Brown v. Cassens Transport Co.

tionship a fiduciary duty creates sion that Meadows failed to otherwise presented circumstances in this appeal. state a claim upon which relief can be Texas, employers generally do not owe granted, we affirm the dismissal of Mead- fiduciary duties to their employees. See ows’s claim equitable relief. Power, Inc., Beverick v. Koch 186 S.W.3d (“Texas 153 (Tex.App.2005) does not IV. CONCLUSION recognize a fiduciary duty ... owed by an For the reasons, foregoing we affirm the employer an employee.”) (citing City of district court’s judgment.

Midland v. O’Bryant, 18 S.W.3d (Tex.2000)). Moreover, Meadows’s com-

plaint fails to any assert allegations de-

monstrative of a confidential relationship

between himself and For Camelot.

reasons, allegations set forth to estab-

lish the breach of fiduciary duty claim

cannot survive the motion to dismiss. BROWN, Paul Fanaly, William Charles Thomas, Gary Riggs, Robert Orlikow- C. ski, and Way, Scott Plaintiffs-Appel- law, Under Texas civil conspir lants, acy is a derivative tort. If a fails to state a separate underlying claim on which the grant court may relief, then CASSENS CO., TRANSPORT Crawford claim for civil conspiracy necessarily Company, fails. & and Dr. Margules, Saul Marshall, See Tilton v. S.W.2d Defendants-Appellees. (Tex.1996). Thus, whether Meadows No. 05-2089. stated a claim for civil conspiracy rises and falls on whether he stated a claim on an United States Appeals, Court of underlying tort. Based on our conclusion Sixth Circuit. that Meadows’s underlying tort claims Argued: July 2006.

were properly dismissed the district court, Decided and Filed: accordingly dismiss his claim of civil conspiracy.

D.

Finally, complaint Meadows’s sought “all

legal and equitable relief appropriate un-

der this complaint.” The district court

dismissed complaint without discussion

of Meadows’s equitable claim. In this ap-

peal, Meadows contends that the district

court erred because “it unjust for the

appellees to profit from using Meadows’s

private information without paying Mead-

ows anything for that information.” Given

the deferential standard of review accord-

ed the district court and our legal conclu- Lasser, Law D. Marshall

ARGUED: Southfield, Lasser, Marshall Office Michigan, for Appellants. Janet E. La- state claim on which relief could be nyon, Dean Fulkerson, & Troy, Michigan, granted. 12(b)(6). Fed.R.Civ.P. Pierson, Joan N. Firm, Williams For the below, reasons we affirm. Blanc, Grand Michigan, for Appellees. ON BRIEF: Marshall Lasser, D. Law I. Office of Lasser, Marshall Southfield, Plaintiffs are Michigan, current Appellants. for or former employ- Janet E. La- ees of nyon, Cassens who Dean & Fulkerson, submitted Troy, worker’s Michigan, compensation claims to Timothy R. Winship, Cassens based on The Firm, Williams injuries they claim Blanc, Grand have Michigan, sustained for while Appellees.

performing work-related tasks. It is un- contested Cassens, which is self-in- Before: MOORE GIBBONS, sured for purposes of paying benefits un- Circuit Judges; ACKERMAN, District der WDCA, contracted with Crawford Judge.* to serve as adjuster a claims for the work- er’s compensation claims of Cassens’s em- GIBBONS, J., delivered ployees. According plaintiffs, Cassens the court. MOORE, (pp. 648-51), J. and Crawford deliberately selected and delivered a separate opinion concurring in paid unqualified doctors, including Mar- part and dissenting in part. gules, give fraudulent medical opinions ACKERMAN, D.J. 651-52), (pp. delivered that would support the denial of worker’s separate concurring opinion. compensation benefits. Plaintiffs further

assert that Cassens and ignored Crawford OPINION other medical evidence demonstrating that plaintiffs’ injuries were work related and JULIA SMITH GIBBONS, Circuit thus compensable under the WDCA. Plain- Judge. tiffs accuse defendants of wrongfully deny- ing or ceasing worker’s compensation ben- Plaintiffs-appellants Brown, Paul Wil- efits payable to them as a result of their liam Fanaly, Thomas, Charles Gary Riggs, injuries. Robert Orlikowski, and Way Scott (“plain- tiffs”) filed suit in federal district court On June plaintiffs filed suit against defendants-appellees against Cassens Cassens, Crawford, and Margules Transport Company (“Cassens”), Crawford in federal court, district claiming violations & Company (“Crawford”), and Dr. Saul of the Racketeer Influenced and Corrupt Margules (“defendants”) alleging that de- Organizations Act (“RICO”), 18 U.S.C. employed fendants mail and wire §§ fraud in 1961(1)(B), 1962(c), 1964(c). Plaintiffs a scheme deny them worker’s compen- asserted in their complaint that defendants sation promised benefits under the Michi- sent fraudulent communications among gan Worker’s Disability Compensation Act themselves and to by mail and (“WDCA”), Mich. Comp. § 418.301, Laws wire in violation of 18 §§ U.S.C. and raising federal and state law 1343; claims. those allegations of mail and wire On motion, defendants’ the district court fraud constituted acts for plaintiffs’ dismissed complaint for failure RICO claims. Plaintiffs also *The Ackerman, Honorable Harold A. Senior Jersey, New sitting by designation. Judge States District for the District of 1341, or § fraud, U.S.C. mail federal in intentional law a state raised statutes. § fraud, 18 U.S.C. Defendants distress. of emotional fliction providing In addition § 1961. U.S.C. Fed. pursuant dismissal for moved racketeering for certain penalties criminal and, 12(b)(6), R.Civ.P. right private activities, provides Brown motion. granted court district “[a]ny per damages treble action F.Supp.2d Transp. Cassens property business in his injured son day same On (E.D.Mich.2005). ” 1962.... section order, violation of a reason its dismissal issued court 1964(c). file U.S.C. for leave a motion filed entered complaint. amended challenge the plaintiffs appeal, On July on defendants in favor judgment their dismiss to court’s district to motion plaintiffs’ denied and that ground on claims 22, RICO on complaint amended file an on the detrimental plead failed misrepresentations alleged defendants’ timely appeal. filed Plaintiffs As injuries. their the cause of concerning the well-established acknowledge, plaintiffs II. requires this circuit precedent court’s a district novo de review We or wire mail alleging plaintiff state failure for 12(b)(6) dismissal Rule is, defen that a reliance, that plead fraud granted. can relief which upon a claim representations fraudulent made dant Mich., & Blue Shield Cross v. Blue Hill relied. the plaintiff which on plaintiff Cir.2005). The (6th 710, 716 v. CommonPoint See, e.g., VanDenBroeck taken- are allegations factual (6th 696, 701 Cir. Co., 210 F.3d Mortgage -the in viewed complaint and true Beer, Inc. Distribs. 2000); Cent. Id. plaintiffs. favorable most light Cir.1993); (6th 181, 184 Conn, 5 F.3d dis court’s affirm willWe E. Hel Servs., v. Walter Inc. Fin. Blount 12(b)(6) Rule complaint aof missal Cir.1987); (6th 151, 152 Co., &ler beyond doubt it appears “unless grounds Corp., v. Southland Bender set no prove can plaintifffs] urge us Cir.1984). Plaintiffs which elaimfs] [their] support facts re and holdings from depart (altera to relief.” [them] entitle would alter an court, proposing the district verse marks (internal quotation original) tion re eliminates rule native omitted). a successful permits quirement where wire or on mail based III. made a defendant alleges United 18, Section Title person third ato misrepresentation indi- an it unlawful makes Code States injury anof cause proximate associated or “employed vidual ex precedent our Because plaintiff. relating in activities engaged enterprise” showing of requires pressly con- “to commerce foreign or to interstate propose, plaintiffs rule forecloses thus indirectly, or directly participate, duct judg court’s the district affirm we must affairs enterprise’s such conduct in the ment. racketeering activi- pattern through a us to discard persuade effort In their 1962(c). The term 18 U.S.C. ty....” ju- our the reliance includes, among activity” “racketeering Su- to both point risprudence, indictable any act things, other preme precedent and the caselaw of v. States, our sister circuits. Neither source com- Cir.1930), and we are aware of no court pels the result plaintiffs urge, however. taking a contrary position.1 pro- Neder We begin with the two decisions of the vides us with little insight, however, into Supreme Court on which rely: proof necessary for a successful civil Neder v. United 527 U.S. 119 RICO claim. While one could reasonably 144 L.Ed.2d (1999), conclude that the absence of reliance as an Sedima, S.P.R.L. v. Imrex element of criminal mail and wire fraud (1985). L.Ed.2d 346 might suggest that reliance should not be Plaintiffs cite the Court’s decision Neder required to establish a civil RICO claim as support for the proposition that reliance when the predicate alleged acts are mail or is an inappropriate element in civil RICO fraud, our circuit has concluded oth- actions upon based mail or wire fraud. erwise. Although may quarrel with the so doing, plaintiffs rely exclusively upon a soundness of that conclusion, we must ac- single statement in the Court’s extensive knowledge that precedent from the crimi- opinion, Neder namely, the Court’s obser- nal context and Neder in particular do not vation that the common law’s requirement preclude the inclusion of an additional ele- of justifiable reliance “plainly ha[s] no ment for a plaintiffs civil claim. place in the federal fraud statutes.” 527 24-25, at Neder' s 119 S.Ct. 1827. irrelevance to Although the matter plaintiffs place great before us becomes emphasis on upon clear this one closer re statement, we deem view the reliance requirement’s remark insuffi- place cient to warrant a within reversal of the larger Sixth civil Circuit RICO jurispruden

precedent. Neder is a tial framework. criminal case that The law is clear that once speaks to the elements a civil bank, plaintiff criminal has made the neces mail, and wire fraud sary under 18 showing of U.S.C. a RICO violation under 18 1344, §§ 1341, and § 1962, U.S.C. acts he must still meet those for the criminal RICO charges particular there. requirements imposed pri on at 119 S.Ct. 1827. vate parties reiterates pursuing remedies under a common understanding of elements including demonstrating RICO of these federal criminal statutes over a standing by showing causation. Holmes v. long period of time. Indeed, the Court’s Secs. Investor Prot. Corp., passing comment reflects the law in our 268-69, 112 117 L.Ed.2d 532 circuit since at see, least e.g., Hyney (noting proximate that causation is Epstein v. United 174 F.2d 765- requirement for claims, civil RICO various (6th Cir.1949), does contain language sug- panels of our court have reaffirmed the re- gesting that criminal mail fraud requires that quirement. panels Those were free impose someone actually have been defrauded. a requirement reliance upon plain- civil RICO However, Epstein simply is wrong and con- tiffs even absent Bender and were doubtless trary to prior precedent. our Subsequent aware that reliance is required for federal panels were thus under no obligation to fol- criminal mail or wire fraud. The dissent’s low it. See City Dearborn, v. Habich position requires us to assume that the re- F.3d (6th Cir.2003). 530 n. 2 The dis- peated articulation of a requirement sent contends that because upon Bender relied in our civil RICO caselaw was the work of a Epstein, a agree error, case we was in may we court unaware of the principle basic that reli- disregard subsequent all cases espousing the ance is element of criminal mail principle articulated in Bender. disagree. We wire fraud. We are unable to Although embrace this Epstein may provided have a cita- assumption. tion for the initial case outlining the reliance Although we disagree. We risprudence. reason “by harm to demonstrate required in statement Court’s recognize Dis- actions); also Cent. see wrongful of’ reading of generous (assuming endorses Beer, at 184 Sedima tribs. of no mandate for acts of find pled provisions, plaintiffs RICO’s arguendo but precedent. existing particularity of our fraud reversal mail and appropriate judgment summary finding rely on Procter & also seek Plaintiffs of evidence absence because 242 F.3d 589 Amway Corp., v.Co. Gamble the vic- representations made defendant Telecom, Cir.2001), (5th Mid Atlantic any state- “relied on victim and that tim Inc., Services, Long Distance v. Inc. detriment”). As to its or omission ment Cir.1994), cases which Constr., LLC in Chaz explained this court sought relief under plaintiffs corporate determined Codell, have cases our competitor by a directed for fraud ability to standing is part of RICO Although the customers. at the alleged any demonstrate ex- a more adopted cases both courts 735, 738 Fed.Appx. wrongful conduct. causation, permitting view pansive Distribs., 5 Cent. (citing or wire upon mail based 184). at basis form the party to a third at directed eliminating a basis find do we Nor at claim, see for a in the the reliance holds, 263,2 case neither Sedima, a case ad- Court’s seeking that a suggest, doc- in RICO issue separate dressing provisions RICO’s remedy under directed There, trine. any al- upon prove not bound noting Con- broadly,” read is to “RICO Indeed, representation. leged fraudulent lan- “self-consciously expansive gress’s maintained to have seem both courts and its di- approach” overall guage reliance, while proving necessity of liberally construed “be rection satisfy party to by a third reliance allowing Id. at purpose.” remedial its to effectuate Atlantic, 18 Mid See requirement. insist Plaintiffs 498, 3275. 105 S.Ct. of the (deferring resolution at F.3d 264 disposal compels language general discov- completion of until issue ju- our RICO the reliance challenge to a appeal is limited notice rejected ap- tiffs' explicitly has court Our 2005, 15, July order court’s target district plaintiff be the requiring that proach, It to dismiss. Distribs., motion defendants' See, granting e.g., Cent. any alleged fraud. court’s district mention no contains ("[T]he make must defendant at 5 184 F.3d 2005, leave 22, denying them order July to the of fact omission or statement false properly did Because amend. fraud or of wire a claim support plaintiff to order, we do address July 22 appeal the a RICO act for predicate as a fraud mail actions. court's propriety of the mail or connected [T]he claim.... 3(c)(1)(B) (noting that notice R.App. P. Fed. misrepresentations or involve fraud must wire judgment, or- “designate the appeal must defendant flowing from the omissions appealed....”); der, being part thereof were other- our caselaw Even plaintiff.”). if Inc., Servs., Mgmt. v. Universal United States this case. wise, result in not alter it would (not- 750, F.3d Corp., 191 original com- their concede Plaintiffs appellant "[i]f an rule” ing “general allegations of reliance no plaint contained determina- specific designate ... chooses to chal- seek appeal, party. On a third sim- than appeal-rather 2005, notice 22, in his denial tions lenge the district court's judgment-only the entire ply appealing from amended leave file of their motion appeal”) may raised on specified issues fil- the amended They insist that complaint. and brack- omitted (internal marks quotation allega- sufficient have contained would ing original). However, plain- ets third-party reliance. tions .05

ery); Gamble, Procter & quires plaintiff to show reasonable reli- (“[I]f ance.”) (internal P & G’s customers relied on the quotation marks omit- ted).3 in making fraudulent rumor decisions to boycott P products, & G this reliance suf- conclude, We accordingly, fices to proximate causation.”); show see we respect must our court’s precedent re Tx, also Sandwich Inc. v. Reliance Chef of quiring a civil plead his Nat’l Indem. Ins. upon any alleged misrepresenta (5th Cir.2003) (observing that in Procter & tion when acts are mail or Gamble, court held that though “even fraud. Even if accept Procter & Gamble had not relied on the that our view jurisprudence has fraud, if its customers had done so in gone astray in imposing a require deciding boycott products, its this reb- ment on pursuing private actions anee could fall within the exception narrow 1964(c), our mere belief that a carved out in Summit [Props., Inc. v. prior case was wrongly decided is insuffi Hoechst Corp., Celanese 214 F.3d 556 permit cient to reversal of the decision of a Cir.2000)] and would suffice to proxi- show previous panel. See City Darrah v. Oak cause”). mate We think it noteworthy that Park, (6th Cir.2001). both the Fourth and Fifth Circuits have Absent a clear directive from the Supreme expressly since reaffirmed the necessity of or a decision of this sitting en a showing of rebanee. Chiroprac See Am. banc, we are liberty not at to reverse this Healthcare,

tic Ass’n Trigon Inc. 367 precedent. court’s (4th Cir.2004); Sandwich Chef, 219; also, 319 F.3d at see Bank Based on the foregoing, we con China, LLC, N.Y. Branch v. NBM 359 clude that the district court’s dismissal of (2d Cir.2004), granted cert. plaintiffs’ RICO claims appropriate. part, U.S. 125 S.Ct. 162 Plaintiffs’ complaint contains allegations no (2005), L.Ed.2d dismissed, cert. of reliance them misrepresentations 163 L.Ed.2d 545 by defendants,4 and, under the law of this (2005) (“It is well established in Cir circuit, this this omission is plaintiffs’ fatal to cuit that where mail fraud is the RICO claims. accordingly We affirm the act for claim, a civil RICO proximate the grant court’s of defendants’ motion cause element articulated in Holmes re- to plaintiffs’ dismiss RICO claims.5 3.As to the First Systems Circuit’s decision in complaint Plaintiffs' does allega- contain Loiselle, Management, Inc. v. tions that relied on defendants’ commu- (1st Cir.2002), another nications "to plain [they] case on which the extent suffered the rely, fees, financial having pay tiffs loss of attorney we to acknowledge that the First Cir medical care and mileage.” medical cuit has This for- approach taken different to civil plaintiffs’ mulation defines by refer- liability, concluding that RICO’s terms injury to ence their and does not constitute a require “does not by anyone,” 'reliance' id. at of claim detrimental reliance on defendants’ holding and reading “under a literal alleged misstatements. of presumptive RICO—the interpre choice in tation—nothing more the than criminal viola 5. We need not address the alternative resulting tion and required,” harm is id. grounds by cited the appro- district court as While we the position believe First Circuit’s i dismissal, priate bases for including certain slegitimate, subsequent as a panel applying the plead failure to req- fraud with the circuit, law of this empowered not are to required uisite particularity under Rule 9 of disregard precedent our own in favor of the Federal of Rules Civil Procedure and the views of other circuits. preemption reverse doctrine under most six claim, delay of at services IV. filed, claim as to the responding months the dis challenge also Plaintiffs insuf- owed” of benefits the denial and inflec intentional law their state missal outrageous standard meet ficient to In re claims. distress emotional tion arriving at at 911. Id. conduct. matter, agree, we parties viewing is conclusion, “[t]here noted the court Meridian See Michigan. law of look to out to set insurer] [the no indication Kellman, 197 F.3d v.Co. Ins. Mut. evi- nor does the plaintiffs, harass law, Cir.1999). Michigan Under disclose, of conduct a course dence following ele must show so outra- as characterized fairly be may infliction intentional an establish ments all go beyond ... as to “(1) in character geous extreme claim: distress of emotional (inter- decency....” (2) bounds possible conduct, or reck intent outrageous and omitted). (4) marks causation, quotation emo nal (3) severe lessness, and v. Auto-Owners Roberts distress.” tional plain that the here We conclude N.W.2d Mich. Ins. fraudulent of defendants’ allegations (internal marks omit tiffs’ quotation benefits compensation has worker’s ted). Supreme Court denial Michigan ... as in character outrageous outrageous con are “so “extreme described of decen bounds beyond possible all go as follows: duct” Michigan Court of the Id. Decisions cy.” the defen- enough that been has not It That this conclusion. is confirm which of Appeals an intent acted with dant has “wrongful, criminal, explained that he has or has or tortious itself, benefits, distress, termination inflict emotional bad faith intended support outrageous been charac- sufficiently has his conduct even that ag- of emotional “malice”, degree aor infliction for intentional claim terized Mich. plain- Farley, entitle Atkinson which would gravation distress.” (1988). Even for another tort. damages 431 N.W.2d punitive App. tiff only compensa where found of worker’s Liability has been wrongful denial in char- mo outrageous ulterior so has been some “to further conduct tion benefits go as to defendants,” in degree, as the acter, extreme so tive decency, insufficiently outrageous bounds possible all beyond allege, is here atrocious, and of emotion regarded infliction intentional an support commu- civilized Li in a Michigan intolerable law. utterly al distress in which Inc., case is one Mich. Generally, Rests., nity. v. Taco Bell secki average (1986). facts to 173, 175 For the recitation 749, 389 N.W.2d App. arouse community would plaintiffs’ of the of the reasons, member dismissal actor, and the against his resentment distress infliction emotional intentional exclaim, “Outrageous!” him lead proper. claims (internal marks quotation at 908-09 omitted). V. Supreme Roberts, Michigan the above, we forth set the reasons For “failure insurer’s that a no-fault held Court court. judgment the affirm replacement filing of a the ... to facilitate by supported any ground Act, district court 1011—

McCarran-Ferguson 15 U.S.C. record.”). Anderson, F.3d 460 Williams v. 15. See Cir.2006) ("[T]his may affirm (6th Court MOORE, KAREN NELSON Circuit element to a First, civil-RICO claim. I do Judge, concurring part and dissenting in not panels believe those had authority part. to do so. Although majority claims that Distributors, the Central

I agree with the majority opinion’s con- Services, Blount Financial and Bender clusions regarding state-law “panels were free impose claims for intentional infliction of emotion- requirement upon civil plaintiffs,” al however, distress. I disagree, with the Maj. Op. 1,n. it cites no majority case in opinion’s support of conclusion that civil- this proposition. Indeed, (and I know of no plead must prove) such case. reliance. Accordingly, recently I respectfully dis- rejected a nearly sent. identical proposition it when unanimously reversed our Circuit’s I acknowledge opinions of this adoption of pleading requirements unm court have stated that civil-RICO oored to a Bock, statute’s text. Jones (and plead must prove) See, then reliance. - U.S. -, 127 S.Ct. 166 L.Ed.2d e.g., Beer, Cent. Conn, Distribs. Inc. v. (2007). If courts are not free to im (6th Cir.1993), denied, cert. pose additional pleading requirements that 129 L.Ed.2d Congress intend, did not I cannot see how (1994); Blount Fin. Servs. v. Walter they legitimately can impose new elements. E. Heller & Revising legislation in such a manner is a Cir.1987); Bender v. Southland Corp., 749 task for Congress, courts, not the especial (6th Cir.1984). These ly when the revision is as significant as opinions, however, are not necessarily adding reliance anas element. See id. at binding precedent. To determine whether 926 (“[AJdopting different and more oner they precedential effect, have we must ous pleading rules to deal particular consider origins rule requiring categories of cases should be done through reliance and whether origins those com established rulemaking procedures, and port with preexisting circuit precedent. not on a case-by-case basis Salmi v. Sec’y Servs., Health & Human courts.”). Cir.1985) (court’s earliest on an issue remains con Second, Distributors, Central trolling unless overruled the court sit Services, Blount Financial and Bender ting en banc or unless the United States panels apparently did not believe Supreme Court requires modification of adding were a new element to a civil-RICO decision). claim. Not one of these cases identifies These prior panels could have reached newly as a added element. Nor the conclusion that reliance is an element do opinions any cite cases indicating of a civil-RICO cause of action for mail or that judges of this court are free to add in only one of possible three elements to a congressionally created ways: they could interpreted have (the cause action same proposition for text of mail- statutes; wire-fraud which the majority opinion was unable to (2) they could have interpreted the text of find support). panel If a of this court RICO; (3) or they could have sua decided to were venture into such uncharted terri- sponte to add an element. I consider tory, I would expect the resulting opinion options these in reverse order. explain to why detail panel the thought

After reviewing cases, the I do not think it power had the to revise Congress’s work that prior the panels sponte sua an by added adding element, an as well why the

649 (em- 1961(1)(B) fraud).” § 18 U.S.C. instance to in that prudent it thought panel added). the does RICO contain Nowhere opinions phasis The above-listed do so. this, Considering all Congress intended that suggest explanation. statute no such panels that the unlikely highly applicable it seems a include element, thereby a new to create intended claims. to all civil-RICO amending statute. the judicially have been possibilities two After could not panels Similarly, these pan- the eliminated, clear that it becomes of text the the interpreting been have construed opinions the above-listed els in identifies First, not one statute. RICO as re- statutes wire-fraud mail- and the (or any legislative in RICO any language reliance. prove quiring Congress intended indicating that history) as much. analysis demonstrates Bender’s prove civil-RICO require that Second, forecloses text RICO’s reliance. concluded panel Bender a civil- To establish requirement. such plain dismissed properly 1964(c) § action, 18 U.S.C. of cause plain “the because tiffs (1) plaintiff injury to the an only requires allege what mis complaint [did] tiffs’ § 1962.1 (2) aof’ violation “by reason omissions) (or material representations only that requires here, § 1962 As relevant plaintiffs that made to the Southland fact con- the defendant show plaintiff detri to their reasonably upon relied enterprise an affairs ducted add (emphasis at 1216 ment.” racketeering activi- pattern “through mail-fraud criminal cites a Bender ed). 1962(c). “racke- And § ty.” 18 U.S.C. (citing id. see proposition, for this case turn, to in- is defined activity,” teering 220, 605 VanDyke, v. States United is indictable which “any act clude denied, (6th Cir.), 444 U.S. cert. 225 to mail (relating § 1341 ] U.S.C. ... [18 (1979)),2 425 62 L.Ed.2d 100 S.Ct. (relating § 1343 fraud), ] U.S.C. [and prop- Bender for cited Central Distributors interpreted has Supreme Court 1. The civil- of a anis element that reliance osition language to estab- 1964(c)’s "by of” reason Distribs., Cent. claim. is element proximate causation lish unpub- Nevertheless, is Construction Chaz Sec. Investor v. Holmes claim. a civil-RICO binding us. , accordingly lished Corp., Prot. decision, (1992). how- This L.Ed.2d mail- criminal also cites another 2. Bender way require- ever, any not establish does case; Epstein v. a statement plaintiff relied on that the ment 1949). Epstein appears that Cir. It defendant. offered Bender's source the ultimate may have been 1964(c)’s requirement that Additionally, § VanDyke required, as that reliance assertion "injured in his been plaintiff have civil-RICO VanDyke noted nothing about reliance. says only RICO's establishes property" or business sort involve must some "the schéme S.P.R.L. See Sedima standing requirement. omissions or misrepresentations fraudulent Imrex persons of to deceive reasonably calculated (“the only (1985) has L.Ed.2d 346 comprehension.” prudence and ordinary if, only to the extent recover standing can address Accordingly, it did not at 225. F.2d reliance, that, injured in business his been he has only pertains quoted passage as the constituting viola conduct property mind, reli whereas state the defendant's opinion in unpublished tion”). Although our of mind. plaintiff’s state speaks to the ance v.Codell, Construction, 137 Fed. LLC Chaz propositions: two Epstein for cites Bender (unpublished), mis Appx. (an ele- defraud” (1) showing a "scheme prop Distributors takenly Central cited showing fraud) intent requires of mail standing ment part that reliance osition defraud; "accom- scheme must 738-39, case, Central id. at inquiry in a RICO Bender, designed.” Instead, end plish ] nothing sort. said Distributors which reveals that the Bender panel inter the federal mail- and wire-fraud preted statutes). the federal mail-fraud statute require a showing However, of reliance. The relevant point here is not prior panels of this court had held even Bender wrong (although indeed was it. prosecutions earlier that under the federal wrong). Instead, point is that because fraud require statutes do not a showing of panel Bender interpreted the mail- States, reliance. Norman v. United require statute to a showing of reli- (6th Cir.1939) (a mail-fraud (and ance then applied requirement this in complete offense “is when scheme has case), a civil-RICO its holding created a been pursuance it, devised and when in direct conflict Norman, with Hyney and used”); mails have been Hyney v. which had previously held that the federal States, United 44 F.2d Cir. mail-fraud statute has no require- 1930). ment. Accordingly, applying the federal

Although it seventy-five is over years mail-fraud statute through a civil-RICO old, early holding—that action, reliance is not we are bound to follow Hyney and required under Norman, federal fraud stat not Bender. United States v. utes—has remained constant Abboud, over time. (6th Cir.2006) past decade, (in Within the case cases, conflict between two Court has echoed holding, noting that holding of the earlier case is binding); see requirement “plainly ha[s] no Maj. also Op. n. 1 (noting when place in the federal fraud statutes.” Ned prior contravenes precedent, er v. 24-25, 119 “[subsequent panels ... [a]re under no (1999).3 it”). L.Ed.2d obligation Subse to follow The fact quently, we have also echoed the rule of intervening panels have failed to follow our Norman and Hyney. United States v. earliest published decision (Hyney) is of Daniel, moment, no that, as no case holds (noting that Neder “makes it even clearer though panel one cannot prior overrule a that actual required reliance is not mail panel’s decision, multiple subsequent deci- fraud”). or wire Even the majority opin sions are sufficient to a prior undermine ion (“we as Maj. notes much. Op. at panel’s holding. Accordingly, it is unsur- are aware of no taking contrary prising that the majority opinion musters position” to the rule government support no for its contention that the reli- need not establish in a prosecution ance may stand, notwith- at (quoting Epstein, 765). 174 F.2d at position. ion’s majority Even the recog- itself propositions, These together, taken were the genesis nizes that the requiring of the rule source of Bender's conclusion that reliance is prior reliance conflicts with -precedent and ’ required: designed" the "end could accordingly should not be followed. accomplished unless the relied on representations. majority opinion majority opinion's As 3. The attempt to duck Ned- notes, Epstein’s position regarding accom- er acknowledging that it "is a criminal plishment’ case,” fraud's ultimate ’goal Maj. Op. is unconvincing. As "simply wrong contrary above, to our noted provisions RICO's define precedent," accordingly unworthy of def- acts racketeering activity Maj. erence. Op. n. 1. acts indictable under certain federal criminal Tracing precedents statutes, the civil-RICO back and the list specifically includes origins their "simply wrong” §§ decisions Accordingly, Neder inter- criminal mail-fraud thus preted cases demonstrates the same majority text that the bankruptcy ultimate opin- of the majority purports interpret today. at 2007-08 claim. Id. of a civil-RICO ment because Epstein, in origins standing its (Thomas, J., part).4 in dissenting have reaffirm- our court of panels “various n. 1. Maj. Op. requirement.” the reasons, ed dissent. respectfully I For these prevent exists rule prior-panel The ACKERMAN, Senior A. HAROLD Hy- from departure unjustified Bender’s concurring. Judge, District Norman, ossify Benders not and ney Judge with substantially agree I re- Because Bender rendered. once error opinion separate in her Moore’s conclusion the precedent, to our fused hew construed, not RICO, does properly statutes wire-fraud and mail- criminal demon- plead or a require that circuit, in this things two different mean based in a RICO case civil strate reliance criminal In the on the context. depending mail or wire acts of upon element. reliance context, no they contain a this issue as considering I fraud. Were when But Daniel, at 486. E.g., Sixth impression first matter of statutes these incorporates Congress in so Moore Circuit, join Judge I would action, a cause of into reference However, we do not case. holding in this appears, magically requirement reliance in this issue on this slate face blank contexts, in both notwithstanding demon- majority opinion theAs Circuit. I text. the same interpreting are courts consistently held strates, Court has this permitting rule of construction of no know in civil required reliance is chameleon- such take on text to a statute’s presented claims such fraud claims opin- majority Tellingly, qualities. like many pri- overrule We cannot here. none. ion cites review, and no en banc absent or decisions prece our with inconsistent Bender was of Unit- Supreme Court wire-fraud the mail- interpreting dent panel. reversal compels ed States decided, it was when majori- statutes Therefore, I with the while concur ma today. Yet Gibbons, remains inconsistency agree I with by Judge opinion ty this errant down issue continues that this jority Moore’s exhortation Judge con acknowledging the en banc. . than reviewed be path, rather should To precedent. circuit preexisting flict with element a required is not Reliance begun Bender the error prevent statutes, 18 mail and the federal any fur snowballing from today extended Furthermore, §§ and 1343. U.S.C. the en banc ther, convene we should a claimant requires although a civil-RICO the whether violation,” to reexamine reason “by injured reliance. element of incorporates 1964(c), provision this causation § U.S.C. in which Notably, a case in- necessitate, suggest, does a show whether to decide element. declined corporation 1964(c) v. Ideal required, Anza of’ ing “by reason - -, a defen- whether into Corp., inquiry “entails an Supply Steel (2006), proxi- said to have can be L.Ed.2d dant’s action injuries.” (Jus mately the issue caused to address only Justice Gyp- Am. v. U.S. Ins. Co. Prudential Thomas) express separately to wrote tice (D.N.J.1993) 287, 296 Co., F.Supp. ele- sum is not that reliance his conclusion (D.NJ.1993) (“Specific detrimental majority Indeed, in the judges one of of a necessary element but is a sufficient agree this statement appears to action.”). cause Co. [civil] Ins. Am. Prudential law. F.Supp. Gypsum States J.) (Ackerman, Cir.2006) “Specific detrimental reli (unpublished opinion); Chaz ance ais sufficient but not necessary Constr., ele v.Codell, LLC 735, 137 Fed.Appx. ment (6th of a RICO cause of action.” Cir.2005) 738-39 (unpublished opin Imputation of a reliance ion); element into v. VanDenBroeck CommonPoint RICO, where neither the statute nor the Mortgage (6th 696, Cir. predicate statutory it, crime requires runs 2000). In Yax Construction, and Chaz afoul of the broad purposes of RICO. The different panels of this Court explicitly Supreme Court, in reviewing “Congress’ rejected argument that Neder some self-consciously expansive language and compels how panel reversal of precedent overall approach,” has instructed that rejection requirement. “liberally should be construed to As a “visiting by fireman” sitting desig- effectuate its purposes.” remedial Sedi nation Court, on this I take seriously my ma, Imrex, Co., S.P.R.L. v. 479, 473 U.S. responsibility to apply the law of this Cir- 498, 87 L.Ed.2d 346 cuit, if I would read the law different- (citations omitted). If not by bound prece ly. I hope that the elects, Sixth Circuit dent, join I Judge would reject Moore in point some future, to consider this ing a reliance requirement. issue en banc and reaches what I suggest However, as the majority opinion dis proper conclusion reliance need cusses, the Sixth Circuit has expressly and not be shown in a civil RICO case based on repeatedly held that must show mail or wire fraud. But panel alone reliance to maintain a civil RICO claim cannot make such a ruling, and must in- based See, on mail or wire fraud. e.g., stead follow precedent established in this Beer, Cent. Conn, Distribs. Inc. v. Circuit. Because Plaintiffs here failed to (6th Cir.1993) (collecting plead reliance, and I because concur with cases). respectfully, Most Judge Moore’s the majority opinion’s conclusion that dis- attempts to distinguish these prior cases missal of Plaintiffs’ state-law claims was are unavailing. While I am appropriate, join convinced that I Judge Gibbons in af- these eases misinterpreted RICO, firming the district judgment court’s in its panel lacks the authority entirety. to reverse those

decisions unless mandated by subse-

quent, contrary

Court or en banc review by the entire

Sixth Circuit. Supreme Court,

Neder v. 24-25, (1999), L.Ed.2d 35 UNITED America, STATES of restated the longstanding principle that Plaintiff-Appellee, the federal criminal fraud statutes do not v. require that the Government prove reli- MONCIVAIS, Alberto Defendant- ance, but Neder did not work change Appellant. Neder, law. Long before the federal fraud statutes did No. require reliance, 05-6689.

the Sixth Circuit so recognized. See, has United States Court Appeals, e.g., United States Merklinger, v. Sixth Circuit . cases). (collecting Submitted: June 2007. published both unpublished opin- Neder, ions issued since this Court has Decided and Filed: reiterated the requirement. Yax UPS, 196 Fed.Appx. 381-82

Case Details

Case Name: Brown v. Cassens Transport Co.

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Jul 10, 2007

Citation: 492 F.3d 640

Docket Number: 05-2089

Court Abbreviation: 6th Cir.