Time-Bars: RICO-Criminal and Civil-Federal and State

By Blakey, G. Robert | Notre Dame Law Review, April 2013 | Go to article overview

Time-Bars: RICO-Criminal and Civil-Federal and State


Blakey, G. Robert, Notre Dame Law Review


2. The Clayton Act Rule

While the majority in Klehr was reluctant to decide finally on an accrual rule for civil RICO, Justice Scalia in his concurring opinion argued for the adoption of the Clayton Act or the injury-occurrence accrual rule. (338) In Zenith Radio Corp. v. Hazeltine Research, Inc., (339) the Court set out the accrual rule for claims under the Clayton Act:

   [A] cause of action accrues and the statute begins to run when a
   defendant commits an act that injures a plaintiff's business. In
   the context of a continuing conspiracy to violate the antitrust
   laws, ... this has usually been understood to mean that each time a
   plaintiff is injured by an act of the defendants a cause of action
   accrues to him to recover the damages caused by that act and that,
   as to those damages, the statute of limitations runs from the
   commission of the act. However, each separate cause of action that
   so accrues entitles a plaintiff to recover not only those damages
   which he has suffered at the date of accrual, but also those which
   he will suffer in the future from the particular invasion,
   including what he has suffered during and will predictably suffer
   after trial. (340)

The Zenith Court made one exception to this accrual rule. If a plaintiff cannot recover future damages, because they are too speculative, "the cause of action for future damages, if they ever occur, will accrue only on the date they are suffered; thereafter the plaintiff may sue to recover them at any time within four years from the date they were inflicted." (341) The Court reasoned that without this exception, plaintiffs could not prove future damages within the limitations period, they would be unrecoverable, and that outcome would be contrary to congressional intent. (342) Thus, unless an exception applies, under the Clayton Act rule, the statute of limitations begins to run from the date of the unlawful act that injures the plaintiff's business. (343) Thus, the Clayton Act accrual rule, as decided in Zenith, is a "separate-accrual" rule. Each time the defendant injured the plaintiff by reason of a violation of the statute, he has a new claim for relief with a separate limitations period. Under the "separate-accrual," as applied to RICO, if a defendant injures a plaintiff multiple times by the same pattern of racketeering, he may only be able to recover for part of those injuries, depending on when he files his claim and various estoppel or tolling rules.

In spite of Justice Scalia's concurring opinion in Klehr, no circuit court currently applies the Clayton Act accrual rule to civil RICO. (344) That said, the pure Clayton Act or injury-occurrence rule remains an "arguable fit" for RICO. Congress, after all, modeled RICO on the Clayton Act. So far; so good. On the other hand, the Court applies the modeling argument in light of the presence of other fit-factors, as in Malley-Duff for the length of the limitations period, but not, as in Tafflin on the antitrust parallel on whether federal jurisdiction for RICO is, in reference to the states, "exclusive" or "concurrent." Antitrust is; RICO is not. (345) Thus, by itself, the modeling argument is plausible, but neither determinative nor persuasive.

Under the Clayton Act rule, a victim of a RICO violation has a four-year period within which he may sue for his injury to business or property. Moreover, if five years after a RICO violation, a plaintiff suffers injuries to his business or properties that previously were too speculative to prove, he could then sue for those injuries. (346) So far, so good. Nevertheless, considered as a whole, a "pure"--not carefully modified and tailored to RICO--Clayton Act or an injury-occurrence rule is not aptly suited to civil RICO, principally because it does not include a sufficient consideration of the pattern and enterprise elements, a point the Court alluded to in Klehr. (347)

First, under the pure Clayton Act or injury-occurrence rule, the statute of limitations for RICO could potentially begin to run against the possible RICO plaintiff before the plaintiff possesses a valid RICO claim, an absurd result. …

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