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    BRIDGE et al. v. PHOENIX BOND & INDEMNITY CO. et al.
    CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT
    No. 07-210.
    Argued April 14, 2008
    Decided June 9, 2008

      Theodore M. Becker argued the cause for petitioners. With him on the briefs were Peter Buscemi and Joseph Brooks.

      David W. DeBruin argued the cause for respondents. With him on the brief were Ian Heath Gershengorn and Lowell E. Sachnoff.

      Eric D. Miller argued the cause for the United States as amicus curiae in support of respondents. On the brief were former Solicitor General Clement, Assistant Attorney General Fisher, Deputy Solicitor General Dreeben, and Pratik A. Shah.

      Briefs of amici curiae urging reversal were filed for the Chamber of Commerce of the United States of America by Gene C. Schaerr, Linda T. Coberly, Charles B. Klein, Robin S. Conrad, and Amar D. Sarwal; for the McKesson Corp. by Beth S. Brinkmann and Brian R. Matsui; and for the Washington Legal Foundation by Daniel J. Popeo and Richard A. Samp.

      Briefs of amici curiae urging affirmance were filed for the State of Connecticut et al. by Richard Blumenthal, Attorney General of Connecticut, Robert B. Teitelman, Assistant Attorney General, and Barry C. Barnett, and by the Attorneys General for their respective States as follows: Terry Goddard of Arizona, Lisa Madigan of Illinois, Mike McGrath of Montana, Gary K. King of New Mexico, Marc Dann of Ohio, W. A. Drew Edmondson of Oklahoma, and Robert E. Cooper, Jr., of Tennessee; for the International Association of Insurance Receivers by C. Philip Curley, Cynthia H. Hyndman, and Robert S. Michaels; and for the National Association of Shareholder and Consumer Attorneys by Kevin P. Roddy and G. Robert Blakey.

   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 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.

I

Each year the Cook County, Illinois, Treasurer’s Office holds a public auction at which it sells tax liens it has acquired on the property of delinquent taxpayers. 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.

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 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.

But this creates a perverse incentive of its own: Bidders who, in addition to bidding themselves, send agents to bid on their behalf will obtain a disproportionate share of liens. To prevent this kind of manipulation, the county adopted the “Single, Simultaneous Bidder Rule,” which requires each “tax buying entity” to submit bids in its own name and prohibits it from using “apparent agents, employees, or related entities” to submit simultaneous bids for the same parcel. Id., at 67. Upon registering for an auction, each bidder must submit a sworn affidavit affirming that it complies with the Single, Simultaneous Bidder Rule.

Petitioners and respondents are regular participants in Cook County’s tax sales. In July 2005, respondents filed a complaint in the United States District Court for the Northern District of Illinois, contending that petitioners had fraudulently obtained a disproportionate share of liens by violating the Single, Simultaneous Bidder Rule at the auctions held from 2002 to 2005. According to respondents, petitioner Sabre Group, LLC, and its principal Barrett Rochman arranged for related firms to bid on Sabre Group’s behalf and directed them to file false attestations that they complied with the Single, Simultaneous Bidder Rule. Having thus fraudulently obtained the opportunity to participate in the auction, the related firms collusively bid on the same properties at a 0% rate. As a result, when the county allocated liens on a rotating basis, it treated the related firms as independent entities, allowing them collectively to acquire a greater number of liens than would have been granted to a single bidder acting alone. The related firms then purchased the liens and transferred the certificates of purchase to Sabre Group. In this way, respondents allege, petitioners deprived them and other bidders of their fair share of liens and the attendant financial benefits.

Respondents’ complaint contains five counts. Counts I-IV allege that petitioners violated and conspired to violate RICO by conducting their affairs through a pattern of racketeering activity involving numerous acts of mail fraud. In support of their allegations of mail fraud, respondents assert that petitioners “mailed or caused to be mailed hundreds of mailings in furtherance of the scheme,” id., at 49, when they sent property owners various notices required by Illinois law. Count V alleges a state-law claim of tortious interference with prospective business advantage.

On petitioners’ motion, the District Court dismissed respondents’ RICO claims for lack of standing. It observed that “[o]nly [respondents] and other competing buyers, as opposed to the Treasurer or the property owners, would suffer a financial loss from a scheme to violate the Single, Simultaneous Bidder Rule.” App. to Pet. for Cert. 17a. But it concluded that respondents “are not in the class of individuals protected by the mail fraud statute, and therefore are not within the ‘zone of interests’ that the RICO statute protects,” because they “were not recipients of the alleged misrepresentations and, at best were indirect victims of the alleged fraud.” Id., at 18a. The District Court declined to exercise supplemental jurisdiction over respondents’ tortious-interference claim and dismissed it without prejudice.

The Court of Appeals for the Seventh Circuit reversed. It first concluded that “[standing is not a problem in this suit” because respondents suffered a “real injury” when they lost the valuable chance to acquire more liens, and because “that injury can be redressed by damages.” 477 F. 3d 928, 930 (2007). The Court of Appeals next concluded that respondents had sufficiently alleged proximate cause under Holmes v. Securities Investor Protection Corporation, 503 U. S. 258 (1992), and Anza v. Ideal Steel Supply Corp., 547 U. S. 451 (2006), because they (along with other losing bidders) were “immediately injured” by petitioners’ scheme. 477 F. 3d, at 930-932. Finally, the Court of Appeals rejected petitioners’ argument that respondents are not entitled to relief under RICO because they did not receive, and therefore did not rely on, any false statements: “A scheme that injures D by making false statements through the mail to E is mail fraud, and actionable by D through RICO if the injury is not derivative of someone else’s.” Id., at 932.

With respect to this last holding, the Court of Appeals acknowledged that courts have taken conflicting views. By its count, “[t]hree other circuits that have considered this question agree . . . that the direct victim may recover through RICO whether or not it is the direct recipient of the false statements,” ibid, (citing Mid Atlantic Telecom, Inc. v. Long Distance Servs., Inc., 18 F. 3d 260,263-264 (CA4 1994); Systems Management, Inc. v. Loiselle, 303 F. 3d 100,103-104 (CA1 2002); Ideal Steel Supply Corp. v. Anza, 373 F. 3d 251, 263 (CA2 2004)), whereas two Circuits hold that the plaintiff must show that it in fact relied on the defendant’s misrepresentations, 477 F. 3d, at 932 (citing VanDenBroeck v. CommonPoint Mortgage Co., 210 F. 3d 696,701 (CA6 2000); Sikes v. Teleline, Inc., 281 F. 3d 1350, 1360-1361 (CA11 2002)). Compare also Sandwich Chef of Texas, Inc. v. Reliance Nat. Indemnity Ins. Co., 319 F. 3d 205, 223 (CA5 2003) (recognizing “a narrow exception to the requirement that the plaintiff prove direct reliance on the defendant’s fraudulent predicate act... when the plaintiff can demonstrate injury as a direct and contemporaneous result of [a] fraud committed against a third party”), with Appletree Square I, L. P. v. W. R. Grace & Co., 29 F. 3d 1283,1286-1287 (CA8 1994) (requiring the plaintiff to show that it detrimentally relied on the defendant’s misrepresentations).

We granted certiorari, 552 U. S. 1087 (2008), to resolve the conflict among the Courts of Appeals on “the substantial question,” Anza, supra, at 461, whether first-party reliance is an element of a civil RICO claim predicated on mail fraud.

II

We begin by setting forth the applicable statutory provisions. RICO’s private right of action is contained in 18 U. S. C. § 1964(c), which provides in relevant part that “[a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee.” Section 1962 contains RICO’s criminal prohibitions. Pertinent here is § 1962(c), which makes it “unlawful for any person employed by or associated with” an enterprise engaged in or affecting interstate or foreign commerce “to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity.” The term “racketeering activity” is defined to include a host of so-called predicate acts, including “any act which is indictable under . . . section 1341 (relating to mail fraud).” § 1961(1)(B).

The upshot is that RICO provides a private right of action for treble damages to any person injured in his business or property by reason of the conduct of a qualifying enterprise’s affairs through a pattern of acts indictable as mail fraud. Mail fraud, in turn, occurs whenever a person, “having devised or intending to devise any scheme or artifice to defraud,” uses the mail “for the purpose of executing such scheme or artifice or attempting so to do.” §1341. The gravamen of the offense is the scheme to defraud, and any “mailing that is incident to an essential part of the scheme satisfies the mailing element,” Schmuck v. United States, 489 U. S. 705, 712 (1989) (citation and internal quotation marks omitted), even if the mailing itself “contain[s] no false information,” id., at 715.

Once the relationship among these statutory provisions is understood, respondents’ theory of the case is straightforward. They allege that petitioners devised a scheme to defraud when they agreed to submit false attestations of compliance with the Single, Simultaneous Bidder Rule to the county. In furtherance of this scheme, petitioners used the mail on numerous occasions to send the requisite notices to property owners. Each of these mailings was an “act which is indictable” as mail fraud, and together they constituted a “pattern of racketeering activity.” By conducting the affairs of their enterprise through this pattern of racketeering activity, petitioners violated § 1962(c). As a result, respondents lost the opportunity to acquire valuable liens. Accordingly, respondents were injured in their business or property by reason of petitioners’ violation of § 1962(c), and RICO’s plain terms give them a private right of action for treble damages.

Petitioners argue, however, that because the alleged pattern of racketeering activity consisted of acts of mail fraud, respondents must show that they relied on petitioners’ fraudulent misrepresentations. This they cannot do, because the alleged misrepresentations — petitioners’ attestations of compliance with the Single, Simultaneous Bidder Rule — were made to the county, not respondents. The county may well have relied on petitioners’ misrepresentations when it permitted them to participate in the auction, but respondents, never having received the misrepresentations, could not have done so. Indeed, respondents do not even allege that they relied on petitioners’ false attestations. Thus, petitioners submit, they fail to state a claim under RICO.

If petitioners’ proposed requirement of first-party reliance seems to come out of nowhere, there is a reason: Nothing on the face of the relevant statutory provisions imposes such a requirement. Using the mail to execute or attempt to execute a scheme to defraud is indictable as mail fraud, and hence a predicate act of racketeering under RICO, even if no one relied on any misrepresentation. See Neder v. United States, 527 U. S. 1, 24-25 (1999) (“The common-law requirement] of 'justifiable reliance’ . . . plainly ha[s] no place in the [mail, wire, or bank] fraud statutes”). And one can conduct the affairs of a qualifying enterprise through a pattern of such acts without anyone relying on a fraudulent misrepresentation.

It thus seems plain — and indeed petitioners do not dispute — that no showing of reliance is required to establish that a person has violated § 1962(c) by conducting the affairs of an enterprise through a pattern of racketeering activity consisting of acts of mail fraud. See Anza, 547 U. S., at 476 (Thomas, J., concurring in part and dissenting in part) (“Because an individual can commit an indictable act of mail or wire fraud even if no one relies on his fraud, he can engage in a pattern of racketeering activity, in violation of § 1962, without proof of reliance”). If reliance is required, then, it must be by virtue of § 1964(c), which provides the right of action. But it is difficult to derive a first-party reliance requirement from § 1964(c), which states simply that “[a]ny person injured in his business or property by reason of a violation of section 1962” may sue for treble damages. The statute provides a right of action to “[a]ny person” injured by the violation, suggesting a breadth of coverage not easily reconciled with an implicit requirement that the plaintiff show reliance in addition to injury in his business or property.

Moreover, a person can be injured “by reason of” a pattern of mail fraud even if he has not relied on any misrepresentations. This is a case in point. Accepting their allegations as true, respondents clearly were injured by petitioners’ scheme: As a result of petitioners’ fraud, respondents lost valuable liens they otherwise would have been awarded. And this is true even though they did not rely on petitioners’ false attestations of compliance with the county’s rules. Or, to take another example, suppose an enterprise that wants to get rid of rival businesses mails misrepresentations about them to their customers and suppliers, but not to the rivals themselves. If the rival businesses lose money as a result of the misrepresentations, it would certainly seem that they were injured in their business “by reason of” a pattern of mail fraud, even though they never received, and therefore never relied on, the fraudulent mailings. Yet petitioners concede that, on their reading of § 1964(c), the rival businesses would have no cause of action under RICO, Tr. of Oral Arg. 4, even though they were the primary and intended victims of the scheme to defraud.

Lacking textual support for this counterintuitive position, petitioners rely instead on a combination of common-law rules and policy arguments in an effort to show that Congress should be presumed to have made first-party reliance an element of a civil RICO claim based on mail fraud. None of petitioners’ arguments persuades us to read a first-party reliance requirement into a statute that by its terms suggests none.

Ill

A

Petitioners first argue that RICO should be read to incorporate a first-party reliance requirement in fraud cases “under the rule that Congress intends to incorporate the well-settled meaning of the common-law terms it uses.” Neder, supra, at 23. It has long been settled, they contend, that only the recipient of a fraudulent misrepresentation may recover for common-law fraud, and that he may do so “if, but only if ... he relies on the misrepresentation in acting or refraining from action.” 4 Restatement (Second) of Torts §537 (1977). Given this background rule of common law, petitioners maintain, Congress should be presumed to have adopted a first-party reliance requirement when it created a civil cause of action under RICO for victims of mail fraud.

In support of this argument, petitioners point to our decision in Beck v. Prupis, 529 U. S. 494 (2000). There, we considered the scope of RICO’s private right of action for violations of § 1962(d), which makes it “unlawful for any person to conspire to violate” RlCO’s criminal prohibitions. The question presented was “whether a person injured by an overt act in furtherance of a conspiracy may assert a civil RICO conspiracy claim under § 1964(c) for a violation of § 1962(d) even if the overt act does not constitute ‘racketeering activity.’” Id., at 500. Answering this question in the negative, we held that “injury caused by an overt act that is not an act of racketeering or otherwise wrongful under RICO is not sufficient to give rise to a cause of action under § 1964(c) for a violation of § 1962(d).” Id., at 505 (citation omitted). In so doing, we “turn[ed] to the well-established common law of civil conspiracy.” Id., at 500. Because it was “widely accepted” by the time of RlCO’s enactment “that a plaintiff could bring suit for civil conspiracy only if he had been injured by an act that was itself tortious,” id., at 501, we presumed “that when Congress established in RICO a civil cause of action for a person ‘injured ... by reason of’ a ‘conspiracy],’ it meant to adopt these well-established common-law civil conspiracy principles,” id., at 504 (quoting §§ 1964(c), 1962(d); alterations in original). We specifically declined to rely on the law of criminal conspiracy, relying instead on the law of civil conspiracy:

“We have turned to the common law of criminal conspiracy to define what constitutes a violation of § 1962(d), see Salinas v. United States, 522 U. S. 52, 63-65 (1997), a mere violation being all that is necessary for criminal liability. This case, however, does not present simply the question of what constitutes a violation of § 1962(d), but rather the meaning of a civil cause of action for private injury by reason of such a violation. In other words, our task is to interpret §§ 1964(c) and 1962(d) in conjunction, rather than § 1962(d) standing alone. The obvious source in the common law for the combined meaning of these provisions is the law of civil conspiracy.” Id., at 501, n. 6.

Petitioners argue that, as in Beck, we should look to the common-law meaning of civil fraud in order to give content to the civil cause of action § 1964(c) provides for private injury by reason of a violation of § 1962(c) based on a pattern of mail fraud. The analogy to Beck, however, is misplaced. The critical difference between Beck and this case is that in § 1962(d) Congress used a term — “conspiracy]”—that had a settled common-law meaning, whereas Congress included no such term in § 1962(c). Section 1962(c) does not use the term “fraud”; nor does the operative language of §1961(1)(B), which defines “racketeering activity” to include “any act which is indictable under ... section 1341.” And the indictable act under § 1341 is not the fraudulent misrepresentation, but rather the use of the mails with the purpose of executing or attempting to execute a scheme to defraud. In short, the key term in § 1962(c) — “racketeering activity” — is a defined term, and Congress defined the predicate act not as fraud sim/pliciter, but mail fraud — a statutory offense unknown to the common law. In these circumstances, the presumption that Congress intends to adopt the settled meaning of common-law terms has little pull. Cf. Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 U. S. 148, 162 (2008) (rejecting the argument that § 10(b) of the Securities Exchange Act of 1934, 15 U. S. C. § 78j(b), incorporates common-law fraud). There is simply no “reason to believe that Congress would have defined ‘racketeering activity’ to include acts indictable under the mail and wire fraud statutes, if it intended fraud-related acts to be predicate acts under RICO only when those acts would have been actionable under the common law.” Anza, 547 U. S., at 477-478 (Thomas, J., concurring in part and dissenting in part).

Nor does it help petitioners’ cause that here, as in Beck, the question is not simply “what constitutes a violation of §1962[(c)], . . . but rather the meaning of a civil cause of action for private injury by reason of such a violation.” 529 U. S., at 501, n. 6. To be sure, Beck held that a plaintiff cannot state a civil claim for conspiracy under § 1964(c) merely by showing a violation of § 1962(d) and a resulting injury. But in so doing, Beck relied not only on the fact that the term “conspiracy” had a settled common-law meaning, but also on the well-established common-law understanding of what it means to be injured by a conspiracy for purposes of bringing a civil claim for damages. See id., at 501-504. No comparable understanding exists with respect to injury caused by an enterprise conducting its affairs through a pattern of acts indictable as mail fraud. And even the common-law understanding of injury caused by fraud does not support petitioners’ argument. As discussed infra, at 656-657, the common law has long recognized that plaintiffs can recover in a variety of circumstances where, as here, their injuries result directly from the defendant’s fraudulent misrepresentations to a third party.

For these reasons, we reject petitioners’ contention that the “common-law meaning” rule dictates that reliance by the plaintiff is an element of a civil RICO claim predicated on a violation of the mail fraud statute. Congress chose to make mail fraud, not common-law fraud, the predicate act for a RICO violation. And “the mere fact that the predicate acts underlying a particular RICO violation happen to be fraud offenses does not mean that reliance, an element of common-law fraud, is also incorporated as an element of a civil RICO claim.” Anza, swpra, at 476 (Thomas, J., concurring in part and dissenting in part).

B

Petitioners next argue that even if Congress did not make first-party reliance an element of a RICO claim predicated on mail fraud, a plaintiff who brings such a claim must show that it relied on the defendant’s misrepresentations in order to establish the requisite element of causation. In Holmes, we recognized that §1964(c)’s “language can, of course, be read to mean that a plaintiff is injured ‘by reason of’ a RICO violation, and therefore may recover, simply on showing that

the defendant violated § 1962, the plaintiff was injured, and the defendant’s violation was a ‘but for’ cause of plaintiff’s injury.” 503 U. S., at 265-266 (footnote omitted). We nonetheless held that not “all factually injured plaintiffs” may recover under § 1964(c). Id., at 266. Because Congress modeled § 1964(c) on other provisions that had been interpreted to “requir[e] a showing that the defendant’s violation not only was a ‘but for’ cause of his injury, but was the proximate cause as well,” we concluded that § 1964(c) likewise requires the plaintiff to establish proximate cause in order to show injury “by reason of” a RICO violation. Id., at 268.

Proximate cause, we explained, is a flexible concept that does not lend itself to “ ‘a black-letter rule that will dictate the result in every case.’ ” Id., at 272, n. 20 (quoting Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U. S. 519, 536 (1983)). Instead, we “use[d] ‘proximate cause’ to label generically the judicial tools used to limit a person’s responsibility for the consequences of that person’s own acts,” Holmes, 503 U. S., at 268, with a particular emphasis on the “demand for some direct relation between the injury asserted and the injurious conduct alleged,” ibid.; see also Anza, supra, at 461 (“When a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiff’s injuries”). The direct-relation requirement avoids the difficulties associated with attempting “to ascertain the amount of a plaintiff’s damages attributable to the violation, as distinct from other, independent, factors,” Holmes, 503 U. S., at 269; prevents courts from having “to adopt complicated rules apportioning damages among plaintiffs removed at different levels of injury from the violative acts, to obviate the risk of multiple recoveries,” ibid.; and recognizes the fact that “directly injured victims can generally be counted on to vindicate the law as private attorneys general, without any of the problems attendant upon suits by plaintiffs injured more remotely,” id., at 269-270.

Pointing to our reliance on common-law proximate-causation principles in Holmes and Anza, petitioners argue that ‘‘[u]nder well-settled common-law principles, proximate cause is established for fraud claims only where the plaintiff can demonstrate that he relied on the misrepresentation.” Brief for Petitioners 28. In support of this argument, petitioners cite 3 Restatement (Second) of Torts § 548A, which provides that “[a] fraudulent misrepresentation is a legal cause of a pecuniary loss resulting from action or inaction in reliance upon it if, but only if, the loss might reasonably be expected to result from the reliance.” Thus, petitioners conclude, “a plaintiff asserting a civil RICO claim predicated on mail fraud cannot satisfy the proximate cause requirement unless he can establish that his injuries resulted from his reliance on the defendant’s fraudulent misrepresentation.” Brief for Petitioners 28.

Petitioners’ argument is twice flawed. First, as explained above, the predicate act here is not common-law fraud, but mail fraud. Having rejected petitioners’ argument that reliance is an element of a civil RICO claim based on mail fraud, we see no reason to let that argument in through the back door by holding that the proximate-cause analysis under RICO must precisely track the proximate-cause analysis of a common-law fraud claim. “Reliance is not a general limitation on civil recovery in tort; it ‘is a specialized condition that happens to have grown up with common law fraud.’” Anza, 547 U. S., at 477 (Thomas, J., concurring in part and dissenting in part) (quoting Systems Management, 303 F. 3d, at 104). That “specialized condition,” whether characterized as an element of the claim or as a prerequisite to establishing proximate causation, simply has no place in a remedial scheme keyed to the commission of mail fraud, a statutory offense that is distinct from common-law fraud and that does not require proof of reliance.

Second, while it may be that first-party reliance is an element of a common-law fraud claim, there is no general common-law principle holding that a fraudulent misrepresentation can cause legal injury only to those who rely on it. The Restatement provision cited by petitioners certainly does not support that proposition. It provides only that the plaintiff’s loss must be a foreseeable result of someone’s reliance on the misrepresentation. It does not say that only those who rely on the misrepresentation can suffer a legally cognizable injury. And any such notion would be contradicted by the long line of cases in which courts have permitted a plaintiff directly injured by a fraudulent misrepresentation to recover even though it was a third party, and not the plaintiff, who relied on the defendant’s misrepresentation. Indeed, so well established is the defendant’s liability in such circumstances that the Restatement (Second) of Torts sets forth as a “[g]eneral [principle” that “[o]ne who intentionally causes injury to another is subject to liability to the other for that injury, if his conduct is generally culpable and not justifiable under the circumstances.” § 870. As an illustration, the Restatement provides the example of a defendant who “seeks to promote his own interests by telling a known falsehood to or about the plaintiff or his product.” Id., Comment h (emphasis added). And the Restatement specifically recognizes “a cause of action” in favor of the injured party where the defendant “defrauds another for the purpose of causing pecuniary harm to a third person.” Id., § 435A, Comment a. Petitioners’ contention that proximate cause has traditionally incorporated a first-party reliance requirement for claims based on fraud cannot be reconciled with these authorities.

Nor is first-party reliance necessary to ensure that there is a sufficiently direct relationship between the defendant’s wrongful conduct and the plaintiff’s injury to satisfy the proximate-cause principles articulated in Holmes and Anza. Again, this is a case in point. Respondents’ alleged injury— the loss of valuable liens — is the direct result of petitioners’ fraud. It was a foreseeable and natural consequence of petitioners’ scheme to obtain more liens for themselves that other bidders would obtain fewer liens. And here, unlike in Holmes and Anza, there are no independent factors that account for respondents’ injury, there is no risk of duplicative recoveries by plaintiffs removed at different levels of injury from the violation, and no more immediate victim is better situated to sue. Indeed, both the District Court and the Court of Appeals concluded that respondents and other losing bidders were the only parties injured by petitioners’ misrepresentations. App. to Pet. for Cert. 17a; 477 F. 3d, at 931. Petitioners quibble with that conclusion, asserting that the county would be injured too if the taint of fraud deterred potential bidders from participating in the auction. But that eventuality, in contrast to respondents’ direct financial injury, seems speculative and remote.

Of course, none of this is to say that a RICO plaintiff who alleges injury “by reason of” a pattern of mail fraud can prevail without showing that someone relied on the defendant’s misrepresentations. Cf. Field v. Mans, 516 U. S. 59, 66 (1995) (“No one, of course, doubts that some degree of reliance is required to satisfy the element of causation inherent in the phrase ‘obtained by’” in 11 U. S. C. §523(a)(2)(A), which prohibits the discharge of debts for money or property “obtained by” fraud). In most cases, the plaintiff will not be able to establish even but-for causation if no one relied on the misrepresentation. If, for example, the county had not accepted petitioners’ false attestations of compliance with the Single, Simultaneous Bidder Rule, and as a result had not permitted petitioners to participate in the auction, respondents’ injury would never have materialized. In addition, the complete absence of reliance may prevent the plaintiff from establishing proximate cause. Thus, for example, if the county knew petitioners’ attestations were false but nonetheless permitted them to participate in the auction, then arguably the county’s actions would constitute an intervening cause breaking the chain of causation between petitioners’ misrepresentations and respondents’ injury.

Accordingly, it may well be that a RICO plaintiff alleging injury by reason of a pattern of mail fraud must establish at least third-party reliance in order to prove causation. “But the fact that proof of reliance is often used to prove an element of the plaintiff’s cause of action, such as the element of causation, does not transform reliance itself into an element of the cause of action.” Anza, 547 U. S., at 478 (Thomas, J., concurring in part and dissenting in part). Nor does it transform first-party reliance into an indispensable requisite of proximate causation. Proof that the plaintiff relied on the defendant’s misrepresentations may in some cases be sufficient to establish proximate cause, but there is no sound reason to conclude that such proof is always necessary. By the same token, the absence of first-party reliance may in some cases tend to show that an injury was not sufficiently direct to satisfy § 1964(c)’s proximate-cause requirement, but it is not in and of itself dispositive. A contrary holding would ignore Holmes’ instruction that proximate cause is generally not amenable to bright-line rules.

C

As a last resort, petitioners contend that we should interpret RICO to require first-party reliance for fraud-based claims in order to avoid the “over-federalization” of traditional state-law claims. In petitioners’ view, respondents’ claim is essentially one for tortious interference with prospective business advantage, as evidenced by count V of their complaint. Such claims have traditionally been handled under state law, and petitioners see no reason why Congress would have wanted to supplement traditional state-law remedies with a federal cause of action, complete with treble damages and attorney’s fees, in a statute designed primarily to combat organized crime. See Anza, supra, at 471-475 (Thomas, J., concurring in part and dissenting in part); Beck, 529 U. S., at 496-497. A first-party reliance requirement, they say, is necessary “to prevent garden-variety disputes between local competitors (such as this case) from being converted into federal racketeering actions.” Reply Brief for Petitioners 3.

Whatever the merits of petitioners’ arguments as a policy matter, we are not at liberty to rewrite RICO to reflect their — or our — views of good policy. We have repeatedly refused to adopt narrowing constructions of RICO in order to make it conform to a preconceived notion of what Congress intended to proscribe. See, e. g., National Organization for Women, Inc. v. Scheidler, 510 U. S. 249, 252 (1994) (rejecting the argument that “RICO requires proof that either the racketeering enterprise or the predicate acts of racketeering were motivated by an economic purpose”); H. J. Inc. v. Northwestern Bell Telephone Co., 492 U. S. 229, 244 (1989) (rejecting “the argument for reading an organized crime limitation into RICO’s pattern concept”); Sedima, S. P. R. L. v. Imrex Co., 473 U. S. 479, 481 (1985) (rejecting the view that RICO provides a private right of action “only against defendants who had been convicted on criminal charges, and only where there had occurred a ‘racketeering injury’ ”).

We see no reason to change course here. RICO’s text provides no basis for imposing a first-party reliance requirement. If the absence of such a requirement leads to the undue proliferation of RICO suits, the “correction must lie with Congress.” Id., at 499. “It is not for the judiciary to eliminate the private action in situations where Congress has provided it.” Id., at 499-500.

IV

For the foregoing reasons, we hold that a plaintiff asserting a RICO claim predicated on mail fraud need not show, either as an element of its claim or as a prerequisite to establishing proximate causation, that it relied on the defendant’s alleged misrepresentations. Accordingly, the judgment of the Court of Appeals is affirmed.

It is so ordered.

       Because this ease arises from the District Court’s grant of petitioners’ motion to dismiss, we “accept as true all of the factual allegations contained in [respondents’] complaint.” Erickson v. Pardus, 551 U. S. 89, 94 (2007) (per curiam).

       The Single, Simultaneous Bidder Rule provides that “one tax buying entity (principal) may not have its/his/her/their actual or apparent agents, employees, or related entities, directly or indirectly register under multiple registrations for the intended or perceived purpose of having more than one person bidding at the tax sale at the same time for the intended or perceived purpose of increasing the principal’s likelihood of obtaining a successful bid on a parcel.” App. 67. The rule defines “Related Bidding Entity” as “any individual, corporation, partnership, joint venture, limited liability company, business organization, or other entity that has a shareholder, partner, principal, officer, general partner or other person or entity having an ownership interest in common with, or contractual relationship with, any other registrant.” Ibid. It further provides that “[t]he determination of whether registered entities are related, so as to prevent the entities from bidding at the same time, is in the sole and exclusive discretion of the Cook County Treasurer or her designated representatives.” Ibid.

       Respondents’ complaint does not elaborate on the county’s rotational system. The Court of Appeals described it as follows: “If X bids 0% on ten parcels, and each parcel attracts five bids at that penalty rate, then the County awards X two of the ten parcels. Winners share according to the ratio of their bids to other identical bids.” 477 F. 3d 928, 929 (CA7 2007). Petitioners object that this description is not supported by the record and inappropriately “inject[s] into the ease an element of mathematical certainty that is missing from the complaint itself.” Reply Brief for Petitioners 20. While a precise understanding of the county’s system may be necessary to calculate respondents’ damages, nothing in our disposition turns on this issue. For present purposes, it suffices that respondents allege they “suffered the loss of property related to the liens they would have been able to acquire, and the profits flowing therefrom, had [petitioners] not implemented their scheme and acquired liens in excess of their appropriate share through their violation of the County Rule.” App. 50.

       The Court considered a civil RICO claim predicated on mail fraud in its recent decision in Anza, 547 U. S. 451. There the Court held that proximate cause is a condition of recovery under 18 U. S. C. § 1962(c). The Court did not address the question whether reliance by the plaintiff is a required element of a RICO claim, the matter now before us. Cf. 547 U. S., at 475-478 (Thomas, J., concurring in part and dissenting in part) (reaching the question and concluding that reliance is not an element of a civil RICO claim based on mail fraud).

       Applying these principles in Holmes, the Court held that the Securities Investor Protection Corporation (SIPC) could not recover for injuries caused by a stock-manipulation scheme that prevented two broker-dealers from meeting obligations to their customers, thereby triggering SIPC’s duty to reimburse the customers. 503 U. S., at 270-274. And in Anza, the Court applied the principles of Holmes to preclude a company from recovering profits it allegedly lost when a rival business was able to lower its prices because it failed to charge the requisite sales tax on cash sales. 547 U. S., at 456-461.

       In addition to 3 Restatement (Second) of Torts § 548A (1976), petitioners cite Comment a to that section, which provides that “[ejausation, in relation to losses incurred by reason of a misrepresentation, is a matter of the recipient’s reliance in fact upon the misrepresentation in taking some action or in refraining from it.” Like § 548A itself, however, the comment does not support petitioners’ argument. Of course, a misrepresentation can cause harm only if a recipient of the misrepresentation relies on it. But that does not mean that the only injuries proximately caused by the misrepresentation are those suffered by the recipient.

       Such eases include Rice v. Manley, 66 N. Y. 82 (1876) (permitting plaintiffs who had arranged to buy a large quantity of cheese to recover against a defendant who induced the vendor to sell him the cheese by falsely representing to the vendor that plaintiffs no longer wished to purchase it); and Gregory v. Brooks, 35 Conn. 437 (1868) (permitting plaintiff wharf owner to recover against a defendant who, in order to deprive plaintiff of business, misrepresented himself to be a superintendent of wharves and ordered a vessel unloading at plaintiff’s wharf to leave); see also Brief for Respondents 26-29 (collecting cases).
      Petitioners argue that these cases are irrelevant because they would be treated today as specialized torts, such as wrongful interference with contractual relations, rather than as common-law fraud. See, e. g., 4 Restatement (Second) of Torts § 767, Comment c (recognizing that “one [may be] liable to another for intentional interference with economic relations by inducing a third person by fraudulent misrepresentation not to do business with the other”). But petitioners miss the point. The cases are not cited as evidence that common-law fraud can be established without showing first-party reliance. Rather, they — along with the Restatement’s recognition of specialized torts based on third-party reliance — show that a fraudulent misrepresentation can proximately cause actionable injury even to those who do not rely on the misrepresentation.


source: Caselaw Access Project

author: Justice Alito

license: Public Domain

text:
    ALLISON ENGINE CO., INC., et al. v. UNITED STATES ex rel. SANDERS et al.
    CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
    No. 07-214.
    Argued February 26, 2008
    Decided June 9, 2008

      Theodore B. Olson argued the cause for petitioners. With him on the briefs were Matthew D. McGill, Amir C. Tayrani, Glenn V. Whitaker, Victor A. Walton, Jr., Michael J. Bronson, Lawrence R. Elleman, William A. Posey, W. Jeffrey Sefton, James J. Gallagher, and David P. Kamp.

      James B. Helmer, Jr., argued the cause for respondents. With him on the brief were Paul B. Martins and Robert M. Rice.

      Malcolm L. Stewart argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were former Solicitor General Clement, Acting Assistant Attorney General Bucholtz, Deputy Solicitor General Kneedler, Douglas N. Letter, and Thomas M. Bondy.

      Briefs of amici curiae urging reversal were filed for the Chamber of Commerce of the United States of America et al. by Jonathan S. Franklin, Caroline M. Mew, Robin S. Conrad, and Amar D. Sarwal; for Continental Common, Inc., et al. by Thomas V. Murto III; and for the Washington Legal Foundation by John T. Boese, Daniel J. Popeo, and Paul D. Kamenar.

      Briefs of amici curiae urging affirmance were filed for Grayson & Kubli, P. C., by Alan M. Grayson and Victor A. Kubli; for the Taxpayers Against Fraud Education Fund by David C. Frederick; for Marsha Farmer by Brantly Harris and James W. McCartney; for Senator Charles E. Grassley by Frederick M. Morgan, Jr.; and for Joel D. Hesch by Mr. Hesch, pro se.

   Justice Alito

delivered the opinion of the Court.

The False Claims Act (FCA) imposes civil liability on any person who knowingly uses a “false record or statement to get a false or fraudulent claim paid or approved by the Government,” 31 U. S. C. § 3729(a)(2), and any person who “conspires to defraud the Government by getting a false or fraudulent claim allowed or paid,” § 3729(a)(3). We granted review in this case to decide what a plaintiff asserting a claim under these provisions must show regarding the relationship between the making of a “false record or statement” and the payment or approval of “a false or fraudulent claim ... by the Government.”

Contrary to the decision of the Court of Appeals below, we hold that it is insufficient for a plaintiff asserting a § 3729(a)(2) claim to show merely that “[t]he false statement’s use . . . resulted] in obtaining or getting payment or approval of the claim,” 471 F. 3d 610, 621 (CA6 2006), or that “government money was used to pay the false or fraudulent claim,” id., at 622. Instead, a plaintiff asserting a § 3729(a)(2) claim must prove that the defendant intended that the false record or statement be material to the Government’s decision to pay or approve the false claim. Similarly, a plaintiff asserting a claim under § 3729(a)(3) must show that the conspirators agreed to make use of the false record or statement to achieve this end.

I

In 1985, the United States Navy entered into contracts with two shipbuilders, Bath Iron Works and Ingalls Shipbuilding (together the shipyards), to build a new fleet of Arleigh Burke class guided missile destroyers. Each destroyer required three generator sets (Gen-Sets) to supply all of the electrical power for the ship. The shipyards subcontracted with petitioner Allison Engine Company, Inc. (Allison Engine), formerly a division of General Motors, to build 90 Gen-Sets to be used in over 50 destroyers. Allison Engine in turn subcontracted with petitioner General Tool Company (GTC) to assemble the Gen-Sets, and GTC subcontracted with petitioner Southern Ohio Fabricators, Inc. (SOFCO), to manufacture bases and enclosures for the Gen-Sets. The Navy paid the shipyards an aggregate total of $1 billion for each new destroyer. Of that, Allison Engine was paid approximately $3 million per Gen-Set; GTC was paid approximately $800,000 per Gen-Set; and SOFCO was paid over $100,000 per Gen-Set. All of the funds used to pay petitioners ultimately came from the Federal Treasury.

The Navy’s contract with the shipyards specified that every part of each destroyer be built in accordance with the Navy’s baseline drawings and military standards. These requirements were incorporated into each of petitioners’ subcontracts. In addition, the contracts required that each delivered Gen-Set be accompanied by a certificate of conformance (COC) certifying that the unit was manufactured in accordance with the Navy’s requirements.

In 1995, Roger L. Sanders and Roger L. Thacker (hereinafter respondents), former employees of GTC, brought suit in the District Court for the Southern District of Ohio as qui tarn relators seeking to recover damages pursuant to § 3729, which renders liable any person who “knowingly presents, or causes to be presented, to an officer or employee of the United States Government... a false or fraudulent claim for payment or approval,” § 3729(a)(1); any person who “knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government,” § 3729(a)(2); and any person who “conspires to defraud the Government by getting a false or fraudulent claim allowed or paid,” § 3729(a)(3).

Respondents alleged that the invoices submitted to the shipyards by Allison Engine, GTC, and SOFCO fraudulently sought payment for work that had not been done in accordance with contract specifications. Specifically, respondents claimed that the gearboxes installed by Allison Engine in the first 52 Gen-Sets were defective and leaked oil; that GTC never conducted a required final quality inspection for approximately half of the first 67 Gen-Sets; and that the SOFCO welders who worked on the first 67 Gen-Sets did not meet military standards. Respondents also claimed that petitioners issued COCs claiming falsely that the Gen-Sets had been built to the contractually required specifications even though petitioners knew that those specifications had not been met.

The case was tried to a jury. At trial, respondents introduced evidence that petitioners had issued COCs that falsely stated that their work was completed in compliance with the Navy’s requirements and that they had presented invoices for payment to the shipyards. Respondents did not, however, introduce the invoices submitted by the shipyards to the Navy. At the close of respondents’ case, petitioners moved for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(a). Petitioners asserted that no reasonable jury could find a violation under §3729 because respondents had failed to adduce any evidence that a false or fraudulent claim had ever been presented to the Navy. The District Court granted petitioners’ motion. No. l-:95-cv-970, 2005 WL 713569 (SD Ohio, Mar. 11, 2005). The court rejected respondents’ argument that they did not have to present evidence that a claim had been submitted to the Navy because they showed that Government funds had been used to pay the invoices that were presented to the shipyards. The District Court concluded that, absent proof that false claims were presented to the Government, respondents’ evidence was legally insufficient under the FCA. Id., at *10.

On appeal, a divided panel of the United States Court of Appeals for the Sixth Circuit reversed the District Court in relevant part. 471 F. 3d 610 (2006). The majority agreed with the District Court that liability under § 3729(a)(1) requires proof that a false claim was presented to the Government. However, the Court of Appeals held that the District Court erred in granting petitioners’ motion for judgment as a matter of law with respect to respondents’ §§ 3729(a)(2) and (3) claims. The Court of Appeals held that such claims do not require proof of an intent to cause a false claim to be paid by the Government. Rather, it determined that proof of an intent to cause a false claim to be paid by a private entity using Government funds was sufficient. In so holding, the Court of Appeals recognized that its decision conflicted with United States ex rel. Totten v. Bombardier Corp., 380 F. 3d 488 (CADC 2004) (Totten), cert, denied, 544 U. S. 1032 (2005).

We granted certiorari to resolve the conflict over the proper interpretation of §§ 3729(a)(2) and (3). 552 U. S. 989 (2007).

II

A

We turn first to § 3729(a)(2), and “[w]e start, as always, with the language of the statute.” Williams v. Taylor, 529 U. S. 420, 431 (2000). Section 3729(a)(2) imposes civil liability on any person who “knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government.”

The interpretation of § 3729(a)(2) that was adopted by the Court of Appeals — and that is endorsed by respondents and the Government — impermissibly deviates from the statute’s language. In the view of the Court of Appeals, it is sufficient for a § 3729(a)(2) plaintiff to show that a false statement resulted in the use of Government funds to pay a false or fraudulent claim. 471 F. 3d, at 621-622. Under subsection (a)(2), however, the defendant must make the false record or statement “to get” a false or fraudulent claim “paid or approved by the Government.” “[T]o get” denotes purpose, and thus a person must have the purpose of getting a false or fraudulent claim “paid or approved by the Government” in order to be liable under § 3729(a)(2). Additionally, getting a false or fraudulent claim “paid ... by the Government” is not the same as getting a false or fraudulent claim paid using “government funds.” Id., at 622. Under §3729(a)(2), a defendant must intend that the Government itself pay the claim.

Eliminating this element of intent, as the Court of Appeals did, would expand the FCA well beyond its intended role of combating “fraud against the Government.” See Rainwater v. United States, 356 U. S. 590, 592 (1958) (emphasis added). As the District of Columbia Circuit pointed out, the reach of § 3729(a)(2) would then be “almost boundless: for example, liability could attach for any false claim made to any college or university, so long as the institution has received some federal grants — as most of them do.” Totten, supra, at 496.

B

Defending the Court of Appeals’ interpretation of § 3729(a)(2), the Government contends that the phrase “paid ... by the Government” does not mean that the Government must literally pay the bill. The Government maintains that it is customary to say that the Government pays a bill when a person who has received Government funds uses those funds to pay a bill. The Government provides this example: “‘[W]hen a student says his college living expenses are “paid by” his parents, he typically does not mean that his parents send checks directly to his creditors. Rather, he means that his parents are the ultimate source of the funds he uses to pay those expenses.’ ” Brief for United States as Amicus Curiae 9 (quoting Totten, supra, at 506 (Garland, J., dissenting)).

This example is unpersuasive because it involves a colloquial usage of the phrase “paid by” — a usage that is not customarily employed in more formal contexts. For example, if a federal employee who receives all of his income from the Government were asked in a formal inquiry to reveal who paid for, say, his new car or a vacation, the employee would not say that the Federal Government had footed the bill. In statutory drafting, where precision is both important and expected, the sort of colloquial usage on which the Government relies is not customary.

The Government is also wrong in arguing that the definition of the term “claim” in § 3729(c) means that § 3729(a)(2)’s use of the phrase “paid ... by the Government” should not be read literally. Under this definition, a request for money or property need not be made directly to the Government in order to constitute a “claim.” Instead, a “claim” may include a request or demand that is made to “a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.” § 3729(c). This definition of the word “claim” does not support the Government’s argument because it does not alter the meaning of the phrase “by the Government” in § 3729(a)(2). Under §3729(c)’s definition of “claim,” a request or demand may constitute a “claim” even if the request is not made directly to the Government, but under § 3729(a)(2) it is still necessary for the defendant to intend that a claim be “paid ... by the Government” and not by another entity.

c

This does not mean, however, as petitioners suggest, see Reply Brief 1, that 13729(a)(2) requires proof that a defendant’s false record or statement was submitted to the Government. While § 3729(a)(1) requires a plaintiff to prove that the defendant “presented] ” a false or fraudulent claim to the Government, the concept of presentment is not mentioned in § 3729(a)(2). The inclusion of an express presentment requirement in subsection (a)(1), combined with the absence of anything similar in subsection (a)(2), suggests that Congress did not intend to include a presentment requirement in subsection (a)(2). “[W]hen Congress includes particular language in one section of a statute but omits it in another section of the same Act; it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Barnhart v. Sigmon Coal Co., 534 U. S. 438,452 (2002) (internal quotation marks omitted).

What § 3729(a)(2) demands is not proof that the defendant caused a false record or statement to be presented or submitted to the Government but that the defendant made a false record or statement for the purpose of getting “a false or fraudulent claim paid or approved by the Government.” Therefore, a subcontractor violates § 3729(a)(2) if the subcontractor submits a false statement to the prime contractor intending for the statement to be used by the prime contractor to get the Government to pay its claim. If a subcontractor or another defendant makes a false statement to a private entity and does not intend the Government to rely on that false statement as a condition of payment, the statement is not made with the purpose of inducing payment of a false claim “by the Government.” In such a situation, the direct link between the false statement and the Government’s decision to pay or approve a false claim is too attenuated to establish liability. Recognizing a cause of action under the FCA for fraud directed at private entities would threaten to transform the FCA into an all-purpose antifraud statute. Our reading of § 3729(a)(2), based on the language of the statute, gives effect to Congress’ efforts to protect the Government from loss due to fraud but also ensures that “a defendant is not answerable for anything beyond the natural, ordinary and reasonable consequences of his conduct.” Anza v. Ideal Steel Supply Corp., 547 U. S. 451, 470 (2006) (internal quotation marks omitted).

Ill

Respondents also brought suit under § 3729(a)(3), which makes liable any person who “conspires to defraud the Government by getting a false or fraudulent claim allowed or paid.” Our interpretation of this language is similar to our interpretation of the language of § 3729(a)(2). Under § 3729(a)(3), it is not enough for a plaintiff to show that the alleged conspirators agreed upon a fraud scheme that had the effect of causing a private entity to make payments using money obtained from the Government. Instead, it must be shown that the conspirators intended “to defraud the Government.” Where the conduct that the conspirators are alleged to have agreed upon involved the making of a false record or statement, it must be shown that the conspirators had the purpose of “getting” the false record or statement to bring about the Government’s payment of a false or fraudulent claim. It is not necessary to show that the conspirators intended the false record or statement to be presented directly to the Government, but it must be established that they agreed that the false record or statement would have a material effect on the Government’s decision to pay the false or fraudulent claim.

This reading of subsection (a)(3) is in accord with our decision in Tanner v. United States, 483 U. S. 107 (1987), where we held that a conspiracy to defraud a federally funded private entity does not constitute a “conspiracy to defraud the United States” under 18 U. S. C. § 371. 483 U. S., at 129. In Tanner, the Government argued that a recipient of federal financial assistance and the subject of federal supervision may itself be treated as “the United States.” We rejected this reading of § 371 as having “not even an arguable basis in the plain language of § 371.” Id., at 131. Indeed, we concluded that such an interpretation “would have, in effect, substituted ‘anyone receiving federal financial assistance and supervision’ for the phrase ‘the United States.’ ” Id., at 132. Likewise, the interpretation urged on us by respondents would in effect substitute “paid by Government funds” for the phrase “paid or approved by the Government.” Had Congress intended subsection (a)(3) to apply to anyone who conspired to defraud a recipient of Government funds, it would have so provided.

* * *

Because the decision of the Court of Appeals was based on an incorrect interpretation of §§ 3729(a)(2) and (3), we vacate its judgment and remand the case for further proceedings consistent with this opinion.

It is so ordered.

      This interpretation of § 3729(a)(2) does not render superfluous the portion of § 3729(e) providing that a “claim” may be made to a contractor, grantee, or other recipient of Government funding. This language makes it clear that there can be liability under §§ 3729(a)(1) and (2) where the request or demand for money or property that a defendant presents to a federal officer for payment or approval, § 3729(a)(1), or that a defendant intends “to get . . . paid or approved by the Government,” § 3729(a)(2), may be a request or demand that was originally “made to” a contractor, grantee, or other recipient of federal funds and then forwarded to the Government.

       Section 3729(b) provides that the terms “knowing” and “knowingly” “mean that a person, with respect to information — (1) has actual knowledge of the information; (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information, and no proof of specific intent to defraud is required.” The statutory definition of these terms is easily reconcilable with our holding in this case for two reasons. First, the intent requirement we discern in § 3729(a)(2) derives not from the term “knowingly,” but rather from the infinitive phrase “to get.” Second, § 3729(b) refers to specific intent with regard to the truth or falsity of the “information,” while our holding refers to a defendant’s purpose in making or using a false record or statement.