Document: 128 S. Ct. 2131 (2008) John BRIDGE et al., Petitioners, v. PHOENIX BOND & INDEMNITY CO. al. No. 07-210. Supreme Court of United States. Argued April 14, 2008. Decided June 9, *2134 Theodore M. Becker, Chicago, IL, for petitioners. David W. DeBruin, Washington, DC, respondents. Eric D. Miller, the States as amicus curiae, by special leave Court, supporting Peter Buscemi, Joseph Brooks, Michelle Park Chiu, Morgan, Lewis Bockius LLP, D.C., Counsel Record, James E. Bayles, Jr., Illinois, Petitioners. Lowell Sachnoff, C. Bohan, Moynihan, Reed Smith Jonathan L. Marks, Katten Muchin Rosenmann Ian Heath Gershengorn, Matthew Hellman, Carrie F. Apfel, Sharmila Sohoni, Jenner Block Respondents. Justice THOMAS delivered opinion Court. The Racketeer Influenced and Corrupt Organizations Act (RICO or Act), 18 U.S.C. §§ 1961-1968, provides a private right action treble damages to "[a]ny person injured in his business property reason violation" Act's criminal prohibitions. § 1964(c). question presented this case is whether plaintiff asserting RICO claim predicated on mail fraud must plead prove that it relied defendant's alleged misrepresentations. Because we agree with Appeals showing first-party reliance not required, affirm. *2135 I Each year Cook County, Treasurer's Office holds public auction at which sells tax liens has acquired delinquent taxpayers.[1] Prospective buyers bid liens, but cash amounts. Instead, bids are stated percentage penalties owner pay winning bidder order clear lien. willing accept lowest penalty wins obtains purchase lien exchange paying outstanding taxes property. may then redeem lienholder taxes, plus established an additional 12% any subsequently paid lienholder. If does within statutory redemption period, obtain deed property, thereby effect purchasing value taxes. manner can often be sold significant profit over amount lien, auctions marked stiff competition. As result, most parcels attract multiple bidders permissible0%, say, no all. (Perhaps prevent perverse incentive taxpayers would have if they could their from less than unpaid county negative bids.) lower limit 0% creates problem: Who when bidding results tie? county's solution allocate "on rotational basis" ensure apportioned fairly among bidders. App. 18. But its own: Bidders who, addition themselves, send agents behalf will disproportionate share liens. To kind manipulation, adopted "Single, Simultaneous Bidder Rule," requires each "tax buying entity" submit own name prohibits using "apparent agents, employees, related entities" simultaneous same parcel.[2] 67. Upon registering auction, sworn affidavit affirming complies Single, Rule. Petitioners respondents regular participants County's sales. *2136 In July 2005, filed complaint District Northern contending petitioners had fraudulently obtained violating Rule held 2002 2005. According respondents, petitioner Sabre Group, LLC, principal Barrett Rochman arranged firms Group's directed them file false attestations complied Having thus opportunity participate collusively properties rate. allocated rotating basis,[3] treated independent entities, allowing collectively acquire greater number been granted single acting alone. purchased transferred certificates Group. way, allege, deprived other fair attendant financial benefits. Respondents' contains five counts. Counts I-IV allege violated conspired violate conducting affairs through pattern racketeering activity involving numerous acts fraud. support allegations fraud, assert "mailed caused mailed hundreds mailings furtherance scheme," 49, sent owners various notices required Illinois law. Count V alleges state-law tortious interference prospective advantage. On petitioners' motion, dismissed respondents' claims lack standing. It observed "[o]nly [respondents] competing buyers, opposed Treasurer owners, suffer loss scheme Rule." Pet. Cert. 17a. concluded "are class individuals protected statute, therefore `zone interests' statute protects," because "were recipients misrepresentations and, best were indirect victims fraud." Id., 18a. declined exercise supplemental jurisdiction tortious-interference without prejudice. Seventh Circuit reversed. first "[s]tanding problem suit" plaintiffs suffered "real injury" lost valuable chance more "that injury redressed damages." 477 F.3d *2137 928, 930 (2007). next sufficiently proximate cause under Holmes Securities Investor Protection Corporation, 503 U.S. 258, 112 1311, 117 Ed. 2d 532 (1992), Anza Ideal Steel Supply Corp., 547 451, 126 1991, 164 720 (2006), (along losing bidders) "immediately injured" scheme. F.3d, 930-932. Finally, rejected argument entitled relief did receive, rely on, statements: "A injures D making statements E actionable derivative someone else's." 932. With respect last holding, acknowledged courts taken conflicting views. By count, "[t]hree circuits considered . direct victim recover recipient statements," ibid. (citing Mid Atlantic Telecom, Inc. Long Distance Servs., Inc., 260, 263-264 (C.A.4 1994); Systems Management, Loiselle, 303 100, 103-104 (C.A.1 2002); Corp. Anza, 373 251, 263 (C.A.2 2004)), whereas two Circuits hold show fact misrepresentations, 932 VanDenBroeck CommonPoint Mortgage Co., 210 696, 701 (C.A.6 2000); Sikes Teleline, 281 1350, 1360-1361 (C.A.11 2002)). Compare also Sandwich Chef Texas, Reliance Nat'l Indemnity Ins. 319 205, 223 (C.A.5 2003) (recognizing "a narrow exception requirement fraudulent predicate act demonstrate contemporaneous result committed against third party"), Appletree Square I, L.P. W.R. Grace 29 1283, 1286-1287 (C.A.8 1994) (requiring detrimentally misrepresentations). We certiorari, 552 ___, 829, 169 625 (2008), resolve conflict Courts "the substantial question," U.S., 461, element civil fraud.[4] II begin setting forth applicable provisions. RICO's contained 1964(c), relevant part violation section 1962 chapter sue therefor appropriate district court shall threefold he sustains cost suit, including reasonable attorney's fee." Section Pertinent here 1962(c), makes "unlawful employed associated with" enterprise *2138 engaged affecting interstate foreign commerce "to conduct participate, directly indirectly, such enterprise's activity." term "racketeering activity" defined include host so-called acts, "any indictable under. 1341 (relating fraud)." 1961(1)(B). upshot qualifying Mail turn, occurs whenever person, "having devised intending devise artifice defraud," uses "for purpose executing attempting so do." 1341. gravamen offense defraud, "mailing incident essential satisfies mailing element," Schmuck States, 489 705, 712, 109 1443, 103 734 (1989) (citation internal quotation marks omitted), even itself "contain[s] information," id., 715, 1443. Once relationship these provisions understood, theory straightforward. They defraud agreed compliance county. scheme, used occasions requisite owners. was "act indictable" together constituted "pattern activity, 1962(c). Accordingly, plain terms give damages. argue, however, consisted This cannot do, misrepresentationspetitioners' Rulewere made county, well permitted never having received done so. Indeed, do attestations. Thus, submit, fail state RICO. proposed seems come out nowhere, there reason: Nothing face imposes requirement. Using execute attempt hence RICO, one misrepresentation. See Neder 527 1, 24-25, 119 1827, 144 35 (1999) ("The common-law requiremen[t] `justifiable reliance'. plainly ha[s] place [mail, wire, bank] statutes"). And *2139 anyone relying plainand indeed disputethat establish 1962(c) consisting 476, 1991 (THOMAS, J., concurring dissenting part) ("Because individual commit wire relies engage 1962, proof reliance"). then, virtue action. difficult derive states simply 1962" person" violation, suggesting breadth coverage easily reconciled implicit Moreover, "by of" point. Accepting true, clearly scheme: otherwise awarded. true though rules. Or, take another example, suppose wants get rid rival businesses mails about customers suppliers, rivals themselves. lose money certainly seem received, mailings. Yet concede that, reading Tr. Oral Arg. 4, primary intended defraud. Lacking textual counterintuitive position, instead combination rules policy arguments effort Congress should presumed based None persuades us read into suggests none. III A argue incorporate cases "under rule intends well-settled meaning uses." Neder, supra, 23, 1827. long settled, contend, only misrepresentation "if, refraining action." Restatement (Second) Torts 537 (1977). Given background common law, maintain, created *2140 argument, point our decision Beck Prupis, 529 494, 120 1608, 146 561 (2000). There, scope violations 1962(d), conspire violate" "whether overt conspiracy 1964(c) 1962(d) constitute `racketeering activity.'" 500, 1608. Answering negative, "injury wrongful sufficient rise 1962(d)." 505, 1608 omitted). doing, "turn[ed] well-established law conspiracy." "widely accepted" time enactment bring suit tortious," 501, `injured of' `conspir[acy],' meant adopt principles." 504, (quoting 1962(d); alterations original). specifically conspiracy, conspiracy: "We turned define what constitutes see Salinas 522 52, 63-65[, 118 469, 139 352] (1997), mere being all necessary liability. case, present rather violation. words, task interpret conjunction, standing obvious source combined n. 6, Beck, look content analogy misplaced. critical difference between term"conspir[acy]" settled meaning, included use "fraud"; nor operative language 1961(1)(B), defines 1341." misrepresentation, short, key 1962(c)"racketeering activity"is term, simpliciter, frauda unknown circumstances, presumption little pull. Cf. Stoneridge Investment Partners, LLC Scientific-Atlanta, *2141 761, 773, 627 (rejecting 10(b) Exchange 1934, 15 78j(b), incorporates fraud). There "reason believe activity' statutes, fraud-related those law." 477-478, part). Nor help here, "what 1962[(c)], violation." sure, merely resulting injury. "conspiracy" understanding means purposes bringing 501-504, No comparable exists argument. discussed infra, 2142-2143, recognized variety circumstances where, injuries party. For reasons, reject contention "common-law meaning" dictates statute. chose make underlying particular happen offenses mean reliance, incorporated claim." B who brings causation. Holmes, 1964(c)'s "language can, course, `by recover, defendant injured, `but for' plaintiff's injury." 265-266, 1311 (footnote nonetheless "all factually plaintiffs" 266, 1311. modeled interpreted "requir[e] injury, well," likewise 268, *2142 Proximate cause, explained, flexible concept lend "`a black-letter dictate every case.'" 272, 20, Associated Gen. Contractors Cal., Carpenters, 459 519, 536, 897, 74 723 (1983)). "use[d] `proximate cause' label generically judicial tools person's responsibility consequences acts," emphasis "demand some relation asserted injurious alleged," ibid.; ("When evaluates causation, central ask led injuries"). direct-relation avoids difficulties ascertain attributable distinct other, independent, factors," 269, 1311; prevents complicated apportioning removed different levels violative obviate risk recoveries," recognizes "directly generally counted vindicate attorneys general, problems upon suits remotely," 269-270, 1311.[5] Pointing proximate-causation principles "[u]nder principles, where misrepresentation." Brief 28. cite 548A, "[a] legal pecuniary inaction if, might reasonably expected reliance." conclude, satisfy unless resulted Petitioners' twice flawed. First, explained above, let back door holding proximate-cause analysis precisely track claim. "Reliance general limitation recovery tort; `is specialized condition happens grown up fraud.'" 477, *2143 104). That "specialized condition," characterized prerequisite establishing remedial keyed commission require reliance. Second, while claim, principle it. provision cited proposition. foreseeable someone's misrepresentation.[6] say legally cognizable notion contradicted line party, plaintiff, misrepresentation.[7] liability sets "[g]eneral [p]rinciple" "[o]ne intentionally causes subject culpable justifiable circumstances." 870. illustration, example "seeks promote interests telling known falsehood product." Comment h (emphasis added). action" favor party "defrauds causing harm person." 435A, a. traditionally *2144 authorities. articulated Anza. Again, injurythe liensis natural consequence themselves fewer unlike factors account duplicative recoveries immediate better situated sue. both parties 17a; 931. quibble conclusion, too taint deterred potential participating auction. eventuality, contrast speculative remote. Of none prevail Field Mans, 516 59, 66, 116 437, 133 351 (1995) ("No one, doubts degree causation inherent phrase `obtained by'" 11 523(a)(2)(A), discharge debts "obtained by" cases, able but-for If, accepted Rule, materialized. addition, complete absence cause. knew arguably actions intervening breaking chain alleging least third-party "But action, transform 478, indispensable Proof sound conclude always necessary. token, tend requirement, dispositive. contrary *2145 ignore Holmes' instruction amenable bright-line C resort, contend fraud-based avoid "over-federalization" traditional claims. view, essentially advantage, evidenced complaint. Such handled why wanted supplement remedies federal fees, designed primarily combat organized crime. 471-475, part); 496-497, garden-variety disputes local competitors (such case) converted actions." Reply 3. Whatever merits matter, liberty rewrite reflect their ourviews good policy. repeatedly refused narrowing constructions conform preconceived proscribe. See, e.g., National Organization Women, Scheidler, 510 249, 252, 114 798, 127 99 (1994) "RICO either motivated economic purpose"); H.J. Northwestern Bell Telephone 492 229, 244, 2893, 106 195 crime concept"); Sedima, S.P.R.L. Imrex 473 479, 481, 105 3275, 87 346 (1985) view "only defendants convicted charges, occurred injury'"). change course here. text basis imposing leads undue proliferation suits, "correction lie Congress." 499, 3275. "It judiciary eliminate situations provided it." 499-500, IV foregoing need show, judgment affirmed. ordered. NOTES [1] arises Court's grant motion dismiss, "accept factual [respondents'] complaint." Erickson Pardus, 551 2197, 2200, 167 1081 [2] "one entity (principal) its/his/her/their actual apparent indirectly register registrations perceived sale increasing principal's likelihood obtaining successful parcel." "Related Bidding Entity" individual, corporation, partnership, joint venture, limited company, organization, shareholder, partner, principal, officer, partner ownership interest with, contractual registrant." Ibid. further "[t]he determination registered entities related, time, sole exclusive discretion County her designated representatives." [3] elaborate system. described follows: "If X ten parcels, parcel attracts rate, awards parcels. Winners according ratio identical bids." 929 (C.A.7 2007). object description supported record inappropriately "inject[s] mathematical certainty missing itself." 20. While precise system calculate damages, nothing disposition turns issue. purposes, suffices "suffered acquire, profits flowing therefrom, [petitioners] implemented excess 50. [4] recent 720. address matter now before us. 475-478, (reaching concluding [5] Applying Corporation (SIPC) stock-manipulation prevented broker-dealers meeting obligations customers, triggering SIPC's duty reimburse customers. 270-274, applied preclude company recovering allegedly prices failed charge sales 456-461, 1991. [6] 548A (1977), section, "[c]ausation, losses incurred recipient's taking Like itself, comment proximately recipient. [7] Rice Manley, 66 N.Y. 82 (1876) (permitting buy large quantity cheese induced vendor sell him falsely representing longer wished it); Gregory Conn. 437 (1868) wharf deprive business, misrepresented himself superintendent wharves ordered vessel unloading leave); Respondents 26-29 (collecting cases). irrelevant today torts, relations, 767, c [may be] liable intentional relations inducing other"). miss evidence Rather, theyalong Restatement's recognition torts relianceshow

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