses treating their patients' smoking-
related illnesses.
_________________________________________________________________
8 Nor does Fisons Corp. require a different result. In Fisons Corp., the
Supreme Court of Washington held that a physician could recover under
the Washington Consumer Protection Act for damages he suffered result-
ing from a drug manufacturer's failure to warn him of the known dangers
of a drug he prescribed to a patient. Fisons Corp., 858 P.2d at 1061. The
physician in Fisons Corp. did not seek to recover for his expenses incurred
in treating the patient who was harmed by the drug, but rather sought to
recover for the injury to his reputation occasioned by the misprescription.
Id. at 1061, 1063. Fisons Corp. thus provides no support for the Hospital
Districts.
2394
[11] The Hospital Districts' CPA claim fails as a matter of
law for the additional reason that, as discussed above, the
Tobacco Firms' unlawful conduct was not the proximate
cause of the Hospital Districts' injuries. Proximate cause is an
element of a claim under the CPA. Fisons Corp. , 858 P.2d at
1062. The Washington courts are directed to interpret the
CPA in light of federal court decisions interpreting federal
antitrust law. Wash. Rev. Code Ann. S 19.86.920; Fisons
Corp., 858 P.2d at 1064. Further, "any departure from federal
law . . . must be for a reason rooted in [Washington] statutes
or case law and not in general policy arguments that th[e]
court would weigh if the issue came before [it ] as matter of
first impression." Blewett v. Abbott Labs. , 938 P.2d 842, 846
(Wash. Ct. App. 1997), review denied, 950 P.2d 475 (Wash.
1998). The Hospital Districts have failed to point to any rea-
son "rooted in state statutes or case law" that would support
our departure from federal antitrust proximate cause princi-
ples when analyzing the proximate cause requirement under
the CPA.
Accordingly, we affirm the district court's dismissal of the
Hospital Districts' CPA claim.
B
[12] Finally, we must consider whether the district court
properly dismissed the Hospital Districts' Washington state
common law claims. Only the Hospital Districts' fraudulent
concealment, fraudulent misrepresentation, and nuisance
claims are before us.9 Proximate cause is an element of each
of these claims under Washington law. Amtruck Factors, Div.
of Truck Sales, Inc. v. Int'l Forest Prods., 795 P.2d 742, 746
(Wash. Ct. App. 1990) (observing that proximate cause is an
essential element of a fraud claim under Washington law);
_________________________________________________________________
9 The Hospital Districts have failed to brief the district court's dismissal
of their unjust enrichment, breach of special duty, and conspiracy claims.
These claims are thus waived.
2395
DeYoung v. Cenex Ltd., 1 P.3d 587, 590 (Wash. Ct. App.
2000) (recognizing that proximate cause is an element of a
nuisance claim). Washington courts have defined proximate
cause in a manner consistent with the common law "direct-
ness" requirement, as a cause "which, in a direct sequence
unbroken by any new independent cause, produces the injury
complained of, and without which such injury would not have
happened." Fisher v. Parkview Props., Inc. , 859 P.2d 77, 82
(Wash. Ct. App. 1993) (citing Alger v. Mukilteo , 730 P.2d
1333, 1336 (Wash. 1987); Hartley v. State, 698 P.2d 77, 83
(Wash. 1985)) (emphasis added).
[13] The Hospital Districts' common law claims thus fail
for the same reasons that their federal antitrust and RICO
claims failed: the Tobacco Firms' unlawful conduct was not
the proximate cause of their injuries. The proximate cause test
for federal antitrust and RICO standing is the common law
proximate cause test. AGC, 459 U.S. at 531; Holmes, 503
U.S. at 268-69; Laborers Local 17 v. Philip Morris, Inc., 191
F.3d 229, 234 (2d Cir. 1999) ("To determine in a given case
whether proximate cause is present [for purposes of RICO
claims], common law principles are applied."). Accordingly,
the district court correctly dismissed the Hospital Districts'
fraudulent concealment, fraudulent misrepresentation and nui-
sance claims. Oregon Laborers, 185 F.3d at 968 ("[F]or the
same reasons that proximate cause did not exist for plaintiffs'
RICO and antitrust claims, proximate cause is lacking for
their fraud claim"). See also Steamfitters Local Union No. 420
Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 934-35 (3d
Cir. 1999) ("The same principles that lead us to conclude that
plaintiffs' antitrust and RICO claims were properly dismissed
lead to the inevitable conclusion that their state law claims
must also fail . . . . Just as we have found the link between
defendants' alleged fraud--providing false information
regarding the safety of their products--and plaintiffs' alleged
injuries too attenuated to support a RICO claim, we also find
the link too remote to support a common-law fraud claim.");
Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429,
2396
445-46 (3d Cir. 2000) (dismissing state claims based on the
"same principles that lead us to conclude that plaintiffs' anti-
trust and RICO claims were properly dismissed": lack of
proximate cause).
IV
For the foregoing reasons, the judgment of the district court
is
AFFIRMED.10
_________________________________________________________________
10 Defendants-Appellees' Motion to File Appendix of Unpublished
Opinions is DENIED.
2397