On June 9, 2008, the United States Supreme Court decided Bridge v. Phoenix Bond & Indemnity Co. in which the court determined that reliance was not an element of proof in a Civil RICO case. In Bridge, the Defendants had argued that the mailings which constituted the “mail fraud” predicate act for a Civil RICO violation required direct reliance by the Plaintiffs on the mailing. The Defendants had allegedly mailed false affidavits concerning the separate and distinct requirements of a tax foreclosure bidding process to the County Government. There were no false mailings directly to the Plaintiffs.

The Supreme Court held that the fact that the Plaintiffs neither received nor relied on the mailings was irrelevant. The court held that a Civil RICO case is proven by proving the elements of mail fraud only, and reliance is not required under the mail fraud statutes, just damages as a result of the fraudulent scheme. The Supreme Court also refused to read reliance into the statute through the proximate cause elements of RICO. The Supreme Court also refused to give credence to the Defendants’ arguments that RICO should be restricted to only those causes of action not otherwise actionable under state law.

Jeanelle R. Lust