An oil and gas developer and it's outside law firm were sued by disappointed investors. The plaintiffs alleged RICO violations, securities fraud and various state law claims against all defendants. The plaintiff also alleged legal malpractice claims against the law firm. We represented the law firm.

The plaintiffs first sued in federal district court, where the federal claims were dismissed. On appeal, the Seventh Circuit affirmed. Steve Novack orally argued the appeal for all defendants. In a precedent-setting and widely applicable opinion, the Seventh Circuit adopted the "loss causation" rule for RICO and securities fraud cases. It then found that the plaintiffs' losses were caused not by anything the defendants did, but, rather, by worldwide oil and gas market conditions. The Supreme Court denied the plaintiffs' request to review this decision.

The plaintiffs then re-filed their state law claims in state court. Those claims were dismissed and the plaintiffs appealed again, this time to the Illinois Appellate Court. In an appeal argued by Steve Novack, the Court affirmed the dismissal, primarily on "loss causation" grounds. The Illinois Supreme Court then denied the plaintiffs' Petition for Leave to Appeal.