Blawgletter had the honor last week of contributing to an amicus brief in Bridge v. Phoenix Bond & Indemnity Co., No. 07-210 (U.S.), which the Court will hear April 14.  The issue?  "Whether reliance is a required element of a RICO claim predicated on mail fraud and, if it is, whether that reliance must be by the plaintiff."

The States of Connecticut, Arizona, Illinois, Montana, New Mexico, Ohio, Oklahoma, and Tennessee filed the brief to express their opposition to adding a "reliance by the plaintiff" element.  They bring a law enforcement perspective to the dispute.  And we think they have the better end of the argument.

We also have favorite passages from the brief.  They include:

  • "The ‘conjunction’ of one statute — which does not incorporate a reliance element — with another one — which likewise does not incorporate it — cannot generate the absent element."
  • "Curtailing the reach of section 1964(c) by engrafting a ‘reliance’ element on it in 2008 would defeat the mandate of Congress in 1970 [when it passed RICO] just as surely as adding a ‘racketeering injury’ element or a ‘prior-conviction requirement’ to it would have in 1985 [when the Court rejected both]."
  • "[W]e believe that aggregate litigation, including class actions, more often than not serves the salutary purpose of leveling the parties’ respective bargaining positions; absent aggregation, an individual who has lost $5 or even $500 as a proximate result of a company’s RICO violation enjoys a purely theoretical right to a civil remedy."
  • "The reliance element existed from the moment the cause of action [under SEC Rule 10b-5] sprang from the Court’s brow."

We especially like the States’ point that the "by reason of" language in RICO incorporates the Court’s antitrust decisions, which upheld liability despite the fact that the plaintiff did not rely on fraudulent conduct by the defendant.

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