*

 The Honorable Patrick J. Duggan, United States District Judge for the Eastern District of Michigan, sitting

by designation.

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 08a0382p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

CHAZ CONCRETE COMPANY, LLC; GRANT

TRUCKING, INC.; GREEN RIVER SEED AND SOD, INC.;

SWEENEY ENTERPRISES, INC.; doing business as

Kentucky Transfer Line, on behalf of themselves

and a class of persons similarly situated,

Plaintiffs-Appellants,

v.

JAMES C. CODELL, III, Secretary of the Kentucky

Transportation Cabinet in his personal capacity; J.

M. YOWELL, Kentucky State Highway Engineer in

his personal capacity,

Defendants-Appellees.

X

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,

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N

No. 07-5870

Appeal from the United States District Court

for the Eastern District of Kentucky at Frankfort.

No. 03-00052—Karen K. Caldwell, District Judge.

Submitted: June 3, 2008

Decided and Filed: October 21, 2008 

Before: DAUGHTREY and MOORE, Circuit Judges; DUGGAN, District Judge.*

_________________

COUNSEL

ON BRIEF: Steven S. Reed, Kent Wicker, REED WICKER, Louisville, Kentucky, for Appellants.

William E. Johnson, JOHNSON, TRUE & GUARNIERI, Frankfort, Kentucky, Bridget Leigh

Dunaway, TAYLOR, KELLER, DUNAWAY & TOOMS, London, Kentucky, for Appellees.

_________________

OPINION _________________

DUGGAN, District Judge. In this action, brought pursuant to the Racketeer Influenced and

Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-68, plaintiffs-appellants Chaz Concrete

Co., LLC, Grant Trucking, Inc., Green River Seed and Sod, Inc., and Sweeney Enterprises, Inc.

1
No. 07-5870 Chaz Concrete Co., et al. v. Codell, et al. Page 2

alleged that defendants-appellees James C. Codell and J.M. Yowell employed mail fraud, 18 U.S.C.

§ 1341, in a scheme to defraud the United States Department of Transportation’s Federal Highway

Administration of money and property by certifying non-qualifying entities for participation in

Kentucky’s Disadvantaged Business Enterprise (“DBE”) program. The district court granted

summary judgment in favor of the defendants on the plaintiffs’ RICO claims. For the reasons set

forth below, we REVERSE the judgment of the district court and REMAND for further

proceedings consistent with this opinion. 

Kentucky’s DBE program is federally-mandated and administered through the Kentucky

Transportation Cabinet’s Office of Minority Affairs (“OMA”). Like all state DBE programs,

Kentucky’s DBE program was established to ensure that minority owned and operated small

business concerns received contracts for work performed in federally-funded highway construction

projects. The plaintiffs in this case are businesses that were certified as DBEs by the OMA. During

the time period relevant to this lawsuit, the defendants were employed by the Cabinet and played

a role in the certification of and award of contracts to DBEs. 

RICO’s civil remedy provision provides 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 recover threefold the damages he sustains and the cost of the suit,

including a reasonable attorney’s fee . . . .” 18 U.S.C. § 1964(c). One subsection of § 1962 that is

applicable in this case makes it “unlawful for any person employed by or associated with any

enterprise engaged in” activities 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.” Id. § 1962(c). RICO defines “racketeering activity” as, among other acts,

any act indictable as mail fraud under 18 U.S.C. § 1341. Id. § 1961(1). The plaintiffs also alleged

a claim under subsection (d) of § 1962, which makes it unlawful to conspire to violate subsections

(a), (b), and (c) of § 1962. 

Following a remand by this Court in Chaz Construction, LLC v. Codell, 137 Fed. Appx. 735

(6th Cir. May 11, 2005), the district court granted the defendants summary judgment on the

plaintiffs’ RICO claims. In granting the defendants summary judgment, the district court applied

the then-existing precedent of this Court requiring a plaintiff asserting a civil RICO claim based on

the predicate act of mail fraud to plead and prove reliance upon a statement made by a defendant to

a plaintiff. The district court’s application of this Court’s then- existing precedent eliminated the

plaintiffs’ claims involving the majority of the alleged “schemes” at issue in this case, because the

plaintiffs had failed to either proffer evidence that the defendants made a misrepresentation to the

plaintiffs or that the plaintiffs relied on any such misrepresentation. As to the remaining “scheme”

involving the defendants’ alleged enticement of DBEs to bid on the Shawnee Expressway highway

construction project, the district court found that there was no genuine issue of material fact as to

whether the defendants knew that the alleged misrepresentation they made to the plaintiffs was false.

After the plaintiffs brought their present appeal and after oral argument was scheduled and

later cancelled at the request of the parties, the Supreme Court issued a unanimous decision in

Bridge v. Phoenix Bond & Indemnity Company, __ U.S. __, 128 S. Ct. 2131, 170 L. Ed. 1012

(2008). In Bridge, the Supreme Court held that “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 establishing

proximate causation, that it relied on the defendant’s alleged misrepresentations.” Id. at __, 128 S.

Ct. at 2145. In so holding, the Supreme Court noted that a first-party reliance requirement finds no

support in RICO’s text. Id. at __, 128 S. Ct. 2139. Nor was the Supreme Court persuaded that

common law rules and policy require it to impose a first-party reliance requirement for civil RICO

claims predicated on mail fraud. See id. at __, 128 S. Ct. at 2139-45. 
No. 07-5870 Chaz Concrete Co., et al. v. Codell, et al. Page 3

Based on the Supreme Court’s ruling in Bridge, the precedent of this Court relied on by the

district court in granting summary judgment in the defendants’ favor has been overruled and is no

longer viable. Accordingly, we REVERSE the district court’s grant of summary judgment in the

defendants’ favor and REMAND the case for further proceedings consistent with Bridge. On

remand, the district court should also address the defendants’ argument that any RICO violation they

may have committed was not the proximate cause of the plaintiffs’ alleged injury or injuries, a

factually intensive inquiry that this Court is ill-equipped to resolve on the present record.