## Facts

- Cook County, Illinois held annual public auctions of tax liens on properties with delinquent taxes.
- To prevent any buyer from obtaining a disproportionate share of liens, Cook County adopted a “Single, Simultaneous Bidder Rule,” requiring bids in the buyer’s own name and forbidding bids through agents, employees, or related entities for the same parcel.
- Registered bidders had to submit sworn affidavits attesting compliance with the rule.
- Phoenix Bond and related entities competed in these auctions and alleged that Bridge and related entities used multiple affiliated bidders to submit simultaneous bids while filing false affidavits claiming compliance.
- After liens were awarded, statutory notices were mailed to property owners regarding redemption; Phoenix alleged these mailings furthered the alleged fraud and constituted mail-fraud predicate acts for RICO.
- Phoenix alleged competitive injury: the scheme allowed Bridge’s group to obtain more liens, reducing Phoenix’s opportunities and expected profits.

## Issues

1. Whether a civil RICO plaintiff alleging predicate acts of mail fraud must plead and prove reliance on the defendant’s misrepresentations.
2. Whether any reliance requirement, if it exists, must be satisfied by the plaintiff itself (as opposed to a third party).
3. Whether the absence of reliance forecloses proximate causation under RICO’s “by reason of” requirement.

## Decision

- The Supreme Court unanimously affirmed the court of appeals.
- A civil RICO plaintiff asserting mail-fraud predicate acts need not show reliance, either as an element of the claim or as a prerequisite to proximate cause.
- The Court held Phoenix could pursue its RICO claims even though the alleged misrepresentations were directed to Cook County and property owners, not to Phoenix.
- The Court emphasized that RICO still requires proximate causation: a direct relation between the alleged racketeering conduct and the plaintiff’s injury.

## Legal Principles

- Mail fraud focuses on the existence of a scheme to defraud and use of the mails “for the purpose of executing” the scheme; the statute does not require that the plaintiff relied on misrepresentations.
- In civil RICO actions predicated on mail fraud, courts may not add a reliance element not contained in the mail-fraud statute.
- RICO’s civil remedy requires injury to business or property “by reason of” a RICO violation, which incorporates a proximate-cause requirement demanding a direct relation between conduct and injury.
- Reliance can be one way to prove causation, but it is not categorically required; plaintiffs may establish proximate cause without showing that they (or anyone) relied on the misrepresentation.
- A plaintiff is not barred from RICO standing merely because false statements were made to third parties, so long as the plaintiff’s injury is direct rather than remote or derivative.

## Conclusion

The Court held that civil RICO claims based on mail fraud do not require proof of reliance on misrepresentations; instead, the plaintiff must show a direct, proximately caused injury to business or property resulting from the racketeering scheme.


Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008)