S054403, Opinion — American Fed. Teachers v. Oregon Taxpayers United

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Argued and submitted September 10, 2007, decision of Court of Appeals affirmed;
judgment of circuit court affirmed in part and reversed in part, and case remanded
to circuit court for further proceedings July 3, 2008

AMERICAN FEDERATION OF
TEACHERS-OREGON, AFT, AFL-CIO,
an Oregon unincorporated association,
Respondent on Review,
and
STATE OF OREGON,
Respondent on Review,
v.

OREGON TAXPAYERS UNITED PAC,
an Oregon political committee;
Oregon Taxpayers United Education Foundation,
an Oregon nonprofit corporation,
Petitioners on Review,
and
John DOES 1 through 10,
Defendants.
(CC 0108-08942; CA A122158 (Control))

OREGON EDUCATION ASSOCIATION,
an Oregon nonprofit corporation,
Respondent on Review,
and
STATE OF OREGON,
Respondent on Review,
v.
OREGON TAXPAYERS UNITED PAC,
an Oregon political committee;
Oregon Taxpayers United Education Foundation,
an Oregon nonprofit corporation,
Petitioners on Review,
and
John DOES 2 through 10,
Defendants.
(0012-12632; CA A122168; SC S054403)
189 P3d 9

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CJS, Racketeer Influenced and Corrupt Organizations § 35.

# En Banc

On review from the Court of Appeals .*

Gregory W. Byrne, Byrne & Associates, Portland, argued
the cause and filed the briefs for petitioners on review Oregon
Taxpayers United PAC and Oregon Taxpayers United
Educational Foundation.

Gregory A. Hartman, Bennett, Hartman, Morris &
Kaplan LLP, Portland, argued the cause and filed the brief
for respondent on review Oregon Education Association.
With him on the briefs were Michael J. Morris, Portland, and
Aruna A. Masih, Portland.

Gene Mechanic, Portland, argued the cause and filed the
brief for respondent on review American Federation of
Teachers-Oregon, AFT, AFL-CIO.

Rolf C. Moan, Assistant Attorney General, Salem, argued
the cause and filed the briefs for respondent on review State
of Oregon. With him on the briefs were Hardy Myers,
Attorney General, and Mary H. Williams, Solicitor General.

BALMER, J.

The decision of the Court of Appeals is affirmed. The judg-
ment of the circuit court is affirmed in part and reversed in
part, and the case is remanded to the circuit court for further
proceedings.

\* Appeal from Multnomah County Circuit Court, Jerome E. LaBarre, Judge.
208 Or App 350, 145 P3d 1111, adh'd to on recons, 209 Or App 518, 149 P3d 159
(2006).

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# BALMER, J.

This case requires us to interpret and apply the
Oregon Racketeer Influenced and Corrupt Organization Act
(ORICO), ORS 166.715 to 166.735. A jury found that defen-
dants-a political action committee and a nonprofit corpora-
tion controlled by the same individuals-engaged with others
in a pattern of racketeering activity, as defined in ORICO, by
forging signatures to qualify two ballot measures for the 2000
general election and by filing false statements with the state
from 1998 through 2000 concerning their expenditures and
contributions. The jury also found that defendants' illegal
conduct injured plaintiffs-two labor organizations that
spent substantial amounts of money opposing the ballot
measures. The jury determined that plaintiffs had suffered
damages of approximately $840,000, which the trial court
trebled pursuant to ORICO. The trial court entered a money
judgment in favor of plaintiffs in the amount of approxi-
mately $2.5 million and issued an injunction barring defen-
dants from engaging in certain activities. The Court of
Appeals reversed one part of the judgment, but otherwise
affirmed. American Fed. Teachers v. Oregon Taxpayers
United, 208 Or App 350, 145 P3d 1111, adh'd to on recons,
209 Or App 518, 149 P3d 159 (2006).

On review, defendants argue that, even if their acts
constituted ORICO violations, those acts were not the cause
of plaintiffs' injuries and, therefore, that plaintiffs were not
"injured by reason of" defendants' acts within the meaning of
ORS 166.725(7)(a). For the reasons set forth below, we con-
clude that the evidence was sufficient to permit a jury to find
that plaintiffs were "injured by reason of" defendants' con-
duct. We therefore affirm the decision of the Court of
Appeals.

# I. FACTS AND PROCEDURAL HISTORY

The Court of Appeals described the facts in detail,
and we restate them only to the extent necessary to discuss
the legal questions that we address. Plaintiffs, Oregon
Education Association (OEA) and American Federation of
Teachers AFL-CIO (AFT), are labor organizations that rep-
resent educators and other public school employees.

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Plaintiffs brought separate ORICO actions, which were later
consolidated, against defendants Oregon Taxpayers United
Political Action Committee (OTU-PAC) and Oregon
Taxpayers United Education Foundation (OTU-EF).
Defendant OTU-PAC is a political committee within the
meaning of ORS 260.005(16)(a) and was organized under
ORS 260.042 by Bill Sizemore and Rebecca Miller, who were
directors of the committee at the times relevant to these
actions. OTU-EF was an Oregon nonprofit corporation that
had been granted approval to operate as a tax-exempt chari-
table or educational organization under Section 501(c)(3) of
the Internal Revenue Code; Sizemore served as executive
director of OTU-EF.1

Plaintiffs brought these actions under ORICO, alleg-
ing that defendants participated in an "enterprise"2 that con-
sisted of defendants, Miller, Sizemore, three Oregon corpo-
rations (I&R Petition Services, Klein Campaigns, and NFP,
Inc.), and two other political committees. As described in
greater detail below, a jury found that the enterprise engaged
in a "pattern of racketeering activity" and that participants
in the enterprise violated several criminal statutes in their
efforts to place several initiatives on the ballot for the general
election in 2000. Two of those initiatives, Measures 92 and
98, "would have severely restricted, or prohibited, the ability
of school districts and other employers to implement 'check-
offs' for payroll deductions for union dues when some part of
those dues were used for political purposes." American Fed.
Teachers, 208 Or App at 353. Plaintiffs alleged, and the evi-
dence permitted the jury to find, that the passage of those
measures would have severely restricted plaintiffs' ability to
collect union dues; that defendants placed the measures on
the ballot with the intent to harm plaintiffs by, among other
things, causing them to spend money to oppose passage of the
measures; and that plaintiffs reasonably and necessarily
spent money to oppose the measures.3

1 The trial court, as part of its judgment in this case, entered a decree dissolv-
ing OTU-EF, and defendants did not challenge that part of the judgment on appeal.

2 The relevant statutory definitions are quoted and discussed later in this
opinion.

3 The voters rejected the two measures.

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In Count 1, plaintiffs alleged that defendants,
through an employee, Kelli Highley, submitted to the Secre-
tary of State forged signatures on statements of sponsorship
for Measures 92 and 98, in violation of ORS 165.007(1)(a)
(second-degree forgery) and ORS 165.013 (first-degree for-
gery). Based on those statements of sponsorship, plaintiffs
alleged, the Secretary of State approved the measures for cir-
culation, and defendants gathered sufficient signatures for
them to be placed on the ballot. In Count 2, plaintiffs alleged
that defendants, acting through I&R Petition Services, Klein
Campaigns, and NFP, Inc., forged signatures on the initia-
tive petitions and falsely certified petition signature sheets
that they submitted to the Secretary of State, also in viola-
tion of ORS 165.007(1)(a) and ORS 165.013. In Count 3,
plaintiffs alleged that defendants violated ORS 162.085(1)
(unsworn falsification) by submitting false statements to the
state in 1998, 1999, and 2000 on two different financial
reporting documents to conceal the fact that OTU-EF (a tax-
exempt, nonprofit corporation) had expended funds for OTU-
PAC's political activities in support of Measures 92 and 98.

The jury, by special verdict, found the facts as
alleged by plaintiffs, with one exception. The exception was
the jury's finding, as to Count 2, that, although the enterprise
with which defendants were associated had forged signa-
tures on the initiative petitions and falsely had certified
those petition sheets, those actions had not injured plaintiffs.
The jury awarded damages on Counts 1 and 3, and, as noted,
the court entered a judgment for plaintiffs and against both
defendants in a total amount of approximately $2.5 million.4

After the jury returned its verdict, the state inter-
vened in the action and joined plaintiffs in seeking injunctive
relief against defendants. In ruling on the request for injunc-
tive relief, the trial court made extensive findings of fact.

4 On Count 1, the jury awarded damages of $65,112 to OEA and $40,500 to
AFT. On Count 3, the jury awarded $671,658 to OEA and $170,000 to AFT.
Because the damages awarded under Count 3 included the amounts that plaintiffs
had claimed under Count 1, the trial court based the judgment only on the larger
awards, The court trebled the damage awards pursuant to ORS 166.725(7)(a) and
entered a judgment in favor of OEA and against OTU-PAC and OTU-EF, jointly
and severally, for $2,014,974, and in favor of AFT and against OTU-PAC and
OTU-EF, jointly and severally, for $510,000.

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Those findings mirrored the jury's findings in most matters,
but in some areas the court found further facts against defen-
dants. The court then dissolved OTU-EF and entered a
detailed injunction imposing restrictions on OTU-PAC and
any successor organizations.

Defendants appealed and argued, as relevant to the
issues before this court, that the trial court erred when it
(1) denied defendants' motion to dismiss all three claims "for
lack of any cognizable ORICO 'causation' for [plaintiffs']
asserted 'injury' and 'damages' as a matter of law"; (2) denied
defendants' motion to dismiss Count 3 on the basis that the
forms that OTU-EF and OTU-PAC submitted to the state did
not constitute "application[s] for [a] benefit" under ORS
162.085(1) and, therefore, defendants had not violated that
statute; and (3) denied defendants' motion for a directed ver-
dict on Count 3 because plaintiffs had "supplied no evidence
that, had OTU-PAC and OTU-EF filed accurate [reports with
the state], OTU-EF would necessarily have lost its lawful
status as a charitable corporation * * *. "

A divided panel of the Court of Appeals affirmed the
trial court's rulings," with the exception of the trial court's
denial of defendants' motion to dismiss Count 3 against
OTU-PAC. That count alleged, in part, that plaintiffs had
been harmed by defendant OTU-PAC's submission of false
campaign contribution and expenditure reports (C&Es) to
the state. The Court of Appeals concluded that C&Es are not
an "application" for a "benefit" and, therefore, that falsifica-
tion of the C&Es did not violate ORS 162.085(1). American
Fed. Teachers, 208 Or App at 362-64. That holding did not
change the amount of the damages awarded to plaintiffs on
Count 3, but it required the Court of Appeals to modify the
money judgment as to that count so that it applied only to
OTU-EF and not to OTU-PAC. Id. at 365 n 16.6

" Judge Edmonds concurred in part and dissented in part. He would have
reversed plaintiffs' judgment for money damages on the grounds that plaintiffs'
damages "were not directly caused by defendants' wrongdoing." American Fed.
Teachers, 208 Or App at 380 (Edmonds, J., concurring in part, dissenting in part).
He also would have held that some aspects of the injunctive relief ordered by the
trial court went beyond that authorized by law. Id. at 397-405.

& Plaintiffs moved for reconsideration of that aspect of the Court of Appeals
decision. They did not challenge the court's conclusion that OTU-PAC's submission
of false C&Es did not violate ORS 162.085(1), but argued instead that, because

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## II. DISCUSSION

### A. The Oregon Racketeer Influenced and Corrupt Organization Act

A brief review of the structure of ORICO provides
context for the legal issues on review. As relevant here,
ORICO provides, in part:

"It is unlawful for any person employed by, or associated
with, any enterprise to conduct or participate, directly or
indirectly, in such enterprise through a pattern of racket-
eering activity * * *. "

ORS 166.720(3). ORICO also defines the key statutory terms.
"Enterprise" includes, among other things, "any individual,
\* \* \* corporation, *** or other profit or nonprofit legal
entity[.]" ORS 166.715(2). "Racketeering activity" is "conduct
that constitutes a crime" under any one of the specific crimi-
nal statutes that are listed in ORS166.715(6)(a)-statutes
that range from criminal homicide to bribery to certain finan-
cial crimes." To establish an ORICO violation, the plaintiff
must prove a "pattern of racketeering activity," which is
defined, in part, as:

"engaging in at least two incidents of racketeering activity
that have the same or similar intents, results, accomplices,
victims or methods of commission or otherwise are interre-
lated by distinguishing characteristics, including a nexus to
the same enterprise, and are not isolated incidents
and that the last of such incidents occurred within five
years after a prior incident of racketeering activity."

OTU-PAC acted in concert with OTU-EF, OTU-PAC should be jointly and severally
liable with OTU-EF for the money judgment with respect to the latter's submission
of false CT-12 forms (Count 3). The Court of Appeals rejected that theory of liabil-
ity, holding that it had not been raised with sufficient specificity until the filing of
plaintiffs' motion for reconsideration. American Fed. Teachers, 209 Or App at 521.
Plaintiffs petitioned this court for review of that aspect of the Court of Appeals
decision, and we held the petition pending our decision in this case. By order dated
this date, we are denying plaintiffs' petition.

7 Significantly, ORICO focuses on whether the defendant engaged in "conduct"
that violates a listed criminal statute and does not require that the defendant have
been charged with or convicted of the crime. See Computer Concepts, Inc. v. Brandt,
310 Or 706, 717, 801 P2d 800 (1990) (ORICO plaintiff must prove that defendant
"engaged in all of the elements of a listed crime," but not that defendant was con-
victed of any crime).

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ORS 166.715(4). Finally, as we discuss in greater detail
below, any person injured by an ORICO violation can recover
three times the actual damages that the person has sus-
tained by reason of that violation:

"Any person who is injured by reason of any violation of
the provisions of ORS 166.720(1) to (4) shall have a cause of
action for three-fold the actual damages sustained and,
when appropriate, punitive damages[.]"

ORS 166.725(7)(a) (emphasis added).

In this case, plaintiffs allege that defendants and
their agents violated ORICO by engaging in a pattern of
racketeering activity. The forgery of signatures alleged in
Counts 1 and 2 would violate ORS 165.007(1) and ORS
167.013, which define forgery and related offenses, and
therefore could permissibly be alleged to be racketeering
activities under ORS 166.715(6)(a)(P). The submission of
false statements by OTU-EF to the Attorney General on a
form that charitable organizations are required to submit
(the CT-12 form), as alleged in Count 3, would (as we hold
below) violate ORS 162.085(1), which prohibits unsworn fal-
sification in connection with an application for a government
benefit, and therefore could permissibly be alleged to be a
racketeering activity under ORS 166.715(6)(a)(B).

On review, defendants do not challenge the jury's
findings that they did, in fact, forge sponsorship and petition
signatures or that OTU-EF submitted false reports to the
Attorney General regarding its charitable activities. Neither
do they dispute that they participated in an "enterprise" or
that their activities constituted a "pattern" because they
were not "isolated," but rather consisted of at least two inci-
dents involving "the same or similar intents." That is, defen-
dants do not deny that, at least in the abstract, they commit-
ted the ORICO violations alleged in the complaint.

Defendants argue instead that plaintiffs cannot
recover damages from them because, even if they did violate
ORICO, plaintiffs were not "injured by reason of" defendants'
acts. Defendants' central argument, stated briefly, is that the
words "injured by reason of" in ORS 166.725(7)(a) require a
"direct" causal connection between defendants' acts and the

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damages claimed by plaintiffs, and that neither the allega-
tions in the complaint nor the evidence at trial demonstrated
the required relationship. Defendants also argue that their
filing of false CT-12 forms, as alleged in Count 3, did not vio-
late the underlying criminal law against unsworn falsifica-
tion in connection with an application for government bene-
fits, because the CT-12 form is not an "application for [a]
benefit."

### B. Submission of the CT-12 Forms by OTU-EF

Because a conclusion favorable to defendants on the
CT-12 form issue would make it unnecessary to consider the
injury issue, at least with respect to Count 3, we address that
question first. ORS 128.670 requires that charitable trusts
and corporations, like OTU-EF, file periodic written reports
with the Attorney General, including information prescribed
by the Attorney General by rule, "as to the nature of the
assets held for charitable purposes and the administration
thereof by the corporation or trustee." The Attorney General
created the CT-12 form to collect that information from char-
itable organizations.

Defendants contend that the annual submission of
the CT-12 form, which must be accompanied by the organi-
zation's IRS form 990, is not an "application for [a] benefit"
within the meaning of ORS 162.085. Defendants note that
ORS 128.670 describes the information that the Attorney
General may collect as a "report" and argue that the Attorney
General does not have the authority to "reject" the submis-
sion of a CT-12 form. Defendants argue that a CT-12 form is
similar to an income tax return, which, they assert, no one
would suggest is an "application" for a "benefit." It follows,
according to defendants, that their filing of CT-12 forms con-
taining false statements cannot be a predicate criminal act
for ORICO purposes.8

8 The evidence was sufficient to permit a jury to find a number of false state-
ments and omissions in OTU-EF's CT-12 forms. OTU-EF, for example, falsely
stated each year that it was not involved in legislative activity. It also failed to dis-
close its substantial financial transfers to OTU-PAC. On a number of occasions,
Sizemore wrote checks of $50,000 and $25,000 from OTU-EF directly to for-profit
corporations hired to gather signatures for the measures at issue here. Those
transfers were not properly disclosed. Plaintiffs introduced evidence that OTU-EF
applied 60 percent of its total 1997-98 expenditures to political activities related to

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ORS 162.085 provides:

"(1) A person commits the crime of unsworn falsifica-
tion if the person knowingly makes any false written state-
ment to a public servant in connection with an application
for any benefit.

"(2) Unsworn falsification is a Class B misdemeanor."

(Emphasis added.) "Benefit," for purposes of ORS 162.085, is
defined as "gain or advantage to the beneficiary or to a third
person pursuant to the desire or consent of the beneficiary."
ORS162.055(1). The statutes provide no definition of "appli-
cation," but, as the Court of Appeals noted, "application" com-
monly means an "'appeal; request; [or a] petition * * * '"
American Fed. Teachers, 208 Or App at 361 (quoting
Webster's Third New Int'l Dictionary 105 (unabridged ed
2002)). The Court of Appeals also pointed out that nothing in
the wording or structure of ORS 162.085 restricts an "appli-
cation" to a single, original application and that the term
encompasses a written submission requesting a renewal of a
benefit. Id. at 363-64. Moreover, the statute prohibits not
only false statements in the application itself, but also false
statements "in connection with" an application.

We note initially that defendants' income tax
analogy is inapposite. Although persons meeting certain
requirements must file income tax returns-and are subject
to penalties if they do not-the filing of an income tax return
confers no specific "benefit" on the filer that is not available to
other persons. The filing of a CT-12 form, in contrast, is a
requirement for a corporation that wants to engage in
fundraising by holding itself out as a tax-exempt organiza-
tion and soliciting contributions that are, in most circum-
stances, tax-deductible for the donor and protected from
public disclosure. Those fundraising, tax-exemption, and con-
fidentiality benefits are conditioned, among other things, on
the filing of accurate and timely CT-12 forms. A charitable
organization that fails to file the CT-12 form when due is sub-
ject to civil penalties, and the Attorney General may order

OTU-PAC, rather than to the kind of educational, research, or other charitable
activities for which it allegedly had been created. That figure was 43 percent in
1998-99 and 72 percent in 1999-2000. Sizemore signed the OTU-EF forms as exec-
utive director of that organization.

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the organization to cease soliciting charitable contributions
until the report is filed. ORS 128.670(8)(a), (b). See OAR 137-
010-0005 to 137-010-0044 (establishing reporting require-
ments for charitable organizations and penalties for noncom-
pliance). Moreover, the Attorney General can, pursuant to
ORS 128.866, "obtain an injunction against solicitation of
contributions" by a charitable organization that does not
comply "with all registration and reporting requirements of
the Charitable Solicitations Act and ORS 128.610 to 128.750"
or that has breached any of its fiduciary duties. Finally, the
Attorney General is authorized to seek a court order dissolv-
ing a corporation that has abused its legal authority or
"fraudulently solicited money" or "fraudulently used the
money solicited[,]" ORS 65.661(1)(a)(C)-as the Attorney
General ultimately did in this case.

We conclude that the information contained in a
CT-12 form is a "written statement" submitted "in connection
with" the request, or application, for the "benefit" of being
permitted to solicit tax-exempt donations. That permission
plainly is a "gain or advantage to the beneficiary or to a third
person[,]" and therefore is a "benefit" for purposes of ORS
162.085. The Court of Appeals correctly held that "OTU-EF's
submissions of the false CT-12s were material to its continu-
ing eligibility and beneficial entitlement to engage in fund-
raising activities in Oregon." American Fed. Teachers, 208 Or
App at 365. Consequently, when the jury found that defen-
dant OTU-EF filed false CT-12 forms as part of its enterprise
with OTU-PAC and others, it also was permitted to find that
OTU-EF had committed the crime of unsworn falsification,
ORS 162.085, which is a predicate offense under ORICO.

### C. Plaintiffs' Recovery of Damages Caused by Defendants' Conduct

We turn to the primary issue on review: whether
plaintiffs can recover the expenses that they incurred in
opposing Measures 92 and 98 as damages from defendants.
We again quote ORS 166.725(7)(a), which provides for a pri-
vate right of action for damages for a person "injured by rea-
son of" an ORICO violation:

"Any person who is injured by reason of any violation of
the provisions of ORS 166.720(1) to (4) shall have a cause of

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action for three-fold the actual damages sustained and,
when appropriate, punitive damages[.]"

(Emphasis added.) The emphasized words in the statute
highlight two aspects of any award of damages in a private
ORICO action: first, the nature of the "injur[y]" claimed by
the plaintiff, and, second, "causation"-whether the plaintiff
suffered those injuries "by reason of" the defendant's ORICO
violation. On review, the parties focus on causation. How-
ever, we briefly discuss the reasons that we do not address
the first issue-the kind of "injury" that may provide the
basis for a private action for damages under ORICO.

Plaintiffs introduced evidence that permitted the
jury to find that defendants placed Measures 92 and 98 on
the ballot with the intent to injure plaintiffs by, among other
things, causing them to spend money to oppose those meas-
ures. Plaintiffs did spend money to oppose the placement of
the measures on the ballot and, after the measures were
placed on the ballot, they spent money to defeat the measures
in the 2000 general election. Plaintiffs introduced evidence
that, given the threat that the measures presented to them
as public employee labor organizations, they had no realistic
option other than to spend money to oppose the measures.
Plaintiffs detailed the expenditures that they made, and the
jury awarded damages based on those expenditures.

For their part, defendants did not argue at trial or on
appeal that plaintiffs' expenditures were unreasonable in
amount or unnecessary in terms of plaintiffs' efforts to pro-
tect their institutional interests, and we therefore have no
reason to decide whether those considerations are relevant in
determining the kinds or amount of damages that may be
recovered under ORICO. In the Court of Appeals, defendants
asserted that plaintiffs' expenditures were "voluntary,"
because nothing required plaintiffs to spend money opposing
the measures, and "indirect," because plaintiffs did not them-
selves advertise in opposition to the measures, but instead
contributed money to political committees that opposed the
measures. Defendants argued that such voluntary and indi-
rect expenditures could not, as a matter of law, constitute
"injury" or damages for ORICO purposes. That argument

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was unsuccessful in the Court of Appeals, however, and
defendants did not raise it on review.

In their petition for review, defendants did argue
that "the legislature did not intend for opponents of ballot
measures to be able to use ORICO to recover their campaign
expenditures." They acknowledged, however, that that argu-
ment "was not raised directly in the Court of Appeals," but
rather was suggested to them by the dissent in the Court of
Appeals. To the extent that defendants even raised that issue
in the trial court, they lost, and, as noted, they failed to make
that argument to the Court of Appeals. We conclude that that
argument is not preserved and decline to consider it. See
State v. King, 307 Or 332, 338, 768 P2d 391 (1989) (refusing
to consider argument made in trial court, but not made in
Court of Appeals); ORAP 9.20(2) (if Supreme Court allows
review and does not limit questions on review, questions
before Supreme Court include all questions properly before
the Court of Appeals that petitioner or respondent claims
were erroneously decided by that court). Consequently, we
have no occasion to consider whether an ORICO defendant
may, in an appropriate case, be able to assert that ORS
166.725(7)(a) does not permit a private plaintiff to recover for
expenditures that the defendant can show were unnecessary
or unreasonable, "voluntary," or related to a political
campaign.

We turn to the issue of causation. Defendants artic-
ulate their basic theme as follows:

"[T]he pattern of racketeering activity must be the proxi-
mate or direct cause of the plaintiff's injury, not just a
remote or speculative cause. It must be the reason the
plaintiff suffered financial loss, not merely one incident in a
sequence of events that preceded the loss."

(Emphases in original.) Defendants thus argue that plaintiffs
must allege and prove that defendants' conduct not only was
a factual cause of plaintiffs' injury, but also was the "proxi-
mate" or "direct" cause of that injury. "Factual causation"
exists when a defendant's conduct "was a substantial factor
in producing [the] plaintiff's injury." Simpson v. Sisters of
Charity of Providence, 284 Or 547, 555, 588 P2d 4 (1978). As

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to factual causation, there is little dispute between the par-
ties as to the proper legal standard (although, as discussed
below, defendants argue that the evidence does not establish
factual causation).

The parties disagree, however, as to what an ORICO
plaintiff must show, in addition to factual causation, to
recover damages from an ORICO defendant. In particular,
defendants argue that we should interpret the words "injured
by reason of" in ORS 166.725(7)(a) to require "proximate" or
"direct" cause, in the same way that the United States
Supreme Court interpreted the words "injured * * * by rea-
son of" in the federal Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 USC § 1964(c), in Holmes v.
Sec. Investor Prot. Corp., 503 US 258, 265-71, 112 S Ct 1311,
117 L Ed 2d 532 (1992).9 We briefly discuss the Court's deci-
sion in Holmes and then return to the facts of this case.

In Holmes, the plaintiff, the Securities Investor
Protection Corporation (SIPC), a federally chartered organi-
zation created to reimburse customers of member securities
brokers who become insolvent, sought to recover damages
pursuant to RICO from various defendants who allegedly
had engaged in a stock-manipulation scheme. 503 US at 261.
SIPC's causation theory was that the defendants, in violation
of the federal securities laws, had manipulated the stock
prices of several companies. After the defendants' scheme
was discovered, the price of the stocks declined sharply, and
the broker-dealers that held the stocks became insolvent. As
a result, the broker-dealers were unable to pay other claims
that their customers had against them-claims entirely unre-
lated to the defendants' stock manipulation. Consequently,
SIPC was required to advance funds to cover those claims. Id.
at 262-63.

The Supreme Court held that, in those circum-
stances, the relationship between the defendants' unlawful

9 Defendants argue that this court should follow the Supreme Court's decision
in Holmes because the interpretation of the federal RICO statute sheds light on
what the Oregon legislature intended when it enacted ORICO. Although we reject
that argument for the obvious reason that Holmes was decided 10 years after the
legislature enacted ORS 166.725(7)(a), we nevertheless find Holmes to be a helpful
discussion of causation.

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conduct and the injury for which SIPC sought damages was
too attenuated to permit recovery:

"[T]he link is too remote between the stock manipulation
alleged and the customers' harm, being purely contingent
on the harm suffered by the broker-dealers. That is, the
conspirators have allegedly injured these customers only
insofar as the stock manipulation first injured the broker-
dealers and left them without the wherewithal to pay cus-
tomers' claims."

503 US at 271. The Court held that, for a private plaintiff to
recover damages under RICO, the plaintiff must show that
the defendant's violation was not only a "but for" cause of the
plaintiff's injury, but also was the "proximate cause" of that
injury. Id. at 268. The court stated that a "direct" relationship
between the defendant's conduct and the plaintiff's injury
could be the basis for liability, id. at 269, but one that was
"too remote" or "indirect" could not be. Id. at 268, 274.

Defendants urge us to adopt the Supreme Court's
reasoning in Holmes and to hold that an ORICO plaintiff can
recover only for injuries that are "directly" or "proximately"
caused by defendants' actions. Plaintiffs respond that Holmes
does not accurately state the test for determining whether
a plaintiff is "injured by reason of" an ORICO violation,
because Oregon long ago abandoned the concept of proximate
cause in tort law and there is no reason to resurrect that test
in interpreting ORS 166.725(7)(a). Plaintiffs argue that, even
under the Holmes test, however, their injuries are recover-
able, because those injuries were the direct and intended
result of defendants' ORICO violations.

We need not decide whether Holmes provides the
correct standard for determining causation for ORICO pur-
poses. We agree with plaintiffs that, even under the Holmes
test urged by defendants, plaintiffs were "injured by reason
of" defendants' actions, within the meaning of ORS
166.725(7)(a).1º An ORICO violation, like many acts by indi-
viduals or groups, may create ripples that spread far beyond
the immediate sphere of the actor. Defendants may well be

10 We refer to the Holmes test only as a potentially helpful analytical construct
for our interpretation of ORS 166.725(7)(a). This case turns entirely on issues of
Oregon law.

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correct that some ripple effects are so remote and attenuated
that the legislature did not intend a person injured by them
to be able to recover damages. However, this case does not
require us to consider exactly how far liability for those
effects extends under ORS 166.725(7)(a). The statute permits
recovery for those "injured by reason of" a violation, and,
whether that statute is interpreted to require a showing of
"direct" and "proximate" injury, as defendants assert based
on Holmes, or some lesser standard, it unquestionably per-
mits recovery for injuries that are the intended consequence
of an ORICO violation.11 That is, a plaintiff that can prove
that its injuries were the intended consequence of a defen-
dant's ORICO violation may recover for those injuries under
ORS 166.725(7)(a).

We therefore turn to defendants' arguments that
plaintiffs failed to allege and prove that they were "injured by
reason of" defendants' ORICO violations because there was
not a sufficient causal link between defendants' actions and
plaintiffs' injuries. Defendants argue that the judgment must
be reversed because Counts 1 and 3 do not allege facts show-
ing that plaintiffs had been "injured by reason of" defendants'
acts. Defendants also argue that no evidence supported
plaintiffs' claim in Count 3. We examine defendants' argu-
ments as to each count to determine whether the allegations
(as to Counts 1 and 3) and the evidence (as to Count 3) dem-
onstrate that plaintiffs were "injured by reason of" defen-
dants' ORICO violations.12

11 That reading of Holmes is supported by the Supreme Court's recent decision
in Bridge v. Phoenix Bond & Indemnity Co., 553 US_, 128 S Ct 2131, 170 L Ed
2d 1012 (2008). There, the Court held that mail fraud by RICO defendants, which
was part of a scheme intended to harm the plaintiffs (competitors of the defen-
dants), could be a predicate racketeering act for the purposes of a private RICO
action, even though the fraudulent statements were made to, and relied upon, by
third parties and not by the plaintiffs. The Court emphasized that, although the
plaintiffs had not received or relied upon the misrepresentations, they were "the
primary and intended victims of the scheme to defraud." 553 US at ____ , 128 S Ct
at 2139. It also relied upon the general tort principle that one " 'who intentionally
causes injury to another is subject to liability to the other for that injury, if his con-
duct is generally culpable and not justifiable under the circumstances.'" Id. at ._ ,
128 S Ct at 2143 (quoting Restatement (Second) of Torts § 870). Plaintiffs here are
in the same position as the plaintiffs in Bridge in that they were the intended vic-
tims of defendants' wrongful conduct, although the forged signatures and the
fraudulent documents were submitted to third parties.

12 Defendants' argument that plaintiffs failed to state a claim for relief chal-
lenges the sufficiency of the allegations of Counts 1 and 3 and the sufficiency of the

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## 1. Count 1

In reviewing a trial court ruling on a motion to dis-
miss for failure to state a claim for relief, ORCP 21 A(8), we
accept as true all of the allegations and give the nonmoving
party the benefit of all favorable inferences that can be drawn
from those allegations. See Bailey v. Lewis Farm, Inc., 343 Or
276, 278, 171 P3d 336 (2007) (stating standard of review).

The process for placing an initiative measure on the
ballot begins with the submission to the Secretary of State of
a prospective petition with a "statement of sponsorship"
signed by 25 electors. Former ORS 250.045(1).13 In Count 1,
plaintiffs alleged that defendants knowingly and intention-
ally, and with the intent to injure plaintiffs, forged signa-
tures and made false statements in connection with the
statements of sponsorship for Measures 92 and 98. Plaintiffs
further alleged that, as a result of those forgeries, the
Secretary of State approved the initiative petitions for circu-
lation, which led to the placement of Measures 92 and 98 on
the ballot. Finally, plaintiffs alleged that they made expen-
ditures to oppose certification of the ballot titles for those
measures and to oppose the measures themselves, once they
qualified to be placed on the ballot; that those expenditures
"were reasonable and necessary" because the measures, if
passed, would have had a severe effect on plaintiffs' ability to
collect union dues; and that the expenditures "were the
expected consequence of [defendants'] enterprise."

Defendants argue first that those allegations are
insufficient to allege factual causation because, even if defen-
dants had forged some of the signatures, defendants easily
could have obtained the required 25 genuine signatures.
Defendants note that the complaints admit that defendants

evidence with respect to Count 3. Because the case was tried, the complaints are
deemed to have been amended to conform to the evidence that was introduced
without objection. See ORCP 23 B (so providing). Accordingly, the only proper
inquiry on defendants' motion is whether evidence in the record supports the jury
verdict. However, because the evidence at trial generally was consistent with the
allegations, for convenience we will refer to the allegations as well as to the
evidence.

13 In 2007, the legislature increased to 1,000 the number of sponsorship signa-
tures required for a prospective petition. See ORS 250.045(1) (2007). In this opin-
ion, we refer to the version of the statute in effect at the times relevant to the con-
duct alleged in the complaints.

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obtained sufficient signatures (approximately 89,000) to
place the measures on the ballot, which indicates that defen-
dants would have been able to find 25 sponsors for the meas-
ures. Additionally, defendants argue that the allegations fail
the factual causation test because plaintiffs could not "prove
that 25 genuine signatures could not have been obtained
before a deadline for filing the statement of sponsorship."
(Emphasis in original.)

Defendants' argument fails for two reasons. First, on
a motion to dismiss, where we consider only the allegations in
the complaint, plaintiffs do not have to "prove" anything.
Plaintiffs alleged that defendants falsified signatures on the
statements of sponsorship and that, based upon those state-
ments, the Secretary of State began the process that led to
the placement of the measures on the ballot. No one disputes
that submission of a proposed initiative petition, with the sig-
natures of 25 electors, was a necessary step to place a state
measure on the ballot. Defendants' submission of the pro-
posed petitions and signatures to the Secretary of State was
a "substantial factor" in the ultimate placement of the meas-
ures on the ballot because, had the proposed petitions not
been submitted, the Secretary of State would not have
approved the petitions for signature collection, sufficient sig-
natures would not have been gathered, and the measures
would not have appeared on the ballot. In other words, the
proposed petitions and statements of sponsorship were a nec-
essary link in the chain of events that caused the harm that
plaintiffs alleged.

Second, defendants err in relying on cases like Joshi
v. Providence Health System, 342 Or 152, 149 P3d 1164
(2006), where this court held that a plaintiff in a wrongful
death case alleging medical negligence could not establish
factual causation by showing that the defendant's negli-
gence, at most, deprived the decedent of a 30 percent chance
of surviving a stroke. That increase, this court stated, was
insufficient to demonstrate, to a reasonable degree of prob-
ability, that the defendant's negligence "caused" the dece-
dent's death. Id. at 164. Here, in contrast, defendants' sub-
mission of forged signatures did result in, i.e., "cause," the
Secretary of State's approval of the initiative petitions for sig-
nature gathering, as a matter of historical fact. Defendants

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can hardly rewind the tape and argue that, had they filed
genuine rather than forged signatures, plaintiffs likely would
have suffered the same injuries, when, unlike in Joshi, the
allegation (and the evidence) was that defendants' actions
were in fact a necessary link in the causal chain. Plaintiffs
properly alleged that defendants' submission of the prospec-
tive petitions with forged statements of sponsorship resulted
in the circulation of Measures 92 and 98 for signatures
and the subsequent placement of those measures on the
November 2000 ballot.

Defendants also argue that plaintiffs' injuries were
not factually "caused" by defendants' racketeering activities
because there was a long chain of events, with several inter-
vening causal factors, between the forgeries on the state-
ments of sponsorship and the certification of the measures for
the general election ballot. Defendants identify as one inter-
vening cause the certification of the sponsorship signatures
by the county clerks from the counties where the sponsorship
signatures were obtained. As another intervening cause,
they point to the Secretary of State's certification of the ini-
tiative petition for inclusion on the ballot for the 2000 general
election, after he determined that defendants had submitted
the required number of signatures. Defendants contend that
those acts, rather than the forged sponsorship signatures,
were "the reason-the 'cause'-that any proposed initiative
would be approved" for placement on the ballot.

Defendants' position cannot be squared with this
court's cases. The question with respect to factual causation,
as noted, is whether defendants' conduct was a substantial
factor in causing plaintiffs' injuries. As this court has sug-
gested in a slightly different context, the "subsequent negli-
gent conduct of * * * a third party cannot insulate a prior neg-
ligent actor from liability when the conduct of both was a
substantial factor in producing harm." Rice v. Hyster Co., 273
Or 191, 205, 540 P2d 989 (1975).14 As we described above, the
submission of sponsorship statements was a necessary step
in the process of seeking to place the measures on the ballot.
The fact that other, later, steps also were a part of that proc-
ess does not mean that defendants' use of forged signatures

14 Here, of course, the prior acts were intentional, rather than negligent.

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on the sponsorship statements was not a "substantial factor"
in causing the damages that plaintiffs suffered as a result of
defendants' actions.

Even if plaintiffs properly alleged factual causation,
defendants argue, Count 1 nevertheless fails to state a claim
because the allegations do not demonstrate that defendants'
conduct was a "direct" cause of plaintiffs' injuries, as required
by ORICO. Defendants are incorrect. Plaintiffs alleged that
the very purpose of the enterprise and the actions that it
took, including the forged sponsorship signatures, was to
harm plaintiffs by, among other things, forcing plaintiffs to
spend their money and time opposing the measures. We
agree with the Court of Appeals' description of the connection
between defendants' acts and the harm:

"Causation on the facts pleaded here was not 'labyrin-
thine.' It was simple and direct. Defendants' alleged predi-
cate acts were directed at putting several initiatives on the
ballot to achieve either or both of two purposes: (1) to
severely restrict or prohibit plaintiffs' abilities to collect
union dues to the extent that some portion of those dues
were used for political purposes-and, thus, ultimately to
cripple plaintiffs' participation in the political process; and
(2) to force plaintiffs to expend substantial funds to defeat
the measures and, in doing so, to divert those resources
from other efforts. Thus, unlike in Holmes, in which the
chain of causation was reminiscent of the game of 'Mouse-
trap,' causation, as alleged here, was basic and blunt.
Defendants intended to cause precisely this sort of injury to
plaintiffs. The only contingency in producing that injury
was the success of defendants' efforts."

American Fed. Teachers, 208 Or App at 369 (footnote omit-
ted). That is, plaintiffs were the very targets of defendants'
illegal conduct, and the injuries that plaintiffs suffered were
the very injuries that defendants intended to cause. Accord,
Bridge v. Phoenix Bond & Indemnity Co., 553 US_, 128 S
Ct 2131, 170 L Ed 2d 1012 (2008) (RICO action could be
based on mail fraud engaged in with purpose and intent to
harm plaintiffs even when fraudulent statements not made
to or relied upon by plaintiffs). In Count 1, plaintiffs alleged
that defendants' forgeries of the sponsorship statements
were intended to injure plaintiffs by leading to the placement

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of the measures on the ballot and thus to the expenditure of
funds by plaintiffs. Those allegations sufficiently linked
defendants' actions with plaintiffs' injuries to state a claim
for relief under ORS 166.725(7)(a). The trial court did not err
in denying defendants' motion to dismiss Count 1.

## 2. Count 3 - Challenge to the Allegations

As outlined above, plaintiffs alleged that OTU-EF
submitted false statements to the Attorney General on the
CT-12 forms. Plaintiffs alleged that those false CT-12 forms
"conceal[ed] the actual use of funds raised by OTU-EF to sup-
port OTU-PAC activity related to Measures 92 and 98, * * *
enabling more funds to be raised to support Measures 92 and
98 through the tax exempt OTU-EF." The filing of the forms
containing knowingly false statements, the complaint
alleged, constituted unsworn falsification under ORS
162.085 (a racketeering activity under ORICO, ORS
166.715(6)(B)), and enabled defendants to "raise the neces-
sary funds to collect signatures to qualify Measures 92 and 98
for the 2000 general election ballot." As a result of those acts,
plaintiffs "expended funds, as defendants knew and intended
they would, by contributing to campaigns to oppose
Measures 92 and 98." But for defendants' acts, plaintiffs
alleged, the measures would not have qualified for the ballot,
and plaintiffs would not have had to expend funds to oppose
them.

Defendants' sole argument that Count 3 failed to
allege factual causation is that "plaintiffs had to show that
had OTU-EF's filings been truthful, OTU-PAC-or the other
political committees supporting those measure[s]-would
not have been able to raise sufficient funds to place Measures
92 and 98 on the ballot." Defendants assert that plaintiffs
offered no such evidence. Defendants' argument fails for the
same reasons that we rejected defendants' argument that
Count 1 failed to state a claim for relief: defendants' motion is
directed to the pleadings, not to the evidence, and the plead-
ings sufficiently allege that defendants' acts were a substan-
tial factor in causing plaintiffs' injury.

Defendants' second argument regarding Count 3
also mirrors their second argument with respect to Count 1:
that the complaints fail to state a claim for relief because they

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do not allege that plaintiffs' injuries were a "direct" result of
the false statements on the CT-12 forms. We disagree. The
complaints allege that one of the purposes of defendants' fil-
ing of false CT-12 forms was to raise funds to place Measures
92 and 98 on the ballot and thereby to harm plaintiffs.
OTU-EF raised funds that contributors treated as tax-
deductible charitable contributions and that were not subject
to public disclosure. It then used those funds improperly for
the political purpose of promoting OTU-PAC's ballot meas-
ures and for the wages of OTU-EF employees who, rather
than working on educational or other charitable matters,
spent much of their time advancing OTU-PAC's political
agenda. Count 3 alleged that the knowingly false statements
concerning OTU-EF's activities and expenditures concealed
its support for the ballot measures and its integral role in the
enterprise with OTU-PAC, Sizemore, and others that was
intended to, and did, cause plaintiffs' injuries. The com-
plaints alleged that defendants had specifically targeted
plaintiffs for harm and that the false CT-12 forms helped
cause that harm by permitting the supposedly educational
charitable organization to raise funds and secretly use those
funds to promote the ballot measures that were intended to
harm plaintiffs. Again, even using the "direct" harm test of
Holmes, as defendants suggest, plaintiffs' complaints are
sufficient.

3\. Count 3 - Challenge to the Sufficiency of the Evidence

Defendants' other major argument on review chal-
lenges the sufficiency of the evidence to support the jury ver-
dict with respect to Count 3. Defendants contend that plain-
tiffs failed to produce evidence to support the allegation that
plaintiffs had been "injured by reason of" OTU-EF's submis-
sion of false CT-12 forms to the state. Defendants argue that
the Court of Appeals erred in affirming the trial court's
denial of defendants' motion for a directed verdict as to
Count 3.

"This court reviews the denial of a motion for directed
verdict for any evidence to support the verdict in plaintiff's
favor * * * [and we] cannot set aside a jury's verdict unless
there was no evidence from which the jury could have found
the facts necessary to establish the elements of plaintiff's
cause of action."

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Woodbury v. CH2M Hill, Inc., 335 Or 154, 159, 61 P3d 918
(2003). Because the jury found for plaintiffs, we construe all
reasonable inferences from the evidence in favor of plaintiffs.
Id.

The evidence, viewed in the light most favorable to
plaintiffs, was sufficient to permit a reasonable jury to con-
clude that plaintiffs had been "injured by reason of"
OTU-EF's submission of false CT-12 forms. That evidence
included testimony by Sizemore, a director of both OTU-PAC
and OTU-EF, that he had created OTU-EF in 1993 because
he was having trouble raising money through OTU-PAC
because of the need to file C&Es disclosing the names of con-
tributors with the Secretary of State. The jury heard other
testimony that OTU-EF had been established as a fund rais-
ing channel because contributors to OTU-PAC were hesitant
to make contributions if their identities and the amounts of
their contributions would be disclosed, as is the case for con-
tributions to political committees,15 but that they were will-
ing to make contributions to a charitable organization such
as OTU-EF because their identities could remain hidden and
because the contributions would be tax deductible. Plaintiffs
introduced evidence that the submission of false CT-12 forms
began at least as early as 1998. Plaintiffs' expert testified
that, had OTU-EF submitted factually accurate CT-12 forms,
the Attorney General "almost certainly would have followed
up on that" and would have had various options to stop OTU-
EF from providing funding to OTU-PAC for political activi-
ties. The expert testified that, in his view, had the CT-12
forms truthfully disclosed OTU-EF's activities, the Attorney
General at least would have sought a cease and desist order.
He stated that, in his experience, nonprofit entities had
received follow-up inquiries from the Attorney General,
based on the contents of their CT-12 forms. Other evidence
demonstrated that OTU-EF provided over $120,000 to OTU-
PAC for political activities, some of which was paid directly to
the companies, controlled by Sizemore, that were responsible

15 Sizemore testified that OTU-PAC was "having a challenge with donors being
afraid to donate because of union harassment and boycotts of their companies

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for more than 80 percent of the signatures gathered to qualify
the measures for the ballot. Finally, there was evidence that
employees on the OTU-EF payroll actually spent substantial
amounts of their time on OTU-PAC business, including
working to qualify Measures 92 and 98 for the ballot.

Defendants argue that that evidence was insuffi-
cient to prove factual causation because it failed to establish
the following chain of events: that "but for" the filing of the
false CT-12 forms, OTU-EF would have lost its status as a
charitable corporation before the 2000 election cycle; that, as
a result of losing that status, OTU-EF would have seen a
decline in contributions; and that, as a result of OTU-EF's
problems, OTU-PAC would not have had sufficient funds to
gather the signatures to put the measures on the ballot.
Defendants point to the statement by plaintiffs' expert wit-
ness on nonprofit corporations that, although the Attorney
General would have had a number of options available to him
had OTU-EF filed accurate CT-12 forms that revealed its
improper use of charitable contributions for political activity,
he could not state with certainty what action the Attorney
General would have taken. Defendants also note that the
expert witness stated that any investigation into improper
conduct by a charitable corporation would take months and
that he was unaware of any instance in which the Attorney
General had revoked a charitable corporation's permission to
solicit tax-deductible contributions.

Defendants' arguments miss the point. Plaintiffs
were not required to prove that OTU-EF necessarily would
have lost its status as a charitable organization authorized to
engage in fundraising if it had filed truthful CT-12 forms.
The issue is whether, viewing the evidence in the light most
favorable to the plaintiffs, a reasonable jury could have found
that, had OTU-EF filed truthful CT-12 forms, the Attorney
General likely would have taken steps to halt its unlawful
activity and support for the measures, and plaintiffs' injuries
would not have occurred. As to the Attorney General's
actions, the unrebutted testimony of plaintiffs' expert pro-
vided a basis for the jury to conclude that the Attorney
General likely would have taken steps to stop OTU-EF's
activities. Indeed, as the Court of Appeals noted, American
Fed. Teachers, 208 Or App at 374 n 23, the Attorney

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General's actual intervention in this case in order to seek the
dissolution of OTU-EF, supports the inferences that the jury
could have drawn from the expert's testimony with respect to
the Attorney General's possible actions. As to the impact of
the loss of funds from OTU-EF on defendants' ballot measure
effort, Sizemore and others testified about the difficulties
OTU-PAC had raising money, the desire of some major con-
tributors to avoid public disclosure of their contributions, and
the tens of thousands of dollars transferred from OTU-EF to
OTU-PAC. Testimony from Sizemore and Miller permitted
the jury to find that OTU-EF's ability to solicit tax-deductible
contributions and funnel them to OTU-PAC to support the
effort to place Measures 92 and 98 on the ballot was critical to
the success of that effort. We conclude that there was evi-
dence to support plaintiffs' claim that OTU-EF's filing of
materially false CT-12 forms was a substantial factor in caus-
ing plaintiffs' injuries.

Defendants also argue that the evidence does not
support the jury verdict that plaintiffs were injured "by rea-
son of" OTU-EF's activities (including transferring substan-
tial funds to OTU-PAC for political purposes, use of OTU-EF
employees for OTU-PAC work, and submitting false CT-12
forms to conceal those activities) because there was no evi-
dence that that conduct was a "direct" or "proximate" cause of
plaintiffs' injuries. As discussed above, there was evidence
from which the jury could find that the false CT-12 forms
were part of a scheme in which the same individuals, with
the same intent-causing plaintiffs to spend substantial
amounts of money to oppose anti-union ballot measures-
financed their scheme by soliciting supposedly charitable
contributions and then using the contributions for political
purposes, while avoiding detection by filing knowingly false
documents. As one of the participants, Miller, testified, plac-
ing the measures on the ballot was important because it
allowed defendants "to do two things at once, stop an agenda
that we disagreed with [by forcing plaintiffs to spend money
in opposition to the measures] and advance one that we
agreed with." There was evidence from which the jury could
find that the false CT-12 forms were an essential part of
defendants' plan to harm plaintiffs in precisely that manner.

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# III. CONCLUSION

To summarize, we conclude that plaintiffs were
"injured by reason of" defendants' ORICO violations, ORS
166.725(7)(a), because plaintiffs alleged and proved that
defendants intended to and did harm plaintiffs by actions
that defendants took as part of a pattern of racketeering
activity. The Court of Appeals correctly affirmed the trial
court order denying defendants' motion to dismiss Count 1,
because that count properly alleged that plaintiffs were
injured by reason of the false statements of sponsorship sub-
mitted by defendants in connection with Measures 92 and 98.
The Court of Appeals also was correct in affirming the denial
of OTU-EF's motion to dismiss Count 3 and the denial of
OTU-EF's motion for a directed verdict on that count: the
CT-12 form is a document filed in connection with an appli-
cation for a benefit; the complaint properly alleged that
plaintiffs had been "injured by reason of" OTU-EF's racket-
eering activities, including filing false CT-12 forms; and the
evidence supported the jury finding that plaintiffs had been
"injured by reason of" OTU-EF's racketeering activities.

The decision of the Court of Appeals is affirmed. The
judgment of the circuit court is affirmed in part and reversed
in part, and the case is remanded to the circuit court for fur-
ther proceedings.