Full opinion text
MEMORANDUM OPINION AND ORDER MacKENZIE, District Judge. This matter is before the Court on objections to the United States Magistrate Judge’s Report and Recommendation entered on November 19, 1993. I. FACTS AND PROCEDURAL HISTORY The four plaintiffs are purchasers of used cars, who also seek class certification for several thousand used car buyers, who here bring suit against Charlie Falk Auto Wholesalers, Inc. (“Falk”), TranSouth Financial Corporation (“TranSouth”), and JB Collection Corporation (“JB”), alleging violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Fair Debt Collection Practices Act, the Virginia Uniform Commercial Code, the Virginia Consumer Protection Act, common law fraud and conspiracy. The Complaint alleges that the defendants engaged in a scheme, whereby Falk sold used cars to high-risk customers at exorbitant interest rates. These purchases were financed, with security agreements, by Tran-South. When a purchaser defaulted on his loan, TranSouth repossessed the car and sent notice of default to the customer. This notice informed the owner that he could redeem his ear upon payment of the deficiency, but if this deficiency was not paid the ear would be sold at a private sale. The Complaint further alleges that no private sale actually occurred. Instead, pursuant to a written contract between Falk and Tran-South, the cars were transferred, or repurchased, by Falk at deflated prices. Falk then assigned the reacquired loans to JB, its wholly-owned subsidiary, for collection. JB would write a demand letter to the customers for the deficiency, which was based on the TranSouth-Falk repurchase price and the outstanding balance of the loan. If the customer did not pay this amount, JB would file a collection action. Falk would resell the repossessed vehicles. On July 20, 1993, TranSouth moved to dismiss Counts I-IV, the federal RICO claims, for failure to state a claim upon which relief could be granted, and to dismiss Counts VI-VIII, the pendent state claims, for lack of subject-matter jurisdiction. On August 3,1993, Falk and JB, likewise, moved for partial judgment on the pleadings as to Counts I-IV with respect to all plaintiffs, and Count V as to plaintiff Seamster. The matter was designated to a United States Magistrate Judge for the submission of a Report and Recommendation (Report). Following a hearing, the Magistrate Judge granted the motions. The parties then filed objections to various portions of the Report. Oral argument before the district court was had. The Court, having examined the objections filed by both the plaintiffs and defendants and having made de novo findings with respect to the portions objected to, adopts the findings and recommendations set forth in the Report of United States Magistrate Judge Prince which is a monument of clarity. II. DISCUSSION OF AUTHORITY RICO, codified at 18 U.S.C. §§ 1961 to 1968, is unique in that it creates a civil action in favor of an individual who has been injured by a violation of the act. Specifically, the civil section of RICO provides that: Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue ... and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee. 18 U.S.C. § 1964(c) (1988) (emphasis added). The civil RICO claims involved in this lawsuit are based on alleged violations by the defendants of 18 U.S.C. § 1962(a), (c), and (d), which require the plaintiff to prove that the defendants engaged in a “pattern of racketeering activity”. This pattern is defined as two distinct but related acts within a ten year period that are indictable under certain provisions of the federal criminal code. 18 U.S.C. § 1961(5) (1988). The plaintiffs allege that mail fraud forms the predicate acts of this RICO claim. The elements of criminal mail fraud are (1) a scheme to defraud and (2) the mailing of a letter for the purpose of executing the scheme. See Pereira v. United States, 347 U.S. 1, 8-9, 74 S.Ct. 358, 362-63, 98 L.Ed. 435 (1954). A. Reliance Requirement Under Civil RICO The Magistrate Judge, however, dismissed Counts I-IV of the Complaint, the federal RICO claims, because the plaintiffs failed to allege that they detrimentally relied on the mailings sent to them by JB and TranSouth. • This Court agrees. To make out a civil action for damages under § 1964(c) of the RICO statute, the plaintiffs must make two showings: (1) that they have suffered injury to their business or property; and (2) that this injury was caused by the predicate' acts that make up the § 1962 violation—in this case, mail fraud. See Brandenburg v. Seidel, 859 F.2d 1179, 1187 (4th Cir.1988). Specifically, the- plaintiffs allege in their Complaint and briefs that (1) the defendants’ car “churning” scheme amounted to federal mail fraud; (2) the defendants engaged in a pattern of this activity; and (3) this scheme injured the plaintiffs in that they lost thousands of dollars, equity in their cars, and any value in the cars over and. above what was owed on the loans. However, unlike most mail fraud cases that deal with “fraud by deception” and, by their very nature, require an element of reliance on deceptive mailings, the plaintiffs argue that the scheme involved here is one of “fraud by cheating” and that reliance on the mailings is irrelevant and unnecessary. In short, the plaintiffs reason that they were injured by the mail fraud scheme of the defendants and, consequently, they were injured “by reason of a violation of section 1962.” See 18 U.S.C. § 1964(c). Plaintiffs’ argument, however, is directly contradicted by prior opinions of the Fourth Circuit and, to the Court’s knowledge, has not been adopted by any other circuit. In Brandenburg, the Fourth Circuit noted that while it was not necessary to establish detrimental reliance by the victim to make out a criminal violation of the federal mail fraud statute, reliance was “necessary to establish injury to business or property ‘by reason of a predicate act of mail fraud within the meaning of § 1964(c) [civil RICO].” 859 F.2d at 1188 n. 10. This requirement of detrimental reliance was reiterated by the court several years later. See Caviness v. Derand Resources Corp., 983 F.2d 1295, 1305 (4th Cir.1993) (“[A] claim under RICO requires both reliance and damage proximately caused by the violation”). Recently, the Fourth Circuit had an opportunity to address this precise reliance issue in a “fraud by cheating” context but declined. See Mid Atlantic Telecom, Inc. v. Long Distance Services, Inc., 18 F.3d 260, 264 (4th Cir.1994). This Court is in accord with and is bound by the precedent established by this circuit. Because the plaintiffs failed to allege detrimental reliance on the mailings of TranSouth, Falk or JB, the civil RICO claims against these defendants must be DISMISSED. B. Proximate Cause Based on the failure of the plaintiffs to allege detrimental reliance, the Magistrate Judge further found that the Complaint failed to adequately plead that the defendants were the proximate cause of the plaintiffs’ injuries. See Holmes v. Securities Investor Protection Corp., — U.S. -, 112 5.Ct. 1311, 117 L.Ed.2d 532 (1992) (under § 1964(c), RICO plaintiff must allege and prove that his injury was proximately caused by defendants’ unlawful conduct); Brandenburg, 859 F.2d at 1187 (“[A] civil RICO complaint is vulnerable to a motion to dismiss if it fails to allege ... an adequate causal nexus between that injury and the predicate acts of racketeering activity alleged”). This Court agrees. At its heart, civil RICO is merely a statutory tort remedy, requiring both a eause-in-faet relationship as well as “legal” or “proximate” cause between the defendant’s action and the injury. Brandenburg, 859 F.2d at 1189. The latter doctrine involves a policy determination made by the courts, “taking into consideration such factors as the foreseeability of the particular injury, the intervention of other independent causes, and the factual directness of the causal connection.” Id. While the Court concedes that plaintiffs have pled a cause-in-fact, or “but for”, relationship in this case, “such a cause-in-fact connection, standing alone, does not suffice to establish liability.” Id. The Fourth Circuit has adopted a policy that in civil cases where mail fraud forms the predicate acts, detrimental reliance on the mailings by the victims is required to satisfy the causal connection requirement of § 1964(c). See id., at 1188 n. 10. Thus, the RICO claims against the defendants are DISMISSED for failure to allege an adequate causal connection between the plaintiffs’ injuries and the defendants’ conduct. C. Association-in-fact of Corporations as a RICO “Enterprise”. As a preliminary matter, several counts of the Complaint allege an association-in-fact enterprise consisting of TranSouth, Falk and JB. Defendants Falk and JB argue that an association of corporate entities cannot be an “enterprise” for RICO purposes. This Court disagrees. A RICO “ ‘enterprise’ includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” 18 U.S.C. § 1⅜61(4) (1988). While the Fourth Circuit has not ruled on this issue specifically, see Entre Computer Centers, Inc. v. FMG of Kansas City, Inc., 819 F.2d 1279, 1287 (4th Cir.1987), it has upheld a RICO conviction where the enterprise consisted of an association-in-fact of corporations. See United States v. Vogt, 910 F.2d 1184, 1193-94 (4th Cir.1990), cert. denied, 498 U.S. 1083, 111 S.Ct. 955, 112 L.Ed.2d 1043 (1991). The Second Circuit, however, has specifically held that an association-in-fact of corporations can form a RICO enterprise. United States v. Huber, 603 F.2d 387, 393-94 (2d Cir.1979), cert. denied, 445 U.S. 927, 100 S.Ct. 1312, 63 L.Ed.2d 759 (1980). The court in Huber found the list of enterprises in § 1961(4) to be merely illustrative: Congress was concerned about the impact on the American economy of the infiltration of organized crime into interstate commerce. There is no reason to believe that Congress cared what form such infiltration took, except to indicate ... that all such harmful infiltration, regardless of form, should be eradicated.... We agree with the government that [holding that an association of corporations cannot form a RICO enterprise] would perversely insulate the most sophisticated racketeering combinations from RICO’s sanctions, the precise opposite of Congress’ intentions. Id. at 394. In support of their argument, the defendants cite a Maryland district court opinion stating that “[corporations cannot under RICO associate in fact to constitute an enterprise.” Benard v. Hoff, 727 F.Supp. 211, 215 (D.Md.1989). The Benard court, however, cited no authority for this conclusion, and we are not bound by its decision. Instead, the Court agrees with the rationale of the Second Circuit in Huber. In enacting RICO, Congress recognized that organized crime in the United States had become a highly sophisticated, organized and widespread business. See United States v. Turkette, 452 U.S. 576, 588, 101 S.Ct. 2524, 2531, 69 L.Ed.2d 246 (1981). Eliminating associations-in-fact of corporations from the reach of RICO would thus allow the most powerful, sophisticated and potentially dangerous criminals to escape punishment. This was certainly not the intent of Congress. Thus, the Court finds that an association-in-fact of corporations can be an enterprise for purposes of RICO. D. Distinguishing Between the “Pattern” and the “Enterprise” Count I of the Complaint alleges that the defendants violated 18 U.S.C. § 1962(a) by engaging in a pattern of racketeering activity and investing income from that activity in an enterprise. Count III alleges a violation of 18 U.S.C. § 1962(d), which makes it unlawful to conspire to violate § 1962(a). Both the “enterprise” and the “pattern” are distinct and separate prerequisites of this RICO claim: The enterprise is an entity ... The pattern of racketeering activity is, on the other hand, a series of criminal acts as defined by the statute ... The “enterprise” is not the “pattern of racketeering activity”; it is an entity separate and apart from the pattern of activity in which it engages. Turkette, 452 U.S. at 583, 101 S.Ct. at 2528-29. The Magistrate Judge found that the Complaint adequately alleged both a “pattern” and an “enterprise” for RICO purposes. This Court agrees. Proving the existence of an enterprise requires evidence of an “ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit. Id. On the other hand, the pattern is “proved by evidence of the requisite number of acts of racketeering committed by the participants in the enterprise.” Id.; see also United States v. Tillett, 763 F.2d 628, 632 (4th Cir.1985) (association-in-fact must be continuous in nature, have a common purpose and have a structure and existence “beyond that which [is] necessary to commit the predicate [acts of racketeering]”). The enterprise alleged in Counts I and III consists of an association-in-fact of Falk, TranSouth and JB. The Complaint alleges the existence of an ongoing and longstanding organization between the three defendants, with each playing different roles: Falk, as a car seller; TranSouth, as a financier; and JB, as a collection agent. Further, the Complaint alleges that these defendants committed the requisite number of predicate acts of mail fraud to constitute a “pattern of racketeering activity.” This is all the statute requires. Defendant Falk contends that the Complaint is deficient because it only alleges that the defendants associated together during the “churning” schemes, i.e. while committing the alleged predicate acts of mail fraud. See Stephens, Inc. v. Geldermann, Inc., 962 F.2d 808, 816 (8th Cir.1992) (acts of the enterprise are only those with which all members are associated and which give effect to the purpose of the enterprise). However, the Supreme Court has held that a wholly illegitimate and illegal association can be the “enterprise” for RICO purposes. Turkette, 452 U.S. at 580, 101 S.Ct. at 2527. Thus, the argument that if the defendants only associated together while committing mail fraud then they cannot be a distinct RICO enterprise, is unpersuasive. Even if they were a completely illegitimate association, the Supreme Court has held that such an organization can be an “enterprise” under RICO. In this case, however, the Complaint does allege that the organization existed in the intervals between the mail fraud violations. See Tillett, 763 F.2d at 632. In Tillett, the defendants established a restaurant and formed a corporation to aid in their illegal activities. Id. Here, Falk sold cars and assigned most of the car loans and security agreements to TranSouth. JB, Falk’s wholly-owned subsidiary, handled Falk’s collection work. Only when a buyer defaulted on his car loan is the mail fraud scheme alleged to have occurred. The Court thus finds that the Complaint clearly alleges an association-in-fact of the defendants that existed “separate and apart from the pattern of racketeering activity in which it engage[d].” Id. at 631. Therefore, the plaintiffs have adequately alleged a distinct “enterprise” and “pattern of racketeering activity.” E. Participating in the Conduct of the Enterprise Counts II and IV of the Complaint allege that TranSouth and JB violated 18 U.S.C. § 1962(c). Section 1962(c) provides that: It shall be unlawful for any person employed by or associated with any enterprise ... to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt. 18 U.S.C. § 1962(c) (1988). Strangely, in these counts, the Complaint alleges that Falk was the “enterprise”, while TranSouth and JB were the “persons” associated with and employed by the enterprise. The Magistrate Judge dismissed these counts because he concluded that the Complaint failed to allege that TranSouth participated in the conduct of the affairs of Falk, and JB, as a wholly-owned subsidiary of Falk, could not be the “person” under § 1962(c) where Falk is the “enterprise.” This Court agrees. The Supreme Court has recently addressed this statute in great detail. See Reves v. Ernst & Young, — U.S.-, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993). In Reves, the Court considered the question of the meaning of the phrase “to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs.” Id. at -, 113 S.Ct. at 1166. The Court held that to be liable under § 1962(e), one must “participate in the operation or management of the enterprise itself.” Id. at-, 113 S.Ct. at 1173. While subsections (a) and (b) of § 1962 apply to the infiltration of legitimate organizations by “outsiders”, subsection (c) has a more limited reach—“liability depends on showing that the defendant conducted or participated in the conduct of the ‘enterprise’s’ affairs, not just their own affairs.” Id. In this case, TranSouth is only alleged to have associated with Falk in this scheme— the Magistrate Judge described their relationship as akin to a partnership. Such “outsiders” can only operate or manage an enterprise by exerting “control over it as, for example, by bribery.” Id. While TranSouth arguably participated in the affairs of the association-in-faet of Falk, TranSouth and JB, the “enterprise” in Counts II and IV is alleged to be merely Falk. TranSouth, however, is not alleged to have operated or managed Falk. Nowhere in the Complaint is TranSouth alleged to have exerted outside control over Falk through bribery or any other form. Thus, the Complaint fails to state a violation of § 1962(c) and is DISMISSED. F. The Fair Debt Collection Practices Act Claim Count V of the Complaint alleges that JB violated 15 U.S.C. § 1692c, the Fair Debt Collection Practices Act (“FDCPA”), in collecting the debts owed by the plaintiffs. JB moved for partial summary judgment on this claim against plaintiff Seamster only, arguing that the claim had been filed beyond the statute’s one-year limitations period. The Magistrate Judge agreed, holding that the one-year limitations period in § 1692k(d) is a jurisdictional prerequisite to filing suit and cannot be equitably tolled. This Court agrees. Section 1692k(d), entitled “Jurisdiction,” states in pertinent part: “An action to enforce any liability created by this subchapter may be brought in any appropriate United States district court ... within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d) (1988). As to the time period involved, there is no dispute.- The events constituting the alleged violations of the FDCPA took place on December 27,1988 and March 26, 1989. The Complaint was filed on June 17, 1993. Thus, the only issue is whether'§ 1692k(d) is a statute of limitations or a jurisdictional prerequisite. Jurisdictional limitation periods, unlike statutes of limitations, cannot be tolled by fraudulent concealment. See Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 397, 102 S.Ct. 1127, 1134, 71 L.Ed.2d 234 (1982) (stating that consideration of an equitable tolling argument would be “gratuitous” if a time limitation were jurisdictional); Hunt v. Schweiker, 685 F.2d 121, 123 (4th Cir.1982) (whether time limitation is subject to equitable tolling depends on whether it is jurisdictional or a statute of limitations); Hardin v. City Title & Escrow Co., 797 F.2d 1037, 1040-41 (D.C.Cir.1986) (where a time limitation is jurisdictional, it ... will not be tolled or extended on account of fraud). Thus, the characterization of the limitation period is dispositive. Plaintiff notes that the United States Supreme Court has stated that the doctrine of fraudulent concealment is “... read into every federal statute of limitation.” Holmberg v. Armbrecht, 327 U.S. 392, 396-97, 66 S.Ct. 582, 584-85, 90 L.Ed. 743 (1946). While this statement is accurate, it begs the question of whether, in fact, § 1962k(d) is a limitations period or a jurisdictional statute. Plaintiff further relies on the similar limitations period found in the Truth in Lending Act. (TILA) for support. That statute, like § 1692k(d), provides for a limitation period of one year “from the date of the occurrence of the violation.” 15 U.S.C. § 1640(e) (1988). Moreover, several courts have held that § 1640(e) is a statute of limitations that can be tolled for fraudulent concealment. See King v. California, 784 F.2d 910 (9th Cir.1986), cert. denied, 484 U.S. 802, 108 S.Ct. 47, 98 L.Ed.2d 11 (1987); Jones v. TransOhio Savings Assn., 747 F.2d 1037 (6th Cir.1984); Davis v. Edgemere Finance Co., 523 F.Supp. 1121, 1125 (D.Md.1981) (the doctrine of fraudulent concealment could, in the proper case, operate to toll the limitations period of § 1640(e)). Importantly, though, Congress entitled the applicable section of TILA as “Jurisdiction of courts; limitations on actions.” 15 U.S.C. § 1640(e) (emphasis added). The limitations period at issue here, however, is found in a section of the statute entitled merely “Jurisdiction.” 15 U.S.C. § 1692k(d); See Hardin, 797 F.2d at 1039 (the subtitle “Jurisdiction of Courts” indicates Congress’ intention of creating a jurisdictional limitations period). Furthermore, the limitations period of § 1692k(d) is found in the same sentence that creates the federal court jurisdiction, making it reasonable to conclude that Congress intended to create a jurisdictional time limitation. See id. Finally, the only court to address this particular issue found that § 1692k(d) is jurisdictional. Mattson v. U.S. West Communications, Inc., 967 F.2d 259, 262 (8th Cir.1992) (“We are not at liberty to disregard the jurisdictional limitations Congress has placed upon the federal courts_”). For these reasons, the Court holds that 15 U.S.C. § 1692k(d) creates a jurisdictional limitation of one year that cannot be equitably tolled. Because plaintiff Seamster brought this FDCPA action over three years after the alleged violations occurred, this claim is DISMISSED. III. CONCLUSION Following a de novo review of those portions of the United States Magistrate Judge’s Report and Recommendation objected to, this Court finds, as to the RICO claims, that the plaintiffs (1) in Counts I and III have adequately alleged an enterprise consisting of an association-in-fact of Falk, TranSouth and JB; (2) in Counts I and III have adequately alleged a distinct “enterprise” and “pattern of racketeering activity”; (3) in Counts II and IV have failed to adequately allege that TranSouth participated in the conduct of the affairs of Falk; and (4) in Counts I through TV have failed to adequately allege detrimental reliance on the mailings of the defendants. For these reasons, Tran-South’s motion to dismiss Counts I through IV of the Complaint is GRANTED. Falk and JB’s. motion for partial summary judgment on Counts I through TV is also GRANTED. Furthermore, the Court finds that plaintiff Seamster’s claim against JB under the FDCPA is barred by the applicable limitations period. Thus, Falk and JB’s motion for partial summary judgment as to plaintiff Seamster on this claim is GRANTED. Finally, TranSouth’s motion to dismiss the pendent state law claims in Counts VI through VIII is GRANTED. See Brandenburg, 859 F.2d at 1190 (once RICO claims have been dismissed, pendent state claims are also properly dismissed). It is so ORDERED. MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION PRINCE, United States Magistrate Judge. Order of Designation Senior United States District Judge John A. MacKenzie, by an Order entered September 27, 1993, designated the undersigned Magistrate Judge to conduct a hearing and to submit to a judge of the Court proposed recommendations for disposition by the judge of the Motion to Dismiss of defendant TranSouth Financial Corporation, filed on July 20, 1993, and the Motion for Partial Judgement on the Pleadings of defendants Charlie Falk Auto Wholesalers, Inc. and JB Collection Corporation, filed August 3, 1993. A hearing was held on September 28,1993, at which Peter F. Herrick, Esquire, James G. Hurley, Jr., Esquire, Charles A. Johnson, Esquire, Kieron F. Quinn, Esquire, and G. Robert Blakey, Esquire, appeared on behalf of plaintiffs; Franklin A. Swartz, Esquire, Paul A. Murphy, Esquire, F. Whitten Peters, Esquire, and Christopher W. Schmeisser, Esquire, appeared on behalf of defendants Charlie Falk Auto Wholesalers, Inc. and JB Collection Corporation; and Gregory N. Stillman, Esquire, appeared on behalf of defendant TranSouth Financial Corporation. Nature of the Case The complaint in this case is brought by four purchasers of used cars, who also seek class certification, against the used car dealer, a finance company and a collection agent. In eight counts, plaintiffs allege violations- by all defendants of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(a) (Count I), § 1962(c) (Count II), § 1962(d) (Counts III and IV), the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692e(2)(A), 1692e(10), 1692e(ll), 1692f(l) and 1692g(a)(3)-(5) (Count V), the Virginia Uniform Commercial Code, Va.Code §§ 8.9-101 et seq. (Count VI), the Virginia Consumer Protection Act, Va.Code § 59.1-200 (Count VII) and common law fraud and conspiracy (Count VIII). Statement of Alleged Facts The complaint alleges that Charlie Falk Auto Wholesalers, Inc. (“Falk”), the used car dealer, sells used cars to customers and arranges financing using security agreements provided by TranSouth Financial Corporation (“TranSouth”), the finance company. Interest rates on the loans are as high as 30%. (Complaint ¶¶ 12-13.) Falk then assigns the loans and security agreements to TranSouth, but agrees to repurchase the loans upon default and to pay any remaining principal due. (¶ 14.) TranSouth repossesses cars upon default, using a wholly-owned subsidiary of Falk. Repossessed cars are stored at a lot leased by TranSouth from Falk. (¶ 15.) TranSouth sends notices of ■ default to the ear owners after repossession, and sends copies to Falk. Each notice advises the owner that the car can be redeemed upon payment of the deficiency, but that if the deficiency is not paid the car will be sold at a private sale. (¶ 16.) Unredeemed cars are transferred back to Falk pursuant to the repurchase agreement, and Falk resells them. (¶ 17.) Each transfer back is effected by a bid for the car at an undervalued price in relation to the original sale price and in relation to the price realized on resale. (¶ 18.) The bid is the private sale, and that price is the basis for a deficiency in a later collection action. (¶ 19.) Falk then assigns the reacquired loans for collection to JB Collection Corporation (“JB”), which has common officers and directors with Falk and pursues collections only for Falk. (¶¶20, 23.) JB writes a demand letter to the customer for the deficiency, which is based upon the Falk-Tran-South transfer-back price. The letter refers to the previously sent notice of default from TranSouth to the customer. (¶21.) If the customer does not pay the deficiency, JB files a collection action. (¶ 22.) The amount claimed is based upon the transfer-back price. (¶24.) All cars transferred back to Falk are resold at prices greater than the transfer-back prices, and sometimes at prices greater than the original sales prices, but surplus sums are not paid to the defaulting customers. (¶ 25.) As to each of the four plaintiffs, the Complaint alleges in detail what is here stated generally. A used car was bought-with financing arranged by Falk, and the loan was assigned to TranSouth. Plaintiff defaulted, and the car was repossessed. TranSouth sent through the United States Mail a knowingly false notice of private sale. Plaintiff did not redeem. Falk reacquired the car under the Falk-TranSouth repurchase agreement, which was not a legally sufficient sale as set forth in the TranSouth notice. The transfer price was less than the original sale price. The loan was assigned by Falk to JB for collection, and JB sent through the United States Mail a fraudulent demand letter to plaintiff stating a deficiency based upon the transfer-back price. The repossessed car was resold for several hundred dollars more or less than the original sale price, but no surplus was paid to plaintiff. JB then filed an action-at-law against plaintiff, using the United States Mail, seeking judgment for an improperly alleged deficiency, plus attorney’s fee. (Plaintiff Nora Chisolm (¶¶ 26—33)); (Plaintiff Tina Wilee (¶¶ 34-41)); Plaintiff Laura Richards (¶¶ 42-50); (and Plaintiff Starlette Seamster (¶¶ 51-58)). It is alleged that Seamster purchased her car on August 21, 1987; that the Tran-South notice of default was mailed on October 28,1988; that the JB demand letter was mailed on December 27, 1988; that JB mailed the legal action on March 16, 1989; and that the repossessed car was resold on May 20, 1989. ⅜: ⅜ :J: ⅜ * ⅜ In addition to the factual allegations summarized above, plaintiffs assert legal allegations beginning at ¶ 72 of the Complaint, some of which are recounted below. Through the agreements between Falk and TranSouth and between Falk and JB, defendants formed an association-in-fact, which constitutes a RICO-defined enterprise engaged in illegal activities. (¶¶ 74, 103.) Defendants used or invested income derived from a RICO-defined pattern of unlawful activity to operate, maintain control of, and maintain an interest in the enterprise. (¶¶ 75, 83-88, 105.) The unlawful activities included the mailing of false and deceptive notices of private sales, of deceptive demand letters, and of service of process and pleadings in improper deficiency actions. (¶ 76.) The purpose of the enterprise was to effect a revolving repossession and churning scheme. (¶ 77.) Pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, Tran-South has moved to dismiss Counts I through V, the federal claims, for failure to state a claim upon which relief can be granted, and to dismiss Counts VI through VIII, the pendent state claims, for lack of subject matter jurisdiction. (TranSouth Motion to Dismiss, Docket Entry # 13, filed July 20, 1993.) Defendants Falk and JB thereafter moved for partial judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, alleging no material issue of fact exists for Counts I through IV with respect to all plaintiffs, and that no material issue of fact exists for Count V as to plaintiff Seamster. (Motion of Falk and JB for Partial Judgment on the Pleadings, Docket Entry # 19, filed August 3, 1993.) ANALYSIS I. The RICO Claims The first four counts of plaintiffs’ complaint allege four theories under which the concerted activities of the defendants violated RICO and entitle plaintiffs to treble damages under the civil enforcement provision of RICO at 18 U.S.C. § 1964(c). The crux of the defendants’ arguments in favor of dismissal, distilled to their simplest form, is that the facts alleged by plaintiffs do not create any form of a RICO action but merely present a generic state law fraud scenario that plaintiffs have attempted to force into a RICO claim. Counts I through IV of the Complaint allege that the defendants committed various violations of RICO under 18 U.S.C. §■ 1962 which makes it unlawful, among other things, for any person to invest any income derived from a pattern of racketeering activity in any enterprise engaged in interstate commerce, for any person to conduct the affairs of any enterprise engaged in interstate commerce through a pattern of racketeering activity, or for any person to. conspire to so act. 18 U.S.C. § 1964(c) provides a civil cause of action in favor of persons injured in their business or property by any of these violations. These prohibitions have been the subject of countless judicial opinions attempting to interpret the requirements of the RICO statute and to define the boundaries of a civil RICO claim. Plaintiffs’ claims attempt to take advantage of the apparent state of judicial confusion and seek to alter the requirements for, and to extend the scope of, RICO’s attractive treble damages provisions. The dominating issues presented by defendants’ respective motions focus largely on the specifies of some of RICO’s more elusive requirements, with the defendants contending that the plaintiffs have severely misinterpreted both the language of the statutory provisions and the controlling eases interpreting those provisions. RICO, codified at 18 U.S.C. §§ 1961 to 1968 as part of the federal criminal code, creates a civil cause of action in favor of individuals injured by a violation of the Act at § 1964(c). TranSouth, Falk, and JB join together in the initial defense argument that reliance is a requisite element of a civil RICO action claiming mail fraud and that none of the plaintiffs’ RICO counts contains a sufficient allegation of reliance. Plaintiffs rely primarily on their contention that there is no required element of reliance under the circumstances presented herein and contend secondarily that the Complaint does indeed allege reliance. The first four counts of the Complaint invoke separate causes of action under the civil remedy provisions of RICO at 18 U.S.C. § 1964(c). The primary issue presented by TranSoüth’s motion to dismiss and by Falk’s motion for partial summary judgment is whether the plaintiffs have adequately alleged facts sufficient to state a civil RICO action. The arguments from all parties focus on purely legal contentions addressed solely to the adequacy of plaintiffs’ allegations in the Complaint. Although TranSouth and Falk present largely similar arguments -in favor of their respective motions, and Falk even adopts a significant part of TranSouth’s reasoning, the complicated nature of a civil RICO action and the slightly different posture of the defendants indicate that separate consideration of the arguments is in order. Accordingly, -TranSouth’s motion to dismiss, having been filed with the Court first, will be addressed by the Court first. STANDARD OF REVIEW In ruling on a motion to dismiss for failure to state a claim upon which relief can be granted, the complaint is construed in the light most favorable to the plaintiffs apd their factual allegations are taken as true. Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Prudential-Bache Sec., Inc., v. Cullather, 678 F.Supp. 601, 603 (E.D.Va.1987). The complaint should not be dismissed unless it appears beyond doubt that the plaintiffs can prove no set of facts in support of their claim which would entitle them to relief. Conley v. Gibson, 356 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Bruce v. Riddle, 631 F.2d 272, 273-74 (4th Cir.1980). A court should not dismiss a complaint even if it appears on the face of the pleadings that the chance of recovery is very remote. Scheuer, 416 U.S. at 236, 94 S.Ct. at 1686. A complaint that fails to allege an essential element of a complaint is subject to dismissal. See, e.g., Menasco, Inc. v. Wasserman, 886 F.2d 681, 682, 684-85 (4th Cir.1989) (RICO claim failed to allege a pattern of racketeering activity). A. THE RICO CLAIMS AGAINST TRANSOUTH In support of its motion to dismiss, Tran-South argues that plaintiffs’ RICO claims should be dismissed for a number of fatal deficiencies. TranSouth first asserts that all four of the RICO counts fail to allege the required elements of reliance, proximate cause, and actual injury. (TranSouth Mem. Supp.Mot. to Dismiss, Docket Entry # 14, received July 20, 1998, at III.A.1, 2, and 3 (Docket Entry # 14)). Additionally, Tran-South argues that Count I fails to allege any difference between the “enterprise” and the “pattern of racketeering activity”; that Count II fails to allege that TranSouth, the “person”, directed the affairs of Falk, the “enterprise”; and that Counts III and IV fail to allege a RICO conspiracy. 1. RELIANCE TranSouth first makes the general argument that all four RICO claims should be dismissed because the Complaint fails to allege any of the three essential elements of standing prescribed by 18 U.S.C. § 1964(c). TranSouth argues that to state a civil RICO claim, a plaintiff must allege that he detrimentally relied on the predicate acts of racketeering activity, that the predicate acts were the proximate cause of injury to the plaintiff, and that he suffered actual injury. Arguing that there is no “reliance” element required, the plaintiffs claim the Complaint adequately alleges proximate cause and actual injury and therefore meets the standing requirements of § 1964(c). Beyond the various arguments concerning standing, TranSouth argues further that each Count of the Complaint is individually deficient for independent reasons, and plaintiffs present arguments to the contrary. For all but their respective “reliance” arguments, both plaintiffs and TranSouth agree on the basic elements required to adequately plead a civil RICO action. The arguments on both sides focus on opposing characterizations of the Complaint itself, rather than on the necessary elements of a complaint. Their reliance arguments, on the other hand, focus exclusively on the question of whether reliance is required at all. Both parties seem to be in agreement, and the Court so finds, that the Complaint does not allege that the plaintiffs detrimentally relied on the predicate acts of racketeering activity. Despite all the complicated intricacies associated with adequately pleading a civil RICO complaint, the ultimate issue controlling TranSouth’s motion to dismiss is solely whether reliance must be alleged to state a civil RICO cause of action. RICO, codified at 18 U.S.C. §§ 1961 to 1968, is a somewhat unusual statute in that it is a part of the federal criminal code, yet it expressly creates a civil áction in favor of individuals injured by a violation of the act. Specifically, the Act provides: Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefore 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. 18 U.S.C. § 1964(c) (emphasis added). The civil RICO claims at issue here are based on alleged violations of § 1962(a), (c), and (d), which all require the plaintiffs to show that the defendants engaged in a “pattern of racketeering activity.” RICO comes complete with its own definitions section, which defines “racketeering activity” to include, inter alia, any act indictable under certain provisions of the federal criminal code, including mail fraud under 18 U.S.C. § 1341. 18 U.S.C. § 1961(1). The “by reason of’ language essentially serves as a prerequisite to suing under RICO which, as TranSouth points out, the courts invoke as a standing requirement to limit the reach of RICO. The elements of criminal mail fraud are (1) a scheme to defraud and (2) the mailing of a letter for the purpose of executing the scheme. See, e.g., Pereira v. United States, 347 U.S. 1, 8-9, 74 S.Ct. 358, 362-63, 98 L.Ed. 435 (1954); United States v. Vaughn, 797 F.2d 1485, 1492-93 (9th Cir.1986). The specific issue presented here is therefore whether a person injured in his business or property by reason of a pattern of racketeering activity, namely mail fraud, must allege that the injury was caused by his detrimental reliance on the pattern of mail fraud. The fate of the litigants therefore depends on the interpretation of the “by reason of’ requirement of § 1964(c), and there is no lack of ease law addressing this issue. The Supreme Court has not, however, yet addressed this precise issue, but the Court has delivered several opinions interpreting other aspects of RICO. The Supreme Court has interpreted the “by reason of’ language of § 1964(c) as creating a standing requirement, wherein a “plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by the conduct constituting the violation.” Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496-97, 105 S.Ct. 3275, 3285, 87 L.Ed.2d 346 (1985). TranSouth primarily relies on two Fourth Circuit cases, Brandenburg v. Seidel, 859 F.2d 1179 (1988), and Caviness v. Derand Resources Corp., 983 F.2d 1295 (1993), in support of its argument that reliance is required to state a RICO cause of action using mail fraud as the predicate act. In opposition, plaintiffs insist that these cases are distinguishable, offering a multitude of cases from a variety of circuits that, plaintiffs assert, hold that reliance is not required. As summarized by TranSouth, Brandenburg involved depositors in the First Maryland Savings and Loan Association (“FMSL”) who brought an action after FMSL went insolvent and went into receivership. The suit named two classes of defendants: (1) officers and directors of FMSL; and (2) officers and directors of the Maryland Savings-Share Insurance Corporation (“MSSIC”), as well as the savings and loans with which they were associated. The plaintiffs had a number of grounds upon which to sue the officers and directors of FMSL, including allegations that they had misappropriated funds and engaged in self-dealing. The only claim the plaintiffs had against the MSSIC defendants, however, was that they had committed mail and wire fraud by using the mails and interstate wires to make misrepresentations about the security of deposits at FMSL. Such misrepresentations, according to the plaintiffs, were to induce persons to deposit money in the savings and loan. Because they were being deprived of their savings and interest, the plaintiffs claimed that they were entitled to recover against both the FMSL defendants and the MSSIC defendants. The district court dismissed the RICO claim against the defendants for failure to state a claim, and the Fourth Circuit affirmed the dismissal. Brandenburg, 859 F.2d at 1183-84. TranSouth contends that the district court’s dismissal was based on, among other grounds, the failure of the plaintiffs to allege sufficiently their reliance on the alleged predicate acts of mail and wire fraud and that the Fourth Circuit chose to affirm solely on this ground. Arguing that the present case is readily distinguishable and TranSouth’s rebanee misplaced, plaintiffs characterize the Brandenburg decision as one dealing principally with the issue of proximate cause. Both TranSouth and plaintiffs quote, at least in part, a particularly relevant footnote in the Fourth Circuit’s Brandenburg opinion, one which warrants reproduction in full here: The defendants correctly point out that while, as we have noted, it is not necessary to establish detrimental rebanee by the victim in order to make out a violation of the federal mail fraud statute, see Armco [Industial Credit Corp. v. SLT Warehouse Co., 782 F.2d 475 (5th Cir.1986) ] at 481-82, such rebanee is necessary to estabbsh injury to business or property “by reason of’ a predicate act of mail fraud within the meaning of § 1964(c). Brandenburg, 859 F.2d at 1188 n. 10. Plaintiffs assign undue significance to the first part of this quote and focus a significant part of their argument on bolstering their position that the criminal mail fraud statute entails no element of reliance. As plaintiffs’ exhaustive survey of the cases demonstrates, this position is well established and indisputable. The criminal mail fraud statute, 18 U.S.C. § 1341, contains no element of reliance. TranSouth concedes as much. Plaintiffs’ arguments do not advance their present position, however, because they have established only that criminal mail fraud entails no element of reliance. Unfortunately for the plaintiffs, this is a civil case under a statute that creates a civil cause of action against persons who violate the provisions of 18 U.S.C. § 1962, a criminal statute that includes a prohibition against certain methods of violating the criminal mail fraud statute. The statute creating the civil cause of action, 18 U.S.C. § 1964(c), also contains a standing element for civil plaintiffs that requires an allegation that the injury be “by reason of a violation of § 1962.” The “by reason of’ requirement applies only to civil plaintiffs and is an additional element of the civil cause of action, an element that the government need not meet when prosecuting criminal defendants under either the mail fraud statute or RICO itself. Although it may seem ironic that a civil form of action predicated on a criminal statute places a higher burden on the civil plaintiffs than is placed on the government’s pursuit of criminal prosecutions under RICO, the scheme reflects a policy choice made by Congress that the courts are obligated to respect. Having stated the obvious proposition that a civil RICO plaintiff must show that his alleged injury was caused “by reason of’ a violation of § 1962, the remaining issue concerns the proper interpretation of the “by reason of’ language in the context of a RICO action using mail fraud as the predicate offense. TranSouth argues that three standing requirements spring from the “by reason of’ requirement: plaintiff must have detrimentally relied on the predicate acts of racketeering activity; the predicate acts must be the proximate cause of injury to the plaintiff; and the plaintiff must suffer actual injury. Plaintiffs would seem to agree that proximate cause and actual injury are required, contesting only the reliance requirement. As TranSouth contends, Brandenburg explicitly states that “detrimental reliance by the victim ... is necessary to establish injury to business or property “by reason of’ a predicate act of mail fraud within the meaning of § 1964(c).” 859 F.2d at 1189 n. 10. Brandenburg is a Fourth Circuit case, controlling in this court, and the Fourth Circuit could not have stated the proposition more clearly. Plaintiffs correctly characterize Brandenburg as a “proximate cause case,” and the decision did not, however, depend directly on the reliance question, contrary to TranSouth’s contention. The district court in Brandenburg dismissed the RICO count against the MSSIC defendants for failure of the plaintiffs to allege a legally sufficient pattern of racketeering activity. Brandenburg v. First Maryland Savings and Loan, Inc., 660 F.Supp. 717, 727 (D.Md.1987); 859 F.2d at 1183, 1184, and 1186. The Fourth Circuit affirmed the dismissal, but on the alternative ground that the plaintiff had failed to allege the necessary “causation.” 859 F.2d at 1184. A close analysis of Brandenburg clearly indicates that the “reliance” and “proximate cause” elements necessary to state a civil RICO cause of action are closely related. Failure to allege reliance on the allegedly fraudulent mailings prevents a finding that the alleged injury was adequately caused by the acts of mail fraud in a manner satisfying the legal “proximate” cause requirement generally applicable to tort liability, including that statutorily created under 18 U.S.C. § 1964(c). Brandenburg, 859 F.2d at 1189. The Fourth Circuit noted that the proximate cause requirement involves a policy determination as to “whether the conduct in question has been so significant and important a cause that the defendant should be held responsible.” Id., quoting Prosser and Keeton on Torts, § 42, at 272 (5th ed.1984). The policy determination involved in deciding whether a particular act of mail fraud has been “the reason of’ and has proximately caused an economic injury within the meaning of § 1964(c) is simplified and clarified by the reliance requirement. Plaintiffs alleging a civil RICO claim using mail fraud as the predicate act must allege that they relied on the allegedly fraudulent mailing in some way causally related to their injury. In the absence of reliance, proximate cause will also be lacking, yielding a fatally deficient complaint. In a different context, involving a violation of the Securities Act of 1933 as the predicate act creating civil RICO liability, the Fourth Circuit has reiterated the requirement that “a claim under [civil] RICO requires both reliance and damage proximately caused by the violation.” Caviness v. Derand Resources Corp., 983 F.2d 1295 (4th Cir.1993), citing Holmes v. Securities Investor Protection Corp., — U.S.-,-, 112 S.Ct. 1311, 1318, 117 L.Ed.2d 532 (1992) and Brandenburg v. Seidel, 859 F.2d 1179, 1187 & 1188 n. 10 (4th Cir.1988). Caviness involved a claim by a group of investors in oil and gas partnerships against the companies involved in developing and marketing the partnerships as investments. Plaintiffs’ claims were based on various securities law violations, civil RICO, and common law fraud. Caviness, 983 F.2d at 1298. The Caviness plaintiffs alleged violations of the Securities Act of 1933 as the predicate acts giving rise to their civil RICO claim, rather than mail fraud as alleged by plaintiffs in the instant case. The analysis, however, is virtually identical. In Caviness, the Fourth Circuit held that even though the Complaint adequately alleged a violation of the Securities Act, that alone does not state a civil claim for RICO under 18 U.S.C. § 1964(c). Id. at 1305. Likewise, the present Complaint adequately alleges a mail fraud violation, but more than that is required to state a civil RICO claim. Regardless of the predicate act employed, the Complaint must allege “reliance and damage proximately caused” by the violation of civil RICO. Caviness, 983 F.2d at 1305. Having exhaustively argued against the application of a reliance requirement, plaintiffs present a token argument to assert that they have indeed alleged a form of reliance. (Substitute Brief on Plaintiffs Opposition to TranSouth’s Motion to Dismiss, Docket Entry # 18, at 12-13 (Docket Entry # 18)). Plaintiffs argue that they innocently relied on the legitimacy of the notices of private sale sent by TranSouth and further insist that they must be able to rely on TranSouth “not to turn the repossession process into a scam.” Id. at 13. This argument shrewdly inverts the meaning of the reliance requirement, completely circumventing the required allegation that the fraudulent mailings induced them to act in a manner that caused them detriment. Nevertheless, plaintiffs’ argument concedes that they would not have redeemed the cars even if they had known that the process was a sham and concedes further that the plaintiffs cannot make such an allegation. Id. In short, plaintiffs did not, and can not, allege that they acted in reliance on the TranSouth mailings. Plaintiffs’ “reliance” argument amounts to no more than a general complaint that Tran-South participated in a massive fraud, an illegal and profitable scam, that took advantage of the innocent plaintiffs’ reliance on the apparent legitimacy and legality of the operation. Plaintiffs have not alleged that they detrimentally relied on anything connected to the allegedly fraudulent mailings, and absent such reliance, the bare allegation of a mail fraud violation does not support a civil RICO cause of action. Recently decided and on point, Brandenburg and Caviness provide controlling and more than adequate precedent for dismissing plaintiffs’ RICO claims against TranSouth. Plaintiffs’ exhaustive discussion of the decisions of the other circuits and of the policies underlying civil RICO is therefore unavailing and unpersuasive, although it is interesting to note that the vast majority of the Circuits that have addressed this issue have held that reliance is an element of a civil RICO action through the “by reason of’ language of 18 U.S.C. § 1964(e). See Note, Whatever Happened to Durland?: Mail Fraud, RICO, and Justifiable Reliance, 68 Notre Dame L.Rev. 383 (1992). Accordingly, TranSouth’s Motion to Dismiss should be GRANTED and Counts I through IV of the Complaint should be DISMISSED as to TranSouth for the foregoing reasons. 2. PROXIMATE CAUSE TranSouth’s second general ground supporting its--motion to dismiss argues that the Complaint fails to allege the required element of proximate cause. (Docket Entry # 14 at 15.) While plaintiffs do not dispute the proximate cause requirement, they argue that the Complaint sufficiently pleads proximate cause. (Docket Entry # 18 at 13.) Resolution of this issue therefore centers on the proper characterization of the Complaint, in light of the decisions construing the proximate cause requirement. TranSouth’s argument first discusses in general the legal concept of proximate cause in a RICO context, noting that proximate cause is the second element of the standing requirements that the courts have interpreted 18 U.S.C. § 1964(c) to require. Tran-South notes that the Supreme Court has held that a RICO plaintiff must allege and prove that his injury was proximately caused by a defendant’s unlawful acts in order to have standing to sue under 18 U.S.C. § 1964(c). Holmes v. Securities Investor Protection Corp., — U.S. -, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992). The Court discussed the proximate cause requirement: Here we use “proximate cause” to label generically the judicial tools used to limit a person’s responsibility for the consequences of that person’s own acts. ' At bottom, the notion of proximate cause reflects ideas of what justice demands, or of what is administratively possible and convenient. Id. at-, 112 S.Ct. at 1318 (citations omitted). TranSouth contends that this means that a “RICO plaintiff must plead specific predicate acts of racketeering and that those acts were the proximate cause of plaintiffs’ injury.” (Docket Entry # 14 at 15.) Quoting from Brandenburg, TranSouth argues that plaintiffs are required to allege more than a cause in fact connection to meet the standard for showing proximate cause: A cause-in fact connection, standing alone, does not suffice to establish liability.... [Cjausation principles generally applicable to tort liability must be considered applicable. These require not only cause in fact, but “legal” or “proximate” cause as well.... Brandenberg v. Seidel, 859 F.2d 1179, 1189 (4th Cir.1988); see also Caviness v. Derand Resources Corp., 983 F.2d 1295, 1305 (4th Cir.1993). TranSouth notes finally that proximate cause is a question of law, to be decided by the Court, and the factors the Court is required to consider are “the foreseeability of the particular injury, the intervention of other independent causes and the factual directness of the causal connection.” (Docket Entry # 14 at 16, quoting Brandenberg, 859 F.2d at 1189.) Plaintiffs also quote extensively from the Fourth Circuit’s opinion in Brandenburg and seem to be in general agreement with Tran-South’s description of the proximate cause concept. (Docket Entry # 18 at 15.) The parties sharply differ, however, in their respective interpretations of the governing legal standards as applied to the facts alleged in the Complaint. TranSouth asserts that the RICO claims must be dismissed unless plaintiffs allege “facts adequate to show that the plaintiffs relied to their detriment on the alleged predicate acts.” (Docket Entry # 14 at 18.) Plaintiffs aggressively attack this position and cite a number of cases that, they claim, involve proximate cause without detrimental reliance. (Docket Entry # 18 at 13-15.) Plaintiffs’ insistence that they have adequately alleged proximate cause underscores the deficiency in their earlier reliance argument. Plaintiffs continue to claim that reb-anee is not required to maintain their RICO action, emphasizing the necessary role that the TranSouth mailings played in the overall scheme. Plaintiffs’ emphasis, however, is misguided. Plaintiffs claim that without the TranSouth notice of private sale “the defendants’ conspiracy could not go forward. The link to plaintiffs’ and the class’ injury is thus both clear and direct.” (Docket Entry # 18 at 15.) The “link” may well be “clear and direct,” but plaintiffs nevertheless have failed to meet the legal standard of proximate cause required under civil RICO. A civil RICO action requires a private plaintiff to allege he suffered injury to his. business or property, that defendants committed certain predicate acts of racketeering in violation of § 1962, and that “this injury was caused by the predicate acts of racketeering activity that make up the violation of § 1962.” Brandenburg, 859 F.2d at 1187. Assuming the plaintiffs have suffered injury and defendants have committed the requisite predicate acts of mail fraud, the simple question is whether the defendants’ acts of mail fraud caused plaintiffs’ injuries. To survive this motion to dismiss, plaintiffs must have alleged an adequate causal nexus between their injury and the alleged predicate acts of mail fraud. See Brandenburg, 859 F.2d at 1187. As the arguments of the parties demonstrate, the distinction between “reliance” and “proximate cause” in a civil RICO action based on predicate acts of mail fraud is subtle and largely of semantic value. Plaintiffs themselves recognize that the determination of proximate cause involves policy considerations, and to that end the Fourth Circuit, for civil RICO cases predicated on reliance, has discussed the proximate cause concept in terms of reliance. The defendant simply will not be held liable for all injuries that can be connected to his perpetration of various acts of mail .fraud; the victim must show that his injuries were caused by the mail fraud. To adequately allege proximate causation under the circumstances presented here, plaintiffs must allege that their reliance on the TranSouth acts of mail fraud caused them injury. Plaintiffs do not meet their burden, and their argument clearly reveals the deficiency in their action. Plaintiffs characterize Tran-South’s notices of private sale as the “crucial first step” in the collective abuse of the repossession process and as an “essential element in the scheme.” (Docket Entry # 18 at 15.) Plaintiffs then claim that the scheme caused them injury. Plaintiffs’ logic, however, to draw any direct causal connection between the alleged predicate acts of mail fraud and their injury, reasoning generally that, since the mail fraud was crucial to the succéss of the overall scheme and the overall scheme caused the injury complained of, the mail fraud proximately caused the injury. (See Docket Entry # 18 at 14-15.) This connection is no more than' an attenuated cause in fact connection, one that is not significant enough or important enough to find TranSouth responsible for the alleged injury. See Brandenburg, 859 F.2d at 1189. The TranSouth notices complained of here were not only necessary to the scheme, they were required by Virginia law governing the repossession process. See Va.Code § 8.9-504. Plaintiffs claim that the notices were fraudulent for failing to reveal the intended transfer of the repossessed cars back to Falk. Taken in the light most favorable to the plaintiffs, the allegations state a scheme whose fraudulent operation arises after the notices of private sale have been sent and not acted upon. The required notices informed the plaintiffs of their opportunity to pay off the deficiencies that gave TranSouth the right to repossess their cars. (Complaint ¶ 16.) Plaintiffs do not claim to have been defrauded by the repossession itself, and the Complaint fairly concedes that the repossessions were legitimately instituted after each of the plaintiffs defaulted on their respective loans. (See Complaint ¶¶ 15-16.) It is only the execution of the private sales, which were conducted after the notices were sent, that are alleged to have been conducted fraudulently. The notices themselves can not be