Lyft Not Liable for Representations of Safe Service: No Transaction or Loss Causation

Lyft Not Liable for Representations of Safe Service: No Transaction or Loss Causation

I have written often about the essential element of justifiable or reasonable reliance in alleging and proving a claim of fraud. This critical element presents both a formidable burden for the party attempting to establish fraud and abundant opportunities for the party accused of fraud to defend against such allegations. See.e.g., New York High Court Reinforces Justifiable Reliance and Loss Causation in Fraud; Fraud Claims Must be Dismissed for Lack of Reasonable Reliance. Yet, not to be overlooked, there is another required element of the claim of fraud that also presents challenges for the claimant and opportunities for the accused: Causation.

Fraud “Causation” Concepts

Since the cause of action of fraud is a civil tort, the concepts that apply to any tort are applicable to the claims of fraud. Causation, that is, the requirement that the alleged wrongful conduct must be deemed to have directly and proximately resulted in the alleged injury, is an essential element of fraud. While not often detailed or discussed in court decisions, causation in fraud has multiply requirements.

As I have explained, for example, the concept of “superseding cause” is applied to fraud claims: “To establish a claim for fraud, it is not enough for the plaintiff to show that defendant made factual misrepresentations upon which the plaintiff relied. Even if the plaintiff did in fact reasonably rely on those misrepresentations, and changed its position in such reliance, if the losses plaintiff sustained would have occurred independently and without regard to the fraudulent statements, any such superseding cause of the losses breaks the chain of causation on the fraud claim.” See Tort Concepts of Superseding Cause Apply to Fraud Claims.

Read the full blog post here.