Opinion ID: 597807
Heading Depth: 3
Heading Rank: 3

Heading: The Mail and Wire Fraud Predicate Acts

Text: 68 William argues that the jury's findings with respect to mail and wire fraud as RICO predicate acts should be reversed because (1) the district court failed to instruct the jury properly as to the required causal nexus between these predicate acts and Metromedia's injury, and (2) the evidence adduced by Metromedia was insufficient to support a finding of justified reliance. We find no basis for reversal. 69 RICO provides that [a]ny person injured in his business or property by reason of a RICO violation may bring a civil action to recover treble damages. 18 U.S.C. § 1964(c).  'The phrase by reason of requires that there be a causal connection between the prohibited conduct and [the] plaintiff's injury.'  County of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1311 (2d Cir.1990) (quoting Norman v. Niagara Mohawk Power Corp., 873 F.2d 634, 636 (2d Cir.1989)); see Holmes v. Securities Investor Protection Corp., --- U.S. ----, 112 S.Ct. 1311, 117 L.Ed.2d 532 (section 1964(c) requires plaintiff to establish proximate cause). In the context of an alleged RICO predicate act of mail fraud, we have stated that to establish the required causal connection, the plaintiff was required to demonstrate that the defendant's misrepresentations were relied on. County of Suffolk v. Long Island Lighting Co., 907 F.2d at 1311; see also Brandenburg v. Seidel, 859 F.2d 1179, 1188 n. 10 (4th Cir.1988); Grantham & Mann, Inc. v. American Safety Products, Inc., 831 F.2d 596, 606 (6th Cir.1987). 70 In the present case, the trial court instructed the jury on causation without specifying the role of reliance. It stated as follows: 71 If you find that all of the elements of the alleged violation of Section 1962(b), (c) or (d) ... have been established by a preponderance of the evidence, before you may find for Metromedia, you must also find that Metromedia sustained an injury to its business. Either damages caused by the unlawful acts or damages caused by the pattern of acts, or both, will satisfy th[is] requirement. Damages not caused by the unlawful acts or pattern of acts do not satisfy this requirement. 72 (Trial Transcript 2252 (emphasis added)). Though it would have been preferable to have included an instruction that informed the jury of the relationship between causation and reliance, the absence of such an instruction here provides no basis for reversal. Subotnick testified that he received some of the false financial statements in the mail, that he had numerous telephone conversations with William urging Subotnick to have Metromedia make the purchase, and that if Subotnick had known the extent to which the financial figures provided by William and Express were inaccurate, Metromedia would not have entered into the stock purchase agreement. Thus, there was plainly sufficient evidence for the jury to find causation and reliance. 73 Finally, we reject William's contention that any reliance by Metromedia could not have been justified because it had a team of attorneys and financial experts studying Express's condition. Appellants' misrepresentations and nondisclosures denied Metromedia's advisors access to accurate information, and the record does not suggest that they knew the true state of Express's affairs. The suggestion that Metromedia could not justifiably rely on appellants' representations is meritless.