(Slip Opinion) OCTOBER TERM, 2007 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
BRIDGE ET AL. v. PHOENIX BOND & INDEMNITY CO.
ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE SEVENTH CIRCUIT
No. 07–210. Argued April 14, 2008—Decided June 9, 2008
Each year the Cook County Treasurer’s Office holds a public auction to
sell its tax liens on delinquent taxpayers’ property. To prevent any
one buyer from obtaining a disproportionate share of the liens, the
county adopted the “Single, Simultaneous Bidder Rule” (Rule), which
requires each buyer to submit bids in its own name, prohibits a buyer
from using “apparent agents, employees, or related entities” to sub-
mit simultaneous bids for the same parcel, and requires a registered
bidder to submit a sworn affidavit affirming its compliance with the
Rule. Petitioners and respondents regularly participate in the tax
sales. Respondents filed suit, alleging that petitioners fraudulently
obtained a disproportionate share of liens by filing false compliance
attestations. As relevant here, they claim that petitioners violated
and conspired to violate the Racketeer Influenced and Corrupt Or-
ganizations Act (RICO) through a pattern of racketeering activity in-
volving mail fraud, which occurred when petitioners sent property
owners various notices required by Illinois law. The District Court
dismissed the RICO claims for lack of standing, finding that respon-
dents were not protected by the mail fraud statute because they did
not receive the alleged misrepresentations. Reversing, the Seventh
Circuit based standing on the injury respondents suffered when they
lost the chance to obtain more liens, and found that respondents had
sufficiently alleged proximate cause because they were immediately
injured by petitioners’ scheme. The court also rejected petitioners’
argument that respondents are not entitled to relief under RICO be-
cause they had not received, and therefore had not relied on, any
false statements.
Held: A plaintiff asserting a RICO claim predicated on mail fraud need
2 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Syllabus
not show, either as an element of its claim or as a prerequisite to es-
tablishing proximate causation, that it relied on the defendant’s al-
leged misrepresentations. Pp. 6–21.
(a) In 18 U. S. C. §1964(c), RICO provides a private right of action
for treble damages to “[a]ny person injured in his business or prop-
erty by reason of a violation,” as pertinent here, of §1962(c), which
makes it “unlawful for any person employed by or associated with” a
qualifying enterprise “to conduct or participate . . . in the conduct of
such enterprise’s affairs through a pattern of racketeering activity,”
including “mail fraud,” §1961(1)(B). Mail fraud, in turn, occurs
whenever a person, “having devised or intending to devise any
scheme or artifice to defraud,” uses the mail “for the purpose of exe-
cuting such scheme or artifice.” §1341. The gravamen of the offense
is the scheme to defraud, and any “ ‘mailing . . . incident to an essen-
tial part of the scheme’ . . . satisfies the mailing element,” Schmuck v.
United States, 489 U. S. 705, 712, even if the mailing “contain[s] no
false information,” id., at 715. Once the relationship among these
statutory provisions is understood, respondents’ theory of the case is
straightforward. Petitioners nonetheless argue that because the al-
leged pattern of racketeering activity is predicated on mail fraud, re-
spondents must show that they relied on petitioners’ fraudulent mis-
representations, which they cannot do because the
misrepresentations were made to the county. Nothing on the stat-
ute’s face imposes such a requirement. Using the mail to execute or
attempt to execute a scheme to defraud is indictable as mail fraud,
and hence a predicate racketeering act under RICO, even if no one re-
lied on any misrepresentation, see Neder v. United States, 527 U. S.
1, 24–25; and one can conduct the affairs of a qualifying enterprise
through a pattern of such acts without anyone relying on a fraudu-
lent misrepresentation. Thus, no reliance showing is required to es-
tablish that a person has violated §1962(c) by conducting an enter-
prise’s affairs through a pattern of racketeering activity predicated
on mail fraud. Nor can a first-party reliance requirement be derived
from §1964(c), which, by providing a right of action to “[a]ny person”
injured by a violation of §1962, suggests a breadth of coverage not
easily reconciled with an implicit first-party reliance requirement.
Moreover, a person can be injured “by reason of” a pattern of mail
fraud even if he has not relied on any misrepresentations. For exam-
ple, accepting respondents’ allegations as true, they were harmed by
petitioners’ scheme when they lost valuable liens they otherwise
would have been awarded. Pp. 6–10.
(b) None of petitioners’ arguments—that under the “common-law
meaning” rule, Congress should be presumed to have made reliance
an element of a civil RICO claim predicated on a violation of the mail
Cite as: 553 U. S. ____ (2008) 3
Syllabus
fraud statute; that a plaintiff bringing a RICO claim based on mail
fraud must show reliance on the defendant’s misrepresentations in
order to establish proximate cause; and that RICO should be inter-
preted to require first-party reliance for fraud-based claims in order
to avoid the “overfederalization” of traditional state-law claims—
persuades this Court to read a first-party reliance requirement into a
statute that by its terms suggests none. Pp. 10–21.
477 F. 3d 928, affirmed.
THOMAS, J., delivered the opinion for a unanimous Court.
Cite as: 553 U. S. ____ (2008) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 07–210
_________________
JOHN BRIDGE, ET AL., PETITIONERS v. PHOENIX
BOND & INDEMNITY CO. ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE SEVENTH CIRCUIT
[June 9, 2008]
JUSTICE THOMAS delivered the opinion of the Court.
The Racketeer Influenced and Corrupt Organizations
Act (RICO or Act), 18 U. S. C. §§1961–1968, provides a
private right of action for treble damages to “[a]ny person
injured in his business or property by reason of a viola-
tion” of the Act’s criminal prohibitions. §1964(c). The
question presented in this case is whether a plaintiff
asserting a RICO claim predicated on mail fraud must
plead and prove that it relied on the defendant’s alleged
misrepresentations. Because we agree with the Court of
Appeals that a showing of first-party reliance is not re-
quired, we affirm.
I
Each year the Cook County, Illinois, Treasurer’s Office
holds a public auction at which it sells tax liens it has
acquired on the property of delinquent taxpayers.1 Pro-
——————
1 Because this case arises from the District Court’s grant of petition-
ers’ motion to dismiss, we “accept as true all of the factual allegations
contained in [respondents’] complaint.” Erickson v. Pardus, 551 U. S.
___, ___ (2007) (per curiam) (slip op., at 5).
2 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Opinion of the Court
spective buyers bid on the liens, but not in cash amounts.
Instead, the bids are stated as percentage penalties the
property owner must pay the winning bidder in order to
clear the lien. The bidder willing to accept the lowest
penalty wins the auction and obtains the right to purchase
the lien in exchange for paying the outstanding taxes on
the property. The property owner may then redeem the
property by paying the lienholder the delinquent taxes,
plus the penalty established at the auction and an addi-
tional 12% penalty on any taxes subsequently paid by the
lienholder. If the property owner does not redeem the
property within the statutory redemption period, the
lienholder may obtain a tax deed for the property, thereby
in effect purchasing the property for the value of the de-
linquent taxes.
Because property acquired in this manner can often be
sold at a significant profit over the amount paid for the
lien, the auctions are marked by stiff competition. As a
result, most parcels attract multiple bidders willing to
accept the lowest penalty permissible—0%, that is to say,
no penalty at all. (Perhaps to prevent the perverse incen-
tive taxpayers would have if they could redeem their
property from a winning bidder for less than the amount
of their unpaid taxes, the county does not accept negative
bids.) The lower limit of 0% creates a problem: Who wins
when the bidding results in a tie? The county’s solution is
to allocate parcels “on a rotational basis” in order to en-
sure that liens are apportioned fairly among 0% bidders.
App. 18.
But this creates a perverse incentive of its own: Bidders
who, in addition to bidding themselves, send agents to bid
on their behalf will obtain a disproportionate share of
liens. To prevent this kind of manipulation, the county
adopted the “Single, Simultaneous Bidder Rule,” which
requires each “tax buying entity” to submit bids in its own
name and prohibits it from using “apparent agents, em-
Cite as: 553 U. S. ____ (2008) 3
Opinion of the Court
ployees, or related entities” to submit simultaneous bids
for the same parcel.2 App. 67. Upon registering for an
auction, each bidder must submit a sworn affidavit affirm-
ing that it complies with the Single, Simultaneous Bidder
Rule.
Petitioners and respondents are regular participants in
Cook County’s tax sales. In July 2005, respondents filed a
complaint in the United States District Court for the
Northern District of Illinois, contending that petitioners
had fraudulently obtained a disproportionate share of
liens by violating the Single, Simultaneous Bidder Rule at
the auctions held from 2002 to 2005. According to respon-
dents, petitioner Sabre Group, LLC, and its principal
Barrett Rochman arranged for related firms to bid on
Sabre Group’s behalf and directed them to file false attes-
tations that they complied with the Single, Simultaneous
Bidder Rule. Having thus fraudulently obtained the
opportunity to participate in the auction, the related firms
collusively bid on the same properties at a 0% rate. As a
result, when the county allocated liens on a rotating ba-
sis,3 it treated the related firms as independent entities,
——————
2 The Single, Simultaneous Bidder Rule provides that “one tax buying
entity (principal) may not have its/his/her/their actual or apparent
agents, employees, or related entities, directly or indirectly register
under multiple registrations for the intended or perceived purpose of
having more than one person bidding at the tax sale at the same time
for the intended or perceived purpose of increasing the principal’s
likelihood of obtaining a successful bid on a parcel.” App. 67. The rule
defines “Related Bidding Entity” as “any individual, corporation,
partnership, joint venture, limited liability company, business organi-
zation, or other entity that has a shareholder, partner, principal,
officer, general partner or other person or entity having an ownership
interest in common with, or contractual relationship with, any other
registrant.” Ibid. It further provides that “[t]he determination of
whether registered entities are related, so as to prevent the entities
from bidding at the same time, is in the sole and exclusive discretion of
the Cook County Treasurer or her designated representatives.” Ibid.
3 Respondents’ complaint does not elaborate on the county’s rotational
4 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Opinion of the Court
allowing them collectively to acquire a greater number of
liens than would have been granted to a single bidder
acting alone. The related firms then purchased the liens
and transferred the certificates of purchase to Sabre
Group. In this way, respondents allege, petitioners de-
prived them and other bidders of their fair share of liens
and the attendant financial benefits.
Respondents’ complaint contains five counts. Counts I–
IV allege that petitioners violated and conspired to violate
RICO by conducting their affairs through a pattern of
racketeering activity involving numerous acts of mail
fraud. In support of their allegations of mail fraud, re-
spondents assert that petitioners “mailed or caused to be
mailed hundreds of mailings in furtherance of the
scheme,” App. 49, when they sent property owners various
notices required by Illinois law. Count V alleges a state-
law claim of tortious interference with prospective busi-
ness advantage.
On petitioners’ motion, the District Court dismissed
respondents’ RICO claims for lack of standing. It observed
that “[o]nly [respondents] and other competing buyers, as
opposed to the Treasurer or the property owners, would
——————
system. The Court of Appeals described it as follows: “If X bids 0% on
ten parcels, and each parcel attracts five bids at that penalty rate, then
the County awards X two of the ten parcels. Winners share according
to the ratio of their bids to other identical bids.” 477 F. 3d 928, 929
(CA7 2007). Petitioners object that this description is not supported by
the record and inappropriately “inject[s] into the case an element of
mathematical certainty that is missing from the complaint itself.”
Reply Brief for Petitioners 20. While a precise understanding of the
county’s system may be necessary to calculate respondents’ damages,
nothing in our disposition turns on this issue. For present purposes, it
suffices that respondents allege they “suffered the loss of property
related to the liens they would have been able to acquire, and the
profits flowing therefrom, had [petitioners] not implemented their
scheme and acquired liens in excess of their appropriate share through
their violation of the County Rule.” App. 50.
Cite as: 553 U. S. ____ (2008) 5
Opinion of the Court
suffer a financial loss from a scheme to violate the Single,
Simultaneous Bidder Rule.” App. to Pet. for Cert. 17a.
But it concluded that respondents “are not in the class of
individuals protected by the mail fraud statute, and there-
fore are not within the ‘zone of interests’ that the RICO
statute protects,” because they “were not recipients of the
alleged misrepresentations and, at best were indirect
victims of the alleged fraud.” Id., at 18a. The District
Court declined to exercise supplemental jurisdiction over
respondents’ tortious-interference claim and dismissed it
without prejudice.
The Court of Appeals for the Seventh Circuit reversed.
It first concluded that “[s]tanding is not a problem in this
suit” because plaintiffs suffered a “real injury” when they
lost the valuable chance to acquire more liens, and be-
cause “that injury can be redressed by damages.” 477
F. 3d 928, 930 (2007). The Court of Appeals next con-
cluded that respondents had sufficiently alleged proximate
cause under Holmes v. Securities Investor Protection Cor-
poration, 503 U. S. 258 (1992), and Anza v. Ideal Steel
Supply Corp., 547 U. S. 451 (2006), because they (along
with other losing bidders) were “immediately injured” by
petitioners’ scheme. 477 F. 3d, at 930–932. Finally, the
Court of Appeals rejected petitioners’ argument that re-
spondents are not entitled to relief under RICO because
they did not receive, and therefore did not rely on, any
false statements: “A scheme that injures D by making
false statements through the mail to E is mail fraud, and
actionable by D through RICO if the injury is not deriva-
tive of someone else’s.” Id., at 932.
With respect to this last holding, the Court of Appeals
acknowledged that courts have taken conflicting views.
By its count, “[t]hree other circuits that have considered
this question agree . . . that the direct victim may recover
through RICO whether or not it is the direct recipient of
the false statements,” ibid. (citing Mid Atlantic Telecom,
6 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Opinion of the Court
Inc. v. Long Distance Servs., Inc., 18 F. 3d 260, 263–264
(CA4 1994); Systems Management, Inc. v. Loiselle, 303
F. 3d 100, 103–104 (CA1 2002); Ideal Steel Supply Corp. v.
Anza, 373 F. 3d 251, 263 (CA2 2004)), whereas two Cir-
cuits hold that the plaintiff must show that it in fact relied
on the defendant’s misrepresentations, 477 F. 3d, at 932
(citing VanDenBroeck v. CommonPoint Mortgage Co., 210
F. 3d 696, 701 (CA6 2000); Sikes v. Teleline, Inc., 281 F. 3d
1350, 1360–1361 (CA11 2002)). Compare also Sandwich
Chef of Texas, Inc. v. Reliance Nat’l Indemnity Ins. Co.,
319 F. 3d 205, 223 (CA5 2003) (recognizing “a narrow
exception to the requirement that the plaintiff prove direct
reliance on the defendant’s fraudulent predicate act . . .
when the plaintiff can demonstrate injury as a direct and
contemporaneous result of a fraud committed against a
third party”), with Appletree Square I, L. P. v. W. R. Grace
& Co., 29 F. 3d 1283, 1286–1287 (CA8 1994) (requiring the
plaintiff to show that it detrimentally relied on the defen-
dant’s misrepresentations).
We granted certiorari, 552 U. S. ___ (2008), to resolve
the conflict among the Courts of Appeals on “the substan-
tial question,” Anza, 547 U. S., at 461, whether first-party
reliance is an element of a civil RICO claim predicated on
mail fraud.4
II
We begin by setting forth the applicable statutory provi-
sions. RICO’s private right of action is contained in 18
U. S. C. §1964(c), which provides in relevant part that
——————
4 TheCourt considered a civil RICO claim predicated on mail fraud in
its recent decision in Anza, 547 U. S. 451. There the Court held that
proximate cause is a condition of recovery under 18 U. S. C. §1962(c).
The Court did not address the question whether reliance by the plain-
tiff is a required element of a RICO claim, the matter now before us.
Cf. 547 U. S., at 475–478 (THOMAS, J., concurring in part and dissenting
in part) (reaching the question and concluding that reliance is not an
element of a civil RICO claim based on mail fraud).
Cite as: 553 U. S. ____ (2008) 7
Opinion of the Court
“[a]ny person injured in his business or property by reason
of a violation of section 1962 of this chapter may sue there-
for in any appropriate United States district court and
shall recover threefold the damages he sustains and the
cost of the suit, including a reasonable attorney’s fee.”
Section 1962 contains RICO’s criminal prohibitions.
Pertinent here is §1962(c), which makes it “unlawful for
any person employed by or associated with” an enterprise
engaged in or affecting interstate or foreign commerce “to
conduct or participate, directly or indirectly, in the con-
duct of such enterprise’s affairs through a pattern of rack-
eteering activity.” The term “racketeering activity” is
defined to include a host of so-called predicate acts, includ-
ing “any act which is indictable under . . . section 1341
(relating to mail fraud).” §1961(1)(B).
The upshot is that RICO provides a private right of
action for treble damages to any person injured in his
business or property by reason of the conduct of a qualify-
ing enterprise’s affairs through a pattern of acts indictable
as mail fraud. Mail fraud, in turn, occurs whenever a
person, “having devised or intending to devise any scheme
or artifice to defraud,” uses the mail “for the purpose of
executing such scheme or artifice or attempting so to do.”
§1341. The gravamen of the offense is the scheme to
defraud, and any “mailing that is incident to an essential
part of the scheme satisfies the mailing element,”
Schmuck v. United States, 489 U. S. 705, 712 (1989) (cita-
tion and internal quotation marks omitted), even if the
mailing itself “contain[s] no false information,” id., at 715.
Once the relationship among these statutory provisions
is understood, respondents’ theory of the case is straight-
forward. They allege that petitioners devised a scheme to
defraud when they agreed to submit false attestations of
compliance with the Single, Simultaneous Bidder Rule to
the county. In furtherance of this scheme, petitioners
used the mail on numerous occasions to send the requisite
8 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Opinion of the Court
notices to property owners. Each of these mailings was an
“act which is indictable” as mail fraud, and together they
constituted a “pattern of racketeering activity.” By con-
ducting the affairs of their enterprise through this pattern
of racketeering activity, petitioners violated §1962(c). As a
result, respondents lost the opportunity to acquire valu-
able liens. Accordingly, respondents were injured in their
business or property by reason of petitioners’ violation of
§1962(c), and RICO’s plain terms give them a private right
of action for treble damages.
Petitioners argue, however, that because the alleged
pattern of racketeering activity consisted of acts of mail
fraud, respondents must show that they relied on petition-
ers’ fraudulent misrepresentations. This they cannot do,
because the alleged misrepresentations—petitioners’
attestations of compliance with the Single, Simultaneous
Bidder Rule—were made to the county, not respondents.
The county may well have relied on petitioners’ misrepre-
sentations when it permitted them to participate in the
auction, but respondents, never having received the mis-
representations, could not have done so. Indeed, respon-
dents do not even allege that they relied on petitioners’
false attestations. Thus, petitioners submit, they fail to
state a claim under RICO.
If petitioners’ proposed requirement of first-party reli-
ance seems to come out of nowhere, there is a reason:
Nothing on the face of the relevant statutory provisions
imposes such a requirement. Using the mail to execute or
attempt to execute a scheme to defraud is indictable as
mail fraud, and hence a predicate act of racketeering
under RICO, even if no one relied on any misrepresenta-
tion. See Neder v. United States, 527 U. S. 1, 24–25 (1999)
(“The common-law requiremen[t] of ‘justifiable reliance’
. . . plainly ha[s] no place in the [mail, wire, or bank] fraud
statutes”). And one can conduct the affairs of a qualifying
enterprise through a pattern of such acts without anyone
Cite as: 553 U. S. ____ (2008) 9
Opinion of the Court
relying on a fraudulent misrepresentation.
It thus seems plain—and indeed petitioners do not
dispute—that no showing of reliance is required to estab-
lish that a person has violated §1962(c) by conducting the
affairs of an enterprise through a pattern of racketeering
activity consisting of acts of mail fraud. See Anza, 547
U. S., at 476 (THOMAS, J., concurring in part and dissent-
ing in part) (“Because an individual can commit an indict-
able act of mail or wire fraud even if no one relies on his
fraud, he can engage in a pattern of racketeering activity,
in violation of §1962, without proof of reliance”). If reli-
ance is required, then, it must be by virtue of §1964(c),
which provides the right of action. But it is difficult to
derive a first-party reliance requirement from §1964(c),
which states simply that “[a]ny person injured in his
business or property by reason of a violation of section
1962” may sue for treble damages. The statute provides a
right of action to “[a]ny person” injured by the violation,
suggesting a breadth of coverage not easily reconciled with
an implicit requirement that the plaintiff show reliance in
addition to injury in his business or property.
Moreover, a person can be injured “by reason of” a pat-
tern of mail fraud even if he has not relied on any misrep-
resentations. This is a case in point. Accepting their
allegations as true, respondents clearly were injured by
petitioners’ scheme: As a result of petitioners’ fraud, re-
spondents lost valuable liens they otherwise would have
been awarded. And this is true even though they did not
rely on petitioners’ false attestations of compliance with
the county’s rules. Or, to take another example, suppose
an enterprise that wants to get rid of rival businesses
mails misrepresentations about them to their customers
and suppliers, but not to the rivals themselves. If the
rival businesses lose money as a result of the misrepresen-
tations, it would certainly seem that they were injured in
their business “by reason of” a pattern of mail fraud, even
10 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Opinion of the Court
though they never received, and therefore never relied on,
the fraudulent mailings. Yet petitioners concede that, on
their reading of §1964(c), the rival businesses would have
no cause of action under RICO, Tr. of Oral Arg. 4, even
though they were the primary and intended victims of the
scheme to defraud.
Lacking textual support for this counterintuitive posi-
tion, petitioners rely instead on a combination of common-
law rules and policy arguments in an effort to show that
Congress should be presumed to have made first-party
reliance an element of a civil RICO claim based on mail
fraud. None of petitioners’ arguments persuades us to
read a first-party reliance requirement into a statute that
by its terms suggests none.
III
A
Petitioners first argue that RICO should be read to
incorporate a first-party reliance requirement in fraud
cases “under the rule that Congress intends to incorporate
the well-settled meaning of the common-law terms it
uses.” Neder, supra, at 23. It has long been settled, they
contend, that only the recipient of a fraudulent misrepre-
sentation may recover for common-law fraud, and that he
may do so “if, but only if . . . he relies on the misrepresen-
tation in acting or refraining from action.” Restatement
(Second) of Torts §537 (1977). Given this background rule
of common law, petitioners maintain, Congress should be
presumed to have adopted a first-party reliance require-
ment when it created a civil cause of action under RICO
for victims of mail fraud.
In support of this argument, petitioners point to our
decision in Beck v. Prupis, 529 U. S. 494 (2000). There, we
considered the scope of RICO’s private right of action for
violations of §1962(d), which makes it “unlawful for any
person to conspire to violate” RICO’s criminal prohibitions.
Cite as: 553 U. S. ____ (2008) 11
Opinion of the Court
The question presented was “whether a person injured by
an overt act in furtherance of a conspiracy may assert a
civil RICO conspiracy claim under §1964(c) for a violation
of §1962(d) even if the overt act does not constitute ‘rack-
eteering activity.’ ” Id., at 500. Answering this question in
the negative, we held that “injury caused by an overt act
that is not an act of racketeering or otherwise wrongful
under RICO is not sufficient to give rise to a cause of
action under §1964(c) for a violation of §1962(d).” Id., at
505 (citation omitted). In so doing, we “turn[ed] to the
well-established common law of civil conspiracy.” Id., at
500. Because it was “widely accepted” by the time of
RICO’s enactment “that a plaintiff could bring suit for civil
conspiracy only if he had been injured by an act that was
itself tortious,” id., at 501, we presumed “that when Con-
gress established in RICO a civil cause of action for a
person ‘injured . . . by reason of’ a ‘conspir[acy],’ it meant
to adopt these well-established common-law civil conspir-
acy principles.” Id., at 504 (quoting §§1964(c), 1962(d);
alterations in original). We specifically declined to rely on
the law of criminal conspiracy, relying instead on the law
of civil conspiracy:
“We have turned to the common law of criminal con-
spiracy to define what constitutes a violation of
§1962(d), see Salinas v. United States, 522 U. S. 52,
63–65 (1997), a mere violation being all that is neces-
sary for criminal liability. This case, however, does
not present simply the question of what constitutes a
violation of §1962(d), but rather the meaning of a civil
cause of action for private injury by reason of such a
violation. In other words, our task is to interpret
§§1964(c) and 1962(d) in conjunction, rather than
§1962(d) standing alone. The obvious source in the
common law for the combined meaning of these provi-
sions is the law of civil conspiracy.” Id., at 501, n. 6.
12 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Opinion of the Court
Petitioners argue that, as in Beck, we should look to the
common-law meaning of civil fraud in order to give content
to the civil cause of action §1964(c) provides for private
injury by reason of a violation of §1962(c) based on a pat-
tern of mail fraud. The analogy to Beck, however, is mis-
placed. The critical difference between Beck and this case
is that in §1962(d) Congress used a term—“conspir[acy]”—
that had a settled common-law meaning, whereas Con-
gress included no such term in §1962(c). Section 1962(c)
does not use the term “fraud”; nor does the operative
language of §1961(1)(B), which defines “racketeering
activity” to include “any act which is indictable under . . .
section 1341.” And the indictable act under §1341 is not
the fraudulent misrepresentation, but rather the use of
the mails with the purpose of executing or attempting to
execute a scheme to defraud. In short, the key term in
§1962(c)—“racketeering activity”—is a defined term, and
Congress defined the predicate act not as fraud simplic-
iter, but mail fraud—a statutory offense unknown to the
common law. In these circumstances, the presumption
that Congress intends to adopt the settled meaning of
common-law terms has little pull. Cf. Stoneridge Invest-
ment Partners, LLC v. Scientific-Atlanta, Inc., 552 U. S.
___, ___ (2008) (slip op., at 11) (rejecting the argument
that §10(b) of the Securities Exchange Act of 1934, 15
U. S. C. §78j(b), incorporates common-law fraud). There is
simply no “reason to believe that Congress would have
defined ‘racketeering activity’ to include acts indictable
under the mail and wire fraud statutes, if it intended
fraud-related acts to be predicate acts under RICO only
when those acts would have been actionable under the
common law.” Anza, 547 U. S., at 477–478 (THOMAS, J.,
concurring in part and dissenting in part).
Nor does it help petitioners’ cause that here, as in Beck,
the question is not simply “what constitutes a violation of
§1962[(c)], but rather the meaning of a civil cause of action
Cite as: 553 U. S. ____ (2008) 13
Opinion of the Court
for private injury by reason of such a violation.” 529 U. S.,
at 501, n. 6. To be sure, Beck held that a plaintiff cannot
state a civil claim for conspiracy under §1964(c) merely by
showing a violation of §1962(d) and a resulting injury.
But in so doing, Beck relied not only on the fact that the
term “conspiracy” had a settled common-law meaning, but
also on the well-established common-law understanding of
what it means to be injured by a conspiracy for purposes of
bringing a civil claim for damages. See id., at 501–504.
No comparable understanding exists with respect to injury
caused by an enterprise conducting its affairs through a
pattern of acts indictable as mail fraud. And even the
common-law understanding of injury caused by fraud does
not support petitioners’ argument. As discussed infra, at
16–17, the common law has long recognized that plaintiffs
can recover in a variety of circumstances where, as here,
their injuries result directly from the defendant’s fraudu-
lent misrepresentations to a third party.
For these reasons, we reject petitioners’ contention that
the “common-law meaning” rule dictates that reliance by
the plaintiff is an element of a civil RICO claim predicated
on a violation of the mail fraud statute. Congress chose to
make mail fraud, not common-law fraud, the predicate act
for a RICO violation. And “the mere fact that the predi-
cate acts underlying a particular RICO violation happen to
be fraud offenses does not mean that reliance, an element
of common-law fraud, is also incorporated as an element of
a civil RICO claim.” Anza, supra, at 476 (THOMAS, J.,
concurring in part and dissenting in part).
B
Petitioners next argue that even if Congress did not
make first-party reliance an element of a RICO claim
predicated on mail fraud, a plaintiff who brings such a
claim must show that it relied on the defendant’s misrep-
resentations in order to establish the requisite element of
14 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Opinion of the Court
causation. In Holmes, we recognized that §1964(c)’s “lan-
guage can, of course, be read to mean that a plaintiff is
injured ‘by reason of’ a RICO violation, and therefore may
recover, simply on showing that the defendant violated
§1962, the plaintiff was injured, and the defendant’s viola-
tion was a ‘but for’ cause of plaintiff’s injury.” 503 U. S., at
265–266 (footnote omitted). We nonetheless held that not
“all factually injured plaintiffs” may recover under
§1964(c). Id., at 266. Because Congress modeled §1964(c)
on other provisions that had been interpreted to “requir[e]
a showing that the defendant’s violation not only was a
‘but for’ cause of his injury, but was the proximate cause
as well,” we concluded that §1964(c) likewise requires the
plaintiff to establish proximate cause in order to show
injury “by reason of” a RICO violation. Id., at 268.
Proximate cause, we explained, is a flexible concept that
does not lend itself to “ ‘a black-letter rule that will dictate
the result in every case.’ ” Id., at 272, n. 20 (quoting Asso-
ciated Gen. Contractors of Cal., Inc. v. Carpenters, 459
U. S. 519, 536 (1983)). Instead, we “use[d] ‘proximate
cause’ to label generically the judicial tools used to limit a
person’s responsibility for the consequences of that per-
son’s own acts,” Holmes, 503 U. S., at 268, with a particu-
lar emphasis on the “demand for some direct relation
between the injury asserted and the injurious conduct
alleged,” ibid.; see also Anza, supra, at 461 (“When a court
evaluates a RICO claim for proximate causation, the
central question it must ask is whether the alleged viola-
tion led directly to the plaintiff’s injuries”). The direct-
relation requirement avoids the difficulties associated
with attempting “to ascertain the amount of a plaintiff’s
damages attributable to the violation, as distinct from
other, independent, factors,” Holmes, 503 U. S., at 269;
prevents courts from having “to adopt complicated rules of
apportioning damages among plaintiffs removed at differ-
ent levels of injury from the violative acts, to obviate the
Cite as: 553 U. S. ____ (2008) 15
Opinion of the Court
risk of multiple recoveries,” ibid.; and recognizes the fact
that “directly injured victims can generally be counted on
to vindicate the law as private attorneys general, without
any of the problems attendant upon suits by plaintiffs
injured more remotely,” id., at 269–270.5
Pointing to our reliance on common-law proximate-
causation principles in Holmes and Anza, petitioners
argue that “[u]nder well-settled common-law principles,
proximate cause is established for fraud claims only where
the plaintiff can demonstrate that he relied on the misrep-
resentation.” Brief for Petitioners 28. In support of this
argument, petitioners cite Restatement (Second) of Torts
§548A, which provides that “[a] fraudulent misrepresenta-
tion is a legal cause of a pecuniary loss resulting from
action or inaction in reliance upon it if, but only if, the loss
might reasonably be expected to result from the reliance.”
Thus, petitioners conclude, “a plaintiff asserting a civil
RICO claim predicated on mail fraud cannot satisfy the
proximate cause requirement unless he can establish that
his injuries resulted from his reliance on the defendant’s
fraudulent misrepresentation.” Brief for Petitioners 28.
Petitioners’ argument is twice flawed. First, as ex-
plained above, the predicate act here is not common-law
fraud, but mail fraud. Having rejected petitioners’ argu-
ment that reliance is an element of a civil RICO claim
based on mail fraud, we see no reason to let that argument
in through the back door by holding that the proximate-
——————
5 Applying these principles in Holmes, the Court held that the Securi-
ties Investor Protection Corporation (SIPC) could not recover for
injuries caused by a stock-manipulation scheme that prevented two
broker-dealers from meeting obligations to their customers, thereby
triggering SIPC’s duty to reimburse the customers. 503 U. S., at 270–
274. And in Anza, the Court applied the principles of Holmes to pre-
clude a company from recovering profits it allegedly lost when a rival
business was able to lower its prices because it failed to charge the
requisite sales tax on cash sales. 547 U. S., at 456–461.
16 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Opinion of the Court
cause analysis under RICO must precisely track the
proximate-cause analysis of a common-law fraud claim.
“Reliance is not a general limitation on civil recovery in
tort; it ‘is a specialized condition that happens to have
grown up with common law fraud.’ ” Anza, 547 U. S., at
477 (THOMAS, J., concurring in part and dissenting in
part) (quoting Systems Management, 303 F. 3d, at 104).
That “specialized condition,” whether characterized as an
element of the claim or as a prerequisite to establishing
proximate causation, simply has no place in a remedial
scheme keyed to the commission of mail fraud, a statutory
offense that is distinct from common-law fraud and that
does not require proof of reliance.
Second, while it may be that first-party reliance is an
element of a common-law fraud claim, there is no general
common-law principle holding that a fraudulent misrepre-
sentation can cause legal injury only to those who rely on
it. The Restatement provision cited by petitioners cer-
tainly does not support that proposition. It provides only
that the plaintiff’s loss must be a foreseeable result of
someone’s reliance on the misrepresentation.6 It does not
say that only those who rely on the misrepresentation can
suffer a legally cognizable injury. And any such notion
would be contradicted by the long line of cases in which
courts have permitted a plaintiff directly injured by a
fraudulent misrepresentation to recover even though it
was a third party, and not the plaintiff, who relied on the
——————
6 In addition to Restatement (Second) of Torts §548A (1977), petition-
ers cite Comment a to that section, which provides that “[c]ausation, in
relation to losses incurred by reason of a misrepresentation, is a matter
of the recipient’s reliance in fact upon the misrepresentation in taking
some action or in refraining from it.” Like §548A itself, however, the
comment does not support petitioners’ argument. Of course, a misrep-
resentation can cause harm only if a recipient of the misrepresentation
relies on it. But that does not mean that the only injuries proximately
caused by the misrepresentation are those suffered by the recipient.
Cite as: 553 U. S. ____ (2008) 17
Opinion of the Court
defendant’s misrepresentation.7 Indeed, so well estab-
lished is the defendant’s liability in such circumstances
that the Restatement (Second) of Torts sets forth as a
“[g]eneral [p]rinciple” that “[o]ne who intentionally causes
injury to another is subject to liability to the other for that
injury, if his conduct is generally culpable and not justifi-
able under the circumstances.” §870. As an illustration,
the Restatement provides the example of a defendant who
“seeks to promote his own interests by telling a known
falsehood to or about the plaintiff or his product.” Id.,
Comment h (emphasis added). And the Restatement
specifically recognizes “a cause of action” in favor of the
injured party where the defendant “defrauds another for
the purpose of causing pecuniary harm to a third person.”
Id., §435A, Comment a. Petitioners’ contention that
proximate cause has traditionally incorporated a first-
party reliance requirement for claims based on fraud
——————
7 Such cases include Rice v. Manley, 66 N. Y. 82 (1876) (permitting
plaintiffs who had arranged to buy a large quantity of cheese to recover
against a defendant who induced the vendor to sell him the cheese by
falsely representing to the vendor that plaintiffs no longer wished to
purchase it); and Gregory v. Brooks, 35 Conn. 437 (1868) (permitting
plaintiff wharf owner to recover against a defendant who, in order to
deprive plaintiff of business, misrepresented himself to be a superin-
tendent of wharves and ordered a vessel unloading at plaintiff’s wharf
to leave); see also Brief for Respondents 26–29 (collecting cases).
Petitioners argue that these cases are irrelevant because they
would be treated today as specialized torts, such as wrongful interfer-
ence with contractual relations, rather than as common-law fraud. See,
e.g., Restatement (Second) of Torts §767, Comment c (recognizing that
“one [may be] liable to another for intentional interference with eco-
nomic relations by inducing a third person by fraudulent misrepresen-
tation not to do business with the other”). But petitioners miss the
point. The cases are not cited as evidence that common-law fraud can
be established without showing first-party reliance. Rather, they—
along with the Restatement’s recognition of specialized torts based on
third-party reliance—show that a fraudulent misrepresentation can
proximately cause actionable injury even to those who do not rely on
the misrepresentation.
18 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Opinion of the Court
cannot be reconciled with these authorities.
Nor is first-party reliance necessary to ensure that there
is a sufficiently direct relationship between the defen-
dant’s wrongful conduct and the plaintiff’s injury to satisfy
the proximate-cause principles articulated in Holmes and
Anza. Again, this is a case in point. Respondents’ alleged
injury—the loss of valuable liens—is the direct result of
petitioners’ fraud. It was a foreseeable and natural conse-
quence of petitioners’ scheme to obtain more liens for
themselves that other bidders would obtain fewer liens.
And here, unlike in Holmes and Anza, there are no inde-
pendent factors that account for respondents’ injury, there
is no risk of duplicative recoveries by plaintiffs removed at
different levels of injury from the violation, and no more
immediate victim is better situated to sue. Indeed, both
the District Court and the Court of Appeals concluded that
respondents and other losing bidders were the only parties
injured by petitioners’ misrepresentations. App. to Pet. for
Cert. 17a; 477 F. 3d, at 931. Petitioners quibble with that
conclusion, asserting that the county would be injured too
if the taint of fraud deterred potential bidders from par-
ticipating in the auction. But that eventuality, in contrast
to respondents’ direct financial injury, seems speculative
and remote.
Of course, none of this is to say that a RICO plaintiff
who alleges injury “by reason of” a pattern of mail fraud
can prevail without showing that someone relied on the
defendant’s misrepresentations. Cf. Field v. Mans, 516
U. S. 59, 66 (1995) (“No one, of course, doubts that some
degree of reliance is required to satisfy the element of
causation inherent in the phrase ‘obtained by’ ” in 11
U. S. C. §523(a)(2)(A), which prohibits the discharge of
debts for money or property “obtained by” fraud). In most
cases, the plaintiff will not be able to establish even but-
for causation if no one relied on the misrepresentation. If,
for example, the county had not accepted petitioners’ false
Cite as: 553 U. S. ____ (2008) 19
Opinion of the Court
attestations of compliance with the Single, Simultaneous
Bidder Rule, and as a result had not permitted petitioners
to participate in the auction, respondents’ injury would
never have materialized. In addition, the complete ab-
sence of reliance may prevent the plaintiff from establish-
ing proximate cause. Thus, for example, if the county
knew petitioners’ attestations were false but nonetheless
permitted them to participate in the auction, then argua-
bly the county’s actions would constitute an intervening
cause breaking the chain of causation between petitioners’
misrepresentations and respondents’ injury.
Accordingly, it may well be that a RICO plaintiff alleg-
ing injury by reason of a pattern of mail fraud must estab-
lish at least third-party reliance in order to prove causa-
tion. “But the fact that proof of reliance is often used to
prove an element of the plaintiff’s cause of action, such as
the element of causation, does not transform reliance itself
into an element of the cause of action.” Anza, 547 U. S., at
478 (THOMAS, J., concurring in part and dissenting in
part). Nor does it transform first-party reliance into an
indispensable requisite of proximate causation. Proof that
the plaintiff relied on the defendant’s misrepresentations
may in some cases be sufficient to establish proximate
cause, but there is no sound reason to conclude that such
proof is always necessary. By the same token, the absence
of first-party reliance may in some cases tend to show that
an injury was not sufficiently direct to satisfy §1964(c)’s
proximate-cause requirement, but it is not in and of itself
dispositive. A contrary holding would ignore Holmes’
instruction that proximate cause is generally not amena-
ble to bright-line rules.
C
As a last resort, petitioners contend that we should
interpret RICO to require first-party reliance for fraud-
based claims in order to avoid the “over-federalization” of
20 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Opinion of the Court
traditional state-law claims. In petitioners’ view, respon-
dents’ claim is essentially one for tortious interference
with prospective business advantage, as evidenced by
Count V of their complaint. Such claims have tradition-
ally been handled under state law, and petitioners see no
reason why Congress would have wanted to supplement
traditional state-law remedies with a federal cause of
action, complete with treble damages and attorney’s fees,
in a statute designed primarily to combat organized crime.
See Anza, supra, at 471–475 (THOMAS, J., concurring in
part and dissenting in part); Beck, 529 U. S., at 496–497.
A first-party reliance requirement, they say, is necessary
“to prevent garden-variety disputes between local competi-
tors (such as this case) from being converted into federal
racketeering actions.” Reply Brief for Petitioners 3.
Whatever the merits of petitioners’ arguments as a
policy matter, we are not at liberty to rewrite RICO to
reflect their—or our—views of good policy. We have re-
peatedly refused to adopt narrowing constructions of
RICO in order to make it conform to a preconceived notion
of what Congress intended to proscribe. See, e.g., National
Organization for Women, Inc. v. Scheidler, 510 U. S. 249,
252 (1994) (rejecting the argument that “RICO requires
proof that either the racketeering enterprise or the predi-
cate acts of racketeering were motivated by an economic
purpose”); H. J. Inc. v. Northwestern Bell Telephone Co.,
492 U. S. 229, 244 (1989) (rejecting “the argument for
reading an organized crime limitation into RICO’s pattern
concept”); Sedima, S. P. R. L. v. Imrex Co., 473 U. S. 479,
481 (1985) (rejecting the view that RICO provides a pri-
vate right of action “only against defendants who had been
convicted on criminal charges, and only where there had
occurred a ‘racketeering injury’ ”).
We see no reason to change course here. RICO’s text
provides no basis for imposing a first-party reliance re-
quirement. If the absence of such a requirement leads to
Cite as: 553 U. S. ____ (2008) 21
Opinion of the Court
the undue proliferation of RICO suits, the “correction
must lie with Congress.” Id., at 499. “It is not for the
judiciary to eliminate the private action in situations
where Congress has provided it.” Id., at 499–500.
IV
For the foregoing reasons, we hold that a plaintiff as-
serting a RICO claim predicated on mail fraud need not
show, either as an element of its claim or as a prerequisite
to establishing proximate causation, that it relied on the
defendant’s alleged misrepresentations. Accordingly, the
judgment of the Court of Appeals is affirmed.
It is so ordered.