Commercial Litigation and Arbitration

RICO — Mail Fraud — Proving Reliance Remains Essential Where It Is Integral to Plaintiff’s Theory of Causation

Hoffman v. Zenith Ins. Co., 487 F. App’x 365 (9th Cir. 2012):

A RICO plaintiff must establish standing to sue under RICO's private right of action, 18 U.S.C. § 1964(c), by demonstrating "that the defendants' alleged misconduct proximately caused [the plaintiffs'] injury." Sosa v. DIRECTV, Inc., 437 F.3d 923, 941 (9th Cir. 2006) (internal quotation marks omitted). Although proximate cause, not reliance, is the essential element of statutory standing under RICO, proving reliance is necessary where it is integral to Plaintiffs' theory of causation. Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 659, 128 S. Ct. 2131, 170 L. Ed. 2d 1012 (2008).

Plaintiffs seek to satisfy the statute's proximate cause requirement through a theory of detrimental reliance: that Defendants lulled them into believing that disputed insurance claims would be negotiated in good faith. Reviewing de novo, Travelers Cas. & Sur. Co. of Am. v. Brenneke, 551 F.3d 1132, 1137 (9th Cir. 2009), we hold that the district court correctly granted summary judgment. Plaintiffs presented no admissible evidence that Defendants had put them on a "no pay" list; rather the evidence shows only an assumption by Plaintiffs that Defendants did not mean what they said, not any reliance on "lulling" statements made by Defendants.

Share this article:


Recent Posts