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Bridge v. Phoenix Bond & Indem. Co.

Supreme Court of the United States

April 14, 2008, Argued; June 9, 2008, Decided

No. 07-210


 [*641]  [**2134]  Justice Thomas delivered the opinion of the Court.

The Racketeer Influenced and Corrupt Organizations Act (RICO or Act), 18 U.S.C. §§ 1961-1968, provides a private right of action for treble damages to "[a]ny person injured in his business or property by reason of a violation" of the Act's criminal prohibitions. § 1964(c). The question presented in this case is whether a plaintiff asserting a RICO claim predicated  [*642]  on mail fraud must plead and prove that it relied on the defendant's alleged misrepresentations. Because we agree with the Court of Appeals that a showing of first-party reliance is not required, we affirm.

 [**2135] I

Each year the Cook County,  [****6] Illinois, Treasurer's Office holds a public auction at which it sells tax liens it has acquired on the property of delinquent taxpayers.1  Prospective buyers bid on the liens, but not in cash amounts. Instead, the bids are stated as percentage penalties the property owner must pay the winning bidder in order to clear the lien. The bidder willing to accept the lowest penalty wins the auction and obtains the right to purchase the lien in exchange for paying the outstanding taxes on the property. The property owner may then redeem the property by paying the lienholder the delinquent taxes, plus the penalty established at the auction and an additional 12% penalty on any taxes subsequently paid by the lienholder. If the property owner does not redeem the property within the statutory redemption period, the lienholder may obtain a tax deed for the property, thereby in effect purchasing the property for the value of the delinquent taxes.

 [****7] Because property acquired in this manner can often be sold at a significant profit over the amount paid for the lien, the auctions are marked by stiff competition. As a result, most parcels attract multiple bidders willing to accept the lowest penalty permissible—0%, that is to say, no penalty at all. (Perhaps to prevent the perverse incentive taxpayers would have if they could redeem their property from a winning bidder for less than the amount of their unpaid taxes, the county does not accept negative bids.) The lower limit  [*643]  of 0% creates a problem: Who wins when the bidding results in a tie? The county's solution is to allocate parcels "on a rotational basis" in order to ensure that liens are apportioned fairly among 0% bidders. App. 18.

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553 U.S. 639 *; 128 S. Ct. 2131 **; 170 L. Ed. 2d 1012 ***; 2008 U.S. LEXIS 4703 ****; 76 U.S.L.W. 4381; 21 Fla. L. Weekly Fed. S 295

JOHN BRIDGE, et al., Petitioners v. PHOENIX BOND & INDEMNITY CO. et al.

Subsequent History: Summary judgment granted by Phoenix Bond & Indem. Co. v. Bridge, 2010 U.S. Dist. LEXIS 148284 (N.D. Ill., Aug. 24, 2010)


Phoenix Bond & Indem. Co. v. Bridge, 477 F.3d 928, 2007 U.S. App. LEXIS 3690 (7th Cir. Ill., Feb. 20, 2007)

Disposition: Affirmed.


mail fraud, petitioners', misrepresentations, common-law, Bidder, mail, first-party, liens, proximate cause, auction, respondents', causation, bid, fraudulent misrepresentation, predicate act, indictable, pattern of racketeering activity, common law, attestations, racketeering, conspiracy, enterprise, private right of action, cause of action, injured person, property owner, predicated, racketeering activity, scheme to defraud, civil conspiracy

Antitrust & Trade Law, Private Actions, Racketeer Influenced & Corrupt Organizations, Scope, Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Claims, Fraud, Criminal Law & Procedure, Racketeering, Racketeer Influenced & Corrupt Organizations Act, Elements, Fraud Against the Government, Mail Fraud, General Overview, Torts, Causation, Proximate Cause, Fraud & Misrepresentation, Actual Fraud, Governments, Legislation, Statutory Remedies & Rights