Summary judgment may be granted only where "there is no genuine issue as to any material fact" and a party is "entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). Although the movant bears the initial burden of showing that there are no genuine issues of material fact, once such a showing is made, the party opposing a properly supported motion must "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, 477 U.S. 242, 256, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). To establish a genuine issue of fact, the party opposing summary judgment must "do more than simply show that there is some metaphysical doubt as to the material facts"; it must come forward with "specific facts showing that there is a genuine issue for trial." Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986) (quoting Rule 56(e)). Absent such a showing, summary judgment is appropriate since "a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).
Despite the broad language of the civil action provisions of the Racketeer Influenced and Corrupt Organizations Act ("RICO") § 1964(c), 18 U.S.C. § 1964 (c), and the Clayton Act § 4, 15 U.S.C. § 15(a), after which § 1964(c) is modeled, Supreme Court precedents make clear that Congress intended to limit standing in civil actions under both provisions to those plaintiffs who can establish the common law requisite of proximate cause. Holmes v. Securities Investor Protection Corp., 117 L. Ed. 2d 532, 112 S. Ct. 1311, 1317-1318 (1992); Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 535, 74 L. Ed. 2d 723, 103 S. Ct. 897 (1983); Blue Shield of Virginia v. McCready, 457 U.S. 465, 476-78, 73 L. Ed. 2d 149, 102 S. Ct. 2540 (1982). It is Anaren's complete failure of proof concerning this essential element that requires this Court to grant summary judgment.
To establish proximate cause, a plaintiff must show an adequate nexus between the alleged violation and the alleged harm to the plaintiff. An injury that derives from harm suffered by another is insufficient. See Holmes, supra, 112 S. Ct. at 1318; see also TV Signal Co. of Aberdeen v. American Telephone & Telegraph, 617 F.2d 1302, 1306-07 (8th Cir. 1980) (quoting Sanitary Milk Producers v. Bergjans Farm Dairy, Inc., 368 F.2d 679, 689 (8th Cir. 1966) (holding that a plaintiff's injury must be "something more than remote, . . . not derivative but direct, . . . and the proximate result of [the defendant's] misdoing.")).
In Holmes, the plaintiff, Securities Investor Protection Corp. ("SIPC"), alleged that the defendant had conspired in a stock-manipulation scheme that disabled two broker-dealers from meeting obligations to customers. This failure to meet obligations triggered SIPC's statutory duty to advance funds to reimburse the customers. The Supreme Court held that SIPC could not recover from the defendant under RICO, even as a subrogee standing in the shoes of the customers, because "the link is too remote between the stock manipulation alleged and the customers' harm, being purely contingent on the harm suffered by the broker-dealers." Holmes, supra, 112 S. Ct. at 1319. Anaren's Amended Complaint suffers from the same infirmity.
Similarly, in this case no rational jury could conclude that Anaren's alleged lost subcontract profits are not merely derivative of the prime contractor Litton's injuries. See Holmes, supra, 112 S. Ct. at 1318; see also Manson v. Stacescu, 11 F.3d 1127, 1132 (2d Cir. 1993) (an "employee's injury generally is derivative of that of the corporation and does not satisfy RICO's proximate cause requirement."). Loral has allegedly injured Anaren only insofar as the procurement fraud first injured Litton and thus left Litton without a contract on its ALR-74 for which to hire any subcontractor. Indeed, the Amended Complaint itself alleges that its injury "arose from Litton's failure to be awarded the RWR contract." See Amended Complaint PP 40, 50, 60, 64, 68. The derivative nature of Anaren's injury is made especially evident by the fact that it was Litton's decision to compromise its injury in the fashion described above which effectively precluded Anaren from participating in the contract at issue.
It follows that Anaren's argument that, as a virtually guaranteed subcontractor on any ALR-74 contract Litton procured, Anaren stood in the shoes of Litton as a competitor with Loral is unsupportable because "a plaintiff who complained of harm flowing merely from the misfortunes visited upon a third person by the defendant's acts was generally said to stand at too remote a distance to recover." Holmes, supra, 112 S. Ct. at 1318. In sum, because Anaren's claims are merely derivative of Litton's rights, no rational jury could conclude that Loral's alleged procurement fraud was the proximate cause of Anaren's lost profits.
Anaren's reliance on McCready, supra, 457 U.S. at 465, and Standardbred Owners Ass'n v. Roosevelt Raceway Assocs., 985 F.2d 102 (2d Cir. 1993) is misplaced because in both those cases the Supreme Court and the Second Circuit, respectively, found that the injury to those plaintiffs was not derivative or based upon the injury to anyone else. See McCready, supra, 457 U.S. at 476-78;
Standardbred Owners, supra, 985 F.2d at 104 ("Plaintiffs . . . are not making a claim that is derivative of injury, if any, sustained by the IDA."). Here, Anaren admits that its injury arose from Litton's, and therefore these cases are factually inapposite.
Accordingly, Anaren's complete failure of proof on an essential element of both its antitrust and RICO claims entitles the defendant to summary judgment in its favor as a matter of law. See Celotex v. Catrett, supra, 477 U.S. at 323. Finally, because the defendants' motion is dispositive of all federal claims, plaintiff's pendent state law claims also can and should be dismissed without prejudice for lack of subject matter jurisdiction. See United Mine Workers of America v. Gibbs, 383 U.S. 715, 726, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966).
For the reasons stated above, defendants' motion for summary judgment shall be and hereby is granted. The Clerk of Court is directed to close the above-captioned action.
It is SO ORDERED.
Dated: New York, New York
June 15, 1994
John E. Sprizzo
United States District Judge