Erika Birg and Karl Neudorfer Published in Class Action Watch
"After Bridge: RICO Class Actions at a Crossing"

Erika Birg and Karl Neudorfer's article, "After Bridge: RICO Class Actions at a Crossing," was published in the May 2009 issue of Class Action Watch. In their article, Erika and Karl discuss Bridge v. Phoenix Bond & Indemnity Company, in which the U.S. Supreme Court held that a plaintiff does not need to prove that he or she actually relied on the defendant's allegedly false statement in making a compliant based on predicate acts of mail fraud. The authors explain that "in abstract, such a broad statement could lead practitioners to conclude that rejection of the first-party reliance requirement would inundate the courts with new class RICO (Racketeer Influenced and Corrupt Organizations Act) claims predicated on mail fraud." However, they contend that "Bridge is not without boundaries and RICO's civil action provision gives a private right of action only to persons injured in their business or property 'by reason of' a predicate RICO violation."

Erika and Karl note that an argument could be made that Bridge resulted in a change in RICO jurisprudence by getting rid of the requirement that plaintiffs plead and prove first-party reliance when making RICO claims predicated on acts of mail fraud. However, according to the authors, "Bridge may not necessarily cause the tide of RICO class litigation to rise significantly." Erika and Karl conclude that although there are a few cases that allowed class certification at least partly due to Bridge, RICO plaintiffs still must overcome a number of issues before they can prosecute a RICO claim on behalf of a class. In addition, due to "the heightened pleading and other procedural requirements that remain intact, RICO plaintiffs still must prove proximate cause as a substantive element of their case. In many if not most instances, making that showing will continue to require proof of reliance."