BRIDGE et al. v. PHOENIX BOND & INDEMNITY CO. et al.

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639 OCTOBER TERM, 2007
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 submit 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 Racke
teer Influenced and Corrupt Organizations Act (RICO) through a pat
tern of racketeering activity involving 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 stand
ing, finding that respondents were not protected by the mail fraud stat
ute because they did not receive the alleged misrepresentations. Re
versing, 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 because 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
not show, either as an element of its claim or as a prerequisite to estab
lishing proximate causation, that it relied on the defendant’s alleged
misrepresentations. Pp. 647–661.
(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 property 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 enter

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640 BRIDGE v. PHOENIX BOND & INDEMNITY CO.
Syllabus
prise’s affairs through a pattern of racketeering activity,” including
“mail fraud,” § 1961(1)(B). Mail fraud, in turn, occurs whenever a per
son, “having devised or intending to devise any scheme or artifice to
defraud,” uses the mail “for the purpose of executing such scheme or
artifice.” § 1341. The gravamen of the offense is the scheme to de
fraud, and any “mailing . . . ‘incident to an essential 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. Peti
tioners nonetheless argue that because the alleged pattern of racketeer
ing activity is predicated on mail fraud, respondents must show that
they relied on petitioners’ fraudulent misrepresentations, which they
cannot do because the misrepresentations were made to the county.
Nothing on the statute’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 relied on any misrepresentation, see Neder v. United States,
527 U. S. 1, 24–25; and one can conduct the affairs of a qualifying enter
prise through a pattern of such acts without anyone relying on a fraudu
lent misrepresentation. Thus, no reliance showing is required to estab
lish that a person has violated § 1962(c) by conducting an enterprise’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 recon
ciled 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 example, accepting
respondents’ allegations as true, they were harmed by petitioners’
scheme when they lost valuable liens they otherwise would have been
awarded. Pp. 647–650.
(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 fraud
statute; that a plaintiff bringing a RICO claim based on mail fraud must
show reliance on the defendant’s misrepresentations in order to estab
lish proximate cause; and that RICO should be interpreted to require
first-party reliance for fraud-based claims in order to avoid the “over
federalization” 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. 650–660.
477 F. 3d 928, affirmed.

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Thomas, J., delivered the opinion for a unanimous Court.
Theodore M. Becker argued the cause for petitioners.
With him on the briefs were Peter Buscemi and Joseph
Brooks.
David W. DeBruin argued the cause for respondents.
With him on the brief were Ian Heath Gershengorn and
Lowell E. Sachnoff.
Eric D. Miller argued the cause for the United States as
amicus curiae in support of respondents. On the brief were
former Solicitor General Clement, Assistant Attorney Gen
eral Fisher, Deputy Solicitor General Dreeben, and Pratik
A. Shah.*
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 violation” of the Act’s
criminal prohibitions. § 1964(c). The question presented in
this case is whether a plaintiff asserting a RICO claim predi
*Briefs of amici curiae urging reversal were filed for the Chamber of
Commerce of the United States of America by Gene C. Schaerr, Linda
T. Coberly, Charles B. Klein, Robin S. Conrad, and Amar D. Sarwal; for
the McKesson Corp. by Beth S. Brinkmann and Brian R. Matsui; and
for the Washington Legal Foundation by Daniel J. Popeo and Richard
A. Samp.
Briefs of amici curiae urging affirmance were filed for the State of
Connecticut et al. by Richard Blumenthal, Attorney General of Connecti
cut, Robert B. Teitelman, Assistant Attorney General, and Barry C. Bar
nett, and by the Attorneys General for their respective States as follows:
Terry Goddard of Arizona, Lisa Madigan of Illinois, Mike McGrath of
Montana, Gary K. King of New Mexico, Marc Dann of Ohio, W. A. Drew
Edmondson of Oklahoma, and Robert E. Cooper, Jr., of Tennessee; for
the International Association of Insurance Receivers by C. Philip Curley,
Cynthia H. Hyndman, and Robert S. Michaels; and for the National Asso
ciation of Shareholder and Consumer Attorneys by Kevin P. Roddy and
G. Robert Blakey.

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cated 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 reli
ance is not required, we affirm.
I
Each year the Cook County, Illinois, Treasurer’s Office
holds a public auction at which it sells tax liens it has ac
quired on the property of delinquent taxpayers.1 Prospec
tive buyers bid on the liens, but not in cash amounts. In
stead, 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 pen
alty 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 prop
erty by paying the lienholder the delinquent taxes, plus the
penalty established at the auction and an additional 12% pen
alty 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 prop
erty for the value of the delinquent 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 incentive taxpayers
would have if they could redeem their property from a win
ning bidder for less than the amount of their unpaid taxes,
the county does not accept negative bids.) The lower limit
1 Because this case arises from the District Court’s grant of petitioners’
motion to dismiss, we “accept as true all of the factual allegations con
tained in [respondents’] complaint.” Erickson v. Pardus, 551 U. S. 89, 94
(2007) (per curiam).

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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 ensure that liens are appor
tioned 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 pro
hibits it from using “apparent agents, employees, or related
entities” to submit simultaneous bids for the same parcel.2
Id., at 67. Upon registering for an auction, each bidder
must submit a sworn affidavit affirming 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 North
ern District of Illinois, contending that petitioners had fraud
ulently obtained a disproportionate share of liens by violat
ing the Single, Simultaneous Bidder Rule at the auctions
held from 2002 to 2005. According to respondents, peti
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 multi
ple 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 organization, or other entity that has a share
holder, 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 deter
mination of whether registered entities are related, so as to prevent the
entities from bidding at the same time, is in the sole and exclusive discre
tion of the Cook County Treasurer or her designated representatives.”
Ibid.

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tioner 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 attestations 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 proper
ties at a 0% rate. As a result, when the county allocated
liens on a rotating basis,3 it treated the related firms as inde
pendent entities, 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 pur
chased the liens and transferred the certificates of purchase
to Sabre Group. In this way, respondents allege, petitioners
deprived 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 rack
eteering activity involving numerous acts of mail fraud. In
support of their allegations of mail fraud, respondents assert
that petitioners “mailed or caused to be mailed hundreds of
mailings in furtherance of the scheme,” id., at 49, when they
3 Respondents’ complaint does not elaborate on the county’s rotational
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 mathe
matical 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 dispo
sition turns on this issue. For present purposes, it suffices that respond
ents 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.

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sent property owners various notices required by Illinois
law. Count V alleges a state-law claim of tortious interfer
ence with prospective business advantage.
On petitioners’ motion, the District Court dismissed re
spondents’ RICO claims for lack of standing. It observed
that “[o]nly [respondents] and other competing buyers, as op
posed to the Treasurer or the property owners, would suffer
a financial loss from a scheme to violate the Single, Simul
taneous Bidder Rule.” App. to Pet. for Cert. 17a. But it
concluded that respondents “are not in the class of indi
viduals protected by the mail fraud statute, and therefore
are not within the ‘zone of interests’ that the RICO stat
ute protects,” because they “were not recipients of the al
leged misrepresentations and, at best were indirect victims
of the alleged fraud.” Id., at 18a. The District Court de
clined to exercise supplemental jurisdiction over respond
ents’ 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 respondents suffered a “real injury” when they
lost the valuable chance to acquire more liens, and because
“that injury can be redressed by damages.” 477 F. 3d 928,
930 (2007). The Court of Appeals next concluded that re
spondents had sufficiently alleged proximate cause under
Holmes v. Securities Investor Protection Corporation, 503
U. S. 258 (1992), and Anza v. Ideal Steel Supply Corp., 547
U. S. 451 (2006), because they (along with other losing bid
ders) were “immediately injured” by petitioners’ scheme.
477 F. 3d, at 930–932. Finally, the Court of Appeals re
jected petitioners’ argument that respondents are not enti
tled 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 derivative of someone else’s.” Id., at 932.

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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, 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 Circuits hold that the plaintiff
must show that it in fact relied on the defendant’s misrepre
sentations, 477 F. 3d, at 932 (citing VanDenBroeck v. Com
monPoint 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.
Indemnity Ins. Co., 319 F. 3d 205, 223 (CA5 2003) (recogniz
ing “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 plain
tiff to show that it detrimentally relied on the defendant’s
misrepresentations).
We granted certiorari, 552 U. S. 1087 (2008), to resolve the
conflict among the Courts of Appeals on “the substantial
question,” Anza, supra, at 461, whether first-party reliance
is an element of a civil RICO claim predicated on mail fraud.4
4 The Court 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 plaintiff 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).

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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 “[a]ny
person injured in his business or property by reason of a
violation of section 1962 of this chapter may sue therefor in
any appropriate United States district court and shall re
cover 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 conduct of such enterprise’s
affairs through a pattern of racketeering activity.” The
term “racketeering activity” is defined to include a host
of so-called predicate acts, including “any act which is in
dictable 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 qualifying enterprise’s
affairs through a pattern of acts indictable as mail fraud.
Mail fraud, in turn, occurs whenever a person, “having de
vised or intending to devise any scheme or artifice to de
fraud,” 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) (citation and internal quotation marks
omitted), even if the mailing itself “contain[s] no false infor
mation,” id., at 715.
Once the relationship among these statutory provisions is
understood, respondents’ theory of the case is straightfor
ward. They allege that petitioners devised a scheme to de

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fraud when they agreed to submit false attestations of com
pliance 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 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 conducting the af
fairs of their enterprise through this pattern of racketeering
activity, petitioners violated § 1962(c). As a result, respond
ents lost the opportunity to acquire valuable liens. Accord
ingly, 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 pat
tern of racketeering activity consisted of acts of mail fraud,
respondents must show that they relied on petitioners’ fraud
ulent misrepresentations. This they cannot do, because the
alleged misrepresentations—petitioners’ attestations of com
pliance with the Single, Simultaneous Bidder Rule—were
made to the county, not respondents. The county may well
have relied on petitioners’ misrepresentations when it per
mitted them to participate in the auction, but respondents,
never having received the misrepresentations, could not
have done so. Indeed, respondents do not even allege that
they relied on petitioners’ false attestations. Thus, petition
ers submit, they fail to state a claim under RICO.
If petitioners’ proposed requirement of first-party reliance
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 exe
cute 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 misrepresentation. See Neder v. United
States, 527 U. S. 1, 24–25 (1999) (“The common-law re
quiremen[t] of ‘justifiable reliance’ . . . plainly ha[s] no place

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in the [mail, wire, or bank] fraud statutes”). And one can
conduct the affairs of a qualifying enterprise through a pat
tern of such acts without anyone relying on a fraudulent
misrepresentation.
It thus seems plain—and indeed petitioners do not dis
pute—that no showing of reliance is required to establish
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 dissenting in part) (“Be
cause an individual can commit an indictable 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 reliance 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 re
quirement 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 eas
ily reconciled with an implicit requirement that the plain
tiff show reliance in addition to injury in his business or
property.
Moreover, a person can be injured “by reason of ” a pattern
of mail fraud even if he has not relied on any misrepresenta
tions. This is a case in point. Accepting their allegations
as true, respondents clearly were injured by petitioners’
scheme: As a result of petitioners’ fraud, respondents 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

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of the misrepresentations, it would certainly seem that they
were injured in their business “by reason of ” a pattern of
mail fraud, even though they never received, and therefore
never relied on, the fraudulent mailings. Yet petitioners
concede that, on their reading of § 1964(c), the rival busi
nesses 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 position,
petitioners rely instead on a combination of common-law
rules and policy arguments in an effort to show that Con
gress 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 sug
gests none.
III
A
Petitioners first argue that RICO should be read to incor
porate 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 misrepresentation may
recover for common-law fraud, and that he may do so “if, but
only if . . . he relies on the misrepresentation in acting or
refraining from action.” 4 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 requirement when it created a
civil cause of action under RICO for victims of mail fraud.
In support of this argument, petitioners point to our deci
sion in Beck v. Prupis, 529 U. S. 494 (2000). There, we con
sidered the scope of RICO’s private right of action for viola
tions of § 1962(d), which makes it “unlawful for any person

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to conspire to violate” RICO’s criminal prohibitions. 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 ‘racketeer
ing 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 Congress 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 conspiracy 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 conspir
acy 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 necessary 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 pri
vate 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 provisions is the law of civil conspir
acy.” Id., at 501, n. 6.

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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 in
jury by reason of a violation of § 1962(c) based on a pattern
of mail fraud. The analogy to Beck, however, is misplaced.
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 Congress 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 indict
able 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
simpliciter, 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. 148,
162 (2008) (rejecting the argument that § 10(b) of the Securi
ties 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 stat
utes, if it intended fraud-related acts to be predicate acts
under RICO only when those acts would have been action
able 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 for private injury by reason of such a violation.” 529
U. S., at 501, n. 6. To be sure, Beck held that a plaintiff

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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
656–657, 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 fraudulent
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 predicate 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 misrepresentations in order
to establish the requisite element of causation. In Holmes,
we recognized that § 1964(c)’s “language 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

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the defendant violated § 1962, the plaintiff was injured, and
the defendant’s violation was a ‘but for’ cause of plaintiff ’s
injury.” 503 U. S., at 265–266 (footnote omitted). We none
theless 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 inter
preted to “requir[e] a showing that the defendant’s violation
not only was a ‘but for’ cause of his injury, but was the proxi
mate cause as well,” we concluded that § 1964(c) likewise re
quires 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 Associ
ated 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 person’s own
acts,” Holmes, 503 U. S., at 268, with a particular 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 violation led directly to the plaintiff ’s
injuries”). The direct-relation requirement avoids the dif
ficulties associated with attempting “to ascertain the amount
of a plaintiff ’s damages attributable to the violation, as dis
tinct from other, independent, factors,” Holmes, 503 U. S., at
269; prevents courts from having “to adopt complicated rules
apportioning damages among plaintiffs removed at differ
ent levels of injury from the violative acts, to obviate the
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

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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 misrepresentation.”
Brief for Petitioners 28. In support of this argument, peti
tioners cite 3 Restatement (Second) of Torts § 548A, which
provides that “[a] fraudulent misrepresentation 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 require
ment unless he can establish that his injuries resulted from
his reliance on the defendant’s fraudulent misrepresenta
tion.” Brief for Petitioners 28.
Petitioners’ argument is twice flawed. First, as explained
above, the predicate act here is not common-law fraud, but
mail fraud. Having rejected petitioners’ argument that reli
ance 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-cause analysis under
RICO must precisely track the proximate-cause analysis of
a common-law fraud claim. “Reliance is not a general limi
tation on civil recovery in tort; it ‘is a specialized condition
5 Applying these principles in Holmes, the Court held that the Securities
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 preclude 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.

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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 ele
ment of a common-law fraud claim, there is no general
common-law principle holding that a fraudulent misrepresen
tation can cause legal injury only to those who rely on it.
The Restatement provision cited by petitioners certainly
does not support that proposition. It provides only that the
plaintiff ’s loss must be a foreseeable result of someone’s reli
ance 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 contra
dicted by the long line of cases in which courts have permit
ted a plaintiff directly injured by a fraudulent misrepresen
tation to recover even though it was a third party, and not
the plaintiff, who relied on the defendant’s misrepresenta
tion.7 Indeed, so well established is the defendant’s liability
6 In addition to 3 Restatement (Second) of Torts § 548A (1976), 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 misrepresentation
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.
7 Such cases include Rice v. Manley, 66 N. Y. 82 (1876) (permitting plain
tiffs 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

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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 culpa
ble and not justifiable 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 in
jured 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 re
quirement for claims based on fraud cannot be reconciled
with these authorities.
Nor is first-party reliance necessary to ensure that there
is a sufficiently direct relationship between the defendant’s
wrongful conduct and the plaintiff ’s injury to satisfy the
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 superintendent 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 interference with
contractual relations, rather than as common-law fraud. See, e. g., 4 Re
statement (Second) of Torts § 767, Comment c (recognizing that “one [may
be] liable to another for intentional interference with economic relations
by inducing a third person by fraudulent misrepresentation not to do busi
ness with the other”). But petitioners miss the point. The cases are not
cited as evidence that common-law fraud can be established without show
ing first-party reliance. Rather, they—along with the Restatement’s rec
ognition 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.

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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 consequence of peti
tioners’ scheme to obtain more liens for themselves that
other bidders would obtain fewer liens. And here, unlike in
Holmes and Anza, there are no independent factors that ac
count 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 los
ing bidders were the only parties injured by petitioners’ mis
representations. 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 participating 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 defend
ant’s misrepresentations. Cf. Field v. Mans, 516 U. S. 59, 66
(1995) (“No one, of course, doubts that some degree of reli
ance 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 attestations of compliance with
the Single, Simultaneous Bidder Rule, and as a result had
not permitted petitioners to participate in the auction, re
spondents’ injury would never have materialized. In addi
tion, the complete absence of reliance may prevent the plain

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tiff from establishing proximate cause. Thus, for example,
if the county knew petitioners’ attestations were false but
nonetheless permitted them to participate in the auction,
then arguably the county’s actions would constitute an inter
vening cause breaking the chain of causation between peti
tioners’ misrepresentations and respondents’ injury.
Accordingly, it may well be that a RICO plaintiff alleging
injury by reason of a pattern of mail fraud must establish at
least third-party reliance in order to prove causation. “But
the fact that proof of reliance is often used to prove an ele
ment 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 suffi
cient to establish proximate cause, but there is no sound rea
son 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 amenable to bright-line rules.
C
As a last resort, petitioners contend that we should inter
pret RICO to require first-party reliance for fraud-based
claims in order to avoid the “over-federalization” of tradi
tional state-law claims. In petitioners’ view, respondents’
claim is essentially one for tortious interference with pro
spective business advantage, as evidenced by count V of
their complaint. Such claims have traditionally been han
dled under state law, and petitioners see no reason why Con

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gress 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 competitors (such as this case) from being con
verted 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 repeatedly
refused to adopt narrowing constructions of RICO in order
to make it conform to a preconceived notion of what Con
gress intended to proscribe. See, e. g., National Organiza
tion 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 predicate 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 private 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 pro
vides no basis for imposing a first-party reliance require
ment. If the absence of such a requirement leads to 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.

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IV
For the foregoing reasons, we hold that a plaintiff assert
ing a RICO claim predicated on mail fraud need not show,
either as an element of its claim or as a prerequisite to estab
lishing 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.