Time-Bars: RICO-Criminal and Civil-Federal and State
Blakey, G. Robert, Notre Dame Law Review
III. STATUTES OF LIMITATIONS IN CIVIL RICO CASES
A. History and Justifications
Civil statutes of limitations were not a part of English common law, but were creatures of the legislature. (137) The first English statutes of limitations did not specify a time beyond which they barred actions. Instead, the English Parliament chose "certain notable times;"-like the beginning of the reign of Henry I, the return of John from Ireland, or the coronation of Richard I-and barred civil actions involving realty that accrued before that date. (138) In 1540, during the reign of Henry VIII, the Parliament, recognizing the limitations of the old system, passed a permanent statute of limitations that created civil limitations periods. (139) In 1623, the Parliament finally enacted a comprehensive statute of limitations that became a model for American civil statutes of limitations. (140)
Many of the same justifications that animate criminal statutes of limitations also apply to civil statutes of limitations. Civil statutes of limitations save defendants from having to defend themselves against stale charges (141) and keep those stale cases out of court. (142) They provide repose for the parties (143) and certainty by notifying potential defendants of the length of their exposure to liability, (144) and they give plaintiffs an incentive to litigate claims without unreasonable delay. (145) Legislatures must balance these justifications for civil statutes of limitations with the interests of the injured party and give the party a fair chance to litigate a valid claim. (146) As with criminal statutes of limitations, legislatures must strike a balance. Plaintiffs should be able to sue for compensation when injured, but at some point the defendant's "right to be free of stale claims ... comes to prevail over the [victim's] right to prosecute them." (147)
B. Determining the Limitations Period for Civil RICO
Usually, determining whether a civil action is timely involves three questions (148): (1) what is the period of limitations, (2) when does the period accrue, and (3) when did the plaintiff commence the suit? The period of limitations is easy to determine where the legislature has specified it in the statute, but, with federal RICO and many state RICO statutes, the legislatures did not designate a limitations period.
1. Federal RICO
a. Before Agency Holding Corp. v. Malley-Duff & Associates, Inc.
Before 1987, when the Court decided Agency Holding Corp. v. Malley-Duff & Associates, Inc., (149) federal civil RICO cases did not have an applicable limitations period. Except in rare circumstances, when a federal claim for relief lacks an express limitations period, federal courts adopt the most closely analogous limitations period provided by state law. (150) In theory, at least, adopting state limitations periods (151) ensures that some limitations period will apply to bar stale federal claims, implementing by judicial judgment a policy that rightly belongs with the legislature. (152) In practice, however, the
adoption of state limitations periods tends to undermine the purposes of statutes of limitations (e.g., certainty) and leads to forum shopping and unfairness. (153) These frustrating and entangled problems were on stark display when, before Malley-Duff federal courts adopted for varying, and not always consistent, reasons a variety of state statutes of limitations to apply to civil RICO cases.
To determine which state claim for relief, if any, was most analogous to civil RICO, federal courts had to "characterize" civil RICO claims. (154) Courts could characterize civil RICO based on the alleged predicate offenses, the nature of the relief requested, or as a distinctive separate offense. Many courts looked to the predicate acts alleged by the plaintiff, analogizing these to state law claims for relief. (155) The decision to "categorize" civil RICO based on the character of the predicate offenses was problematic, however, because of the wide variety of possible predicate offenses that a civil RICO complaint could include, many of which, taken individually, have different periods of limitations under state law. …