Ideal Steel Supply Corporation sold steel mill products along with related supplies and services. Its principal competitor was National Steel Supply, Inc. Both Ideal and National had stores in New York City. Ideal sued National for allegedly violating the Racketeer Influenced and Corrupt Organizations Act (RICO), whose § 1962(c) makes it unlawful for "any person employed by or associated with any enterprise engaged in, or the activities of which affect, 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 or collection of unlawful debt." Another RICO provision, § 1964(c), recognizes a private right of action in favor of "any person injured in his business or property by reason of a violation" of the statute's substantive restrictions.
In its complaint, Ideal alleged that National had adopted a practice of failing to charge the requisite New York sales tax to cash-paying customers. This practice supposedly allowed National to reduce its prices without affecting its profit margin. Ideal asserted that National submitted fraudulent tax returns to the New York State Department of Taxation and Finance in an effort to conceal its conduct. According to Ideal's complaint, National's submission of the fraudulent tax returns constituted various acts of mail fraud and wire fraud. (Mail fraud and wire fraud are forms of "racketeering activity," according to RICO.) Ideal contended that National's conduct amounted to a "pattern of racketeering activity" for purposes of § 1962(c) because the fraudulent returns were submitted on an ongoing and regular basis. The complaint asserted that the allegedly unlawful racketeering scheme gave National a competitive advantage over Ideal in terms of sales and market share, and that Ideal had therefore been injured "by reason of" the scheme for purposes of § 1964(c), the private right of action provision. Ruling that Ideal's complaint failed to state a claim upon which relief could be granted, a federal district court granted National's motion to dismiss the case. The U.S. Court of Appeals for the Second Circuit reversed, concluding that Ideal had adequately pleaded a causation link between the alleged pattern of racketeering activity and the harm experienced by Ideal. The U.S. Supreme Court granted National's petition for certiorari. How did the Supreme Court rule on whether Ideal had adequately pleaded the necessary causation link?