United States

A health care provider and insurer brought an action against several major tobacco manufacturers for fraud under the Racketeer Influenced and Corrupt Organizations Act (RICO). In particular, plaintiffs claimed that the defendant tobacco companies' denial that smoking caused disease led to an increase in the health care costs of the plaintiffs' subscribers, and ultimately, of the plaintiffs themselves. The plaintiffs therefore sought recovery of their healthcare expenditures. The defendants argued that the plaintiffs did not suffer economic harm because they "passed on" higher costs to their subscribers in the form of higher premiums. The plaintiffs requested that the Court exclude such evidence as unrelated to RICO actions. The Court found that the plaintiffs could seek recovery of health care costs and that the evidence related to "[passing] on" costs was appropriate to examine.