Steven Wodka v. Causeway Capital Management , 433 F. App'x 563 ( 2011 )

FILED
NOT FOR PUBLICATION MAY 16 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
STEVEN H. WODKA, individually, No. 09-56733
derivatively and on behalf of all others
similarly situated, D.C. No. 2:09-cv-02625-R-RC
Plaintiff - Appellant,
MEMORANDUM *
v.
CAUSEWAY CAPITAL
MANAGEMENT LLC; SARAH H.
KETTERER; HARRY W. HARTFORD;
JAMES A. DOYLE; JONATHAN P.
ENG; KEVIN DURKIN; TURNER
SWAN; GRACIE V. FERMELIA; MARK
CONE; JOHN A. G. GAVIN; ERIC H.
SUSSMAN; CAUSEWAY CAPITAL
MANAGEMENT TRUST, Nominal
Defendant, DBA Causeway International
Value Fund,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding
Argued and Submitted May 2, 2011
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
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Before: SILVERMAN, TALLMAN, and CLIFTON, Circuit Judges.
Steven Wodka appeals the district court’s dismissal of his claims under the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. We
have jurisdiction pursuant to 28 U.S.C. § 1291. We review de novo the district
court’s dismissal for failure to state a claim pursuant to Federal Rule of Civil
Procedure 12(b)(6), see Williamson v. Gen. Dynamics Corp., 208 F.3d 1144, 1149
(9th Cir. 2000), and we affirm.
To state a civil RICO claim, a plaintiff must show “that a RICO predicate
offense ‘not only was a “but for” cause of his injury, but was the proximate cause
as well.’” Hemi Group, LLC v. City of New York, — U.S. —, 130 S. Ct. 983, 989
(2010) (quoting Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258, 268 (1992)).
“When a court evaluates a RICO claim for proximate causation, the central
question it must ask is whether the alleged violation led directly to the plaintiff’s
injuries.” Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 461 (2006) (emphasis
added). There must be “‘a direct causal connection’ between the predicate wrong
and the harm.” Hemi Group, 130 S. Ct. at 994 (quoting Anza, 547 U.S. at 460).
“A link that is ‘too remote,’ ‘purely contingent,’ or ‘indirec[t]’ is insufficient.” Id.
at 989 (quoting Holmes, 503 U.S. at 271, 274).
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Applying these principles, we hold that the district court correctly dismissed
Wodka’s claims for lack of proximate causation under RICO. The decline in the
value of Wodka’s shares of the Causeway International Value Fund was not the
direct result of the defendants’ alleged ownership and financing of illegal gambling
operations. Rather, Wodka’s losses were directly caused by a series of intervening
actions undertaken by independent, third party actors during the summer and fall of
2006, including the passage of the Unlawful Internet Gambling Enforcement Act
of 2006, 31 U.S.C. § 5361 et seq., several law enforcement actions taken against
two other Internet-based gambling companies, PartyGaming’s withdrawal from the
U.S. market, and various decisions made by investors to sell off their shares of
PartyGaming and NETeller stock. Given all of these factors, we conclude that the
cause of Wodka’s asserted harm was “a set of actions . . . entirely distinct from the
alleged RICO violation” and thus too attenuated for RICO purposes. See Anza,
547 U.S. at 458; see also Hemi Group, 130 S. Ct. at 990; cf. Bridge v. Phoenix
Bond & Indem. Co., 553 U.S. 639, 658-59 (2008).
Because Wodka fails to allege facts sufficient to establish a direct causal
connection between his injury and the defendants’ alleged racketeering activities,
we affirm the district court’s Rule 12(b)(6) dismissal. We need not reach the
alternative grounds for affirmance offered by the defendants, including the
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question whether the defendants’ purchases of PartyGaming and NETeller stocks
constitute RICO predicate acts.
AFFIRMED.