483 U.S. 143 (1987), 86-497, Agency Holding Corp. v. Malley-Duff & Associates, Inc.

Docket Nº:No. 86-497
Citation:483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121, 55 U.S.L.W. 4952
Party Name:Agency Holding Corp. v. Malley-Duff & Associates, Inc.
Case Date:June 22, 1987
Court:United States Supreme Court

Page 143

483 U.S. 143 (1987)

107 S.Ct. 2759, 97 L.Ed.2d 121, 55 U.S.L.W. 4952

Agency Holding Corp.

v.

Malley-Duff & Associates, Inc.

No. 86-497

United States Supreme Court

June 22, 1987

Argued April 21, 1987

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT

Syllabus

In February 1978, petitioner Crown Life Insurance Co. terminated its relationship with its agent, respondent Malley-Duff & Associates (Malley-Duff), for failure to satisfy a production quota. Alleging, inter alia, that the real reason for the termination was petitioners' desire to acquire its lucrative territory, Malley-Duff brought suit in March, 1981, under the Racketeer Influenced and Corrupt Organizations Act (RICO). The Federal District Court granted petitioners' summary judgment motion, dismissing the RICO claims on the ground that they were barred by Pennsylvania's 2-year fraud statute of limitations. In the absence of a RICO statute of limitations, the court concluded that the 2-year statute was the best state law analogy. However, the Court of Appeals reversed, holding that the State's "catchall" 6-year residual statute of limitations contained the appropriate limitations period for all RICO claims arising in the State.

Held:

1. The 4-year statute of limitations applicable to Clayton Act civil enforcement actions, 15 U.S.C. § 15b, applies in RICO civil enforcement actions. Because the predicate acts that may establish a civil RICO violation are far ranging and cannot be reduced to a single generic classification, and because important RICO concepts were unknown to common law, there is a need for a uniform limitations period for civil RICO in order to avoid intolerable uncertainty for parties and time-consuming litigation. The Clayton Act offers the closest analogy to civil RICO, in light of similarities in purpose and structure between the statutes, and the clear legislative intent to pattern RICO's civil enforcement provision on the Clayton Act's. Moreover, the Clayton Act provides a far closer analogy to RICO than any state statute. It is unlikely that Congress intended state "catchall" statutes of limitations to apply, or that such statutes would fairly serve the federal interests vindicated by RICO, and, in those States that do not have catchalls, any selection [107 S.Ct. 2761] of a state statute would be at odds with RICO's sui generis nature. RICO cases

Page 144

commonly involve interstate transactions, and the possibility of a multiplicity of applicable state limitations periods presents the dangers of forum-shopping and of complex, expensive, and unnecessary litigation. Application of a uniform federal period also avoids the possibility that application of unduly short state periods would thwart the legislative purpose of providing an effective remedy. Section 15b is preferable to the "catchall" federal 5-year statute of limitations that applies in RICO criminal prosecutions, since that statute does not reflect any congressional balancing of the competing equities unique to RICO civil enforcement actions. Pp. 146-156.

2. Because this litigation was filed less than four years after Malley-Duff's termination as Crown Life's agent, which is the earliest time Malley-Duff's RICO action could have accrued, the litigation is timely. Pp. 156-157.

792 F.2d 341, affirmed.

O'CONNOR, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and BRENNAN, WHITE, MARSHALL, BLACKMUN, POWELL, and STEVENS, JJ., joined. SCALIA, J., filed an opinion concurring in the judgment, post p. 157.

O'CONNOR, J., lead opinion

JUSTICE O'CONNOR delivered the opinion of the Court.

At issue in these consolidated cases is the appropriate statute of limitations for civil enforcement actions under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1964 (1982 ed. and Supp. III).

Page 145

Petitioner Crown Life Insurance Company (Crown Life) is a Canadian corporation engaged in the business of selling life, health, and casualty insurance policies. Respondent Malley-Duff & Associates, Inc. (Malley-Duff), was an agent of Crown Life for a territory in the Pittsburgh area. Crown Life terminated Malley-Duff's agency on February 13, 1978, after Malley-Duff failed to satisfy a production quota. This case is the second of two actions brought by Malley-Duff following that termination.

In April, 1978, Malley-Duff filed its first suit (Malley-Duff I) against the petitioners in the United States District Court for the Western District of Pennsylvania, alleging violations of the federal antitrust laws and a state law claim for tortious interference with contract. See 734 F.2d 133 (CA3 1984). Before the antitrust action was brought to trial, however, on March 20, 1981, Malley-Duff brought this action (Malley-Duff II) in the same court, alleging causes of action under RICO, 42 U.S.C. § 1985, and state civil conspiracy law. Initially, Malley-Duff II was consolidated with Malley-Duff I, but the two cases were severed before trial. Only the RICO claim of Malley-Duff II is at issue before this Court.

The RICO claim arose out of two alleged incidents. First, Malley-Duff alleges that Crown Life, together with several Crown Life employees and petitioner Agency Holding Corporation, formed an enterprise whose purpose was to acquire by false and fraudulent means and pretenses various Crown Life agencies that had lucrative territories. This enterprise allegedly acquired Malley-Duff's agency by imposing an impossibly high annual production quota on Malley-Duff nine months into fiscal year 1977 and then terminating the agency when Malley-Duff failed to meet this quota. Malley-Duff further alleges that the petitioners used a similar scheme to acquire Crown Life agencies in other cities. Second, Malley-Duff alleges that the petitioners [107 S.Ct. 2762] obstructed justice during the course of discovery in Malley-Duff I.

Page 146

On July 29, 1982, the petitioners filed a motion for summary judgment. The District Court granted this motion and entered judgment for the petitioners on all counts. The District Court dismissed Malley-Duff's RICO claims on the ground that they were barred by Pennsylvania's 2-year statute of limitations period for fraud, 42 Pa.Cons.Stat. § 5524(7) (1982), concluding that this was the best state law analogy for Malley-Duff's claims. The Court of Appeals for the Third Circuit reversed. In its view, under Wilson v. Garcia, 471 U.S. 261 (1985), Pennsylvania's "catchall" 6-year residual statute of limitations, § 5527, was the appropriate statute of limitations for all RICO claims arising in Pennsylvania. 792 F.2d 341 (1986). We granted certiorari, 479 U.S. 983 (1986), to resolve the important question of the appropriate statute of limitations for civil enforcement actions brought under RICO.

II

As is sometimes the case with federal statutes, RICO does not provide an express statute of limitations for actions brought under its civil enforcement provision. Although it has been suggested that federal courts always should apply the state statute of limitations most analogous to each individual case whenever a federal statute is silent on the proper limitations period, see Wilson v. Garcia, supra, at 280 (dissent); DelCostello v. Teamsters, 462 U.S. 151, 174 (1983) (O'CONNOR, J., dissenting), a clear majority of the Court rejected such a single path. Instead, the Court has stated:

In such situations, we do not ordinarily assume that Congress intended that there be no time limit on actions at all; rather, our task is to "borrow" the most suitable statute or other rule of timeliness from some other source. We have generally concluded that Congress intended that the courts apply the most closely analogous statute of limitations under state law.

The implied absorption of State statutes of limitation within the interstices of the federal enactments is a phase of fashioning

Page 147

remedial details where Congress has not spoken, but left matters for judicial determination within the general framework of familiar legal principles.

DelCostello v. Teamsters, supra, at 158-159, quoting Holmberg v. Armbrecht, 327 U.S. 392, 395 (1946).

The characterization of a federal claim for purposes of selecting the appropriate statute of limitations is generally a question of federal law, Wilson v. Garcia, supra, at 269-270, and in determining the appropriate statute of limitations, the initial inquiry is whether all claims arising out of the federal statute

should be characterized in the same way, or whether they should be evaluated differently depending upon the varying factual circumstances and legal theories presented in each individual case.

471 U.S. at 268. Once this characterization is made, the next inquiry is whether a federal or state statute of limitations should be used. We have held that the Rules of Decision Act, 28 U.S.C. § 1652, requires application of state statutes of limitations unless "a timeliness rule drawn from elsewhere in federal law should be applied." DelCostello v. Teamsters, 462 U.S. at 159, n. 13; see also id. at 174, n. 1 (O'CONNOR, J., dissenting). Given our longstanding practice of borrowing state law, and the congressional awareness of this practice, we can generally assume that Congress intends by its silence that we borrow state law. In some limited circumstances, however, our characterization of a federal claim has led the Court to conclude that

state statutes of limitations can be unsatisfactory vehicles for the enforcement of federal law. In those instances, it may be inappropriate to [107 S.Ct. 2763] conclude that Congress would choose to adopt state rules at odds with the purpose or operation of federal substantive law.

DelCostello v. Teamsters, supra, at 161. While the mere fact that state law fails to provide a perfect analogy to the federal cause of action is never itself sufficient to justify the use of a federal statute of...

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1091 practice notes
  • 120 B.R. 881 (Bkrtcy.S.D.Ohio 1990), 2-85-00661, In re Lee Way Holding Co.
    • United States
    • Federal Cases United States Bankruptcy Courts Sixth Circuit
    • 16 Octubre 1990
    ...whether the statute of limitations as to the RICO claim may have expired. See, Agency Holding Corp. v. Malley-Duff and Associates, Inc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987) (holding that the four-year statute of limitations under the Clayton Act applies to civil RICO [23] Pe......
  • 339 F.Supp.2d 1105 (D.Or. 2004), Civ. 02-1688, Towne v. Robbins
    • United States
    • Federal Cases United States District Courts 9th Circuit District of Oregon
    • 12 Octubre 2004
    ...agree that the limitations period applicable to federal RICO actions is four years. See Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143, 156, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987). The Ninth Circuit follows the "injury discovery" rule in deciding whether civil RICO......
  • 6 F.3d 876 (2nd Cir. 1993), 768, Long Island Lighting Co. v. Imo Industries Inc.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Second Circuit
    • 22 Septiembre 1993
    ...held that LILCO's RICO claims accrued in 1977 and accordingly were untimely. See Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 156, 107 S.Ct. 2759, 2767, 97 L.Ed.2d 121 (1987) (RICO claims subject to four-year statute of limitations). Relying upon Cruden v. Bank of ......
  • 692 F.Supp. 466 (E.D.Pa. 1988), Civ. A. 86-4327, Keystone Ins. Co. v. Houghton
    • United States
    • Federal Cases United States District Courts 3th Circuit Eastern District of Pennsylvania
    • 19 Abril 1988
    ...the complaint within four years from the date on which the action accrued. Agency Holding Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987) (hereinafter " Malley-Duff "). As the parties have failed to adequately address the parameters......
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1041 cases
  • 120 B.R. 881 (Bkrtcy.S.D.Ohio 1990), 2-85-00661, In re Lee Way Holding Co.
    • United States
    • Federal Cases United States Bankruptcy Courts Sixth Circuit
    • 16 Octubre 1990
    ...whether the statute of limitations as to the RICO claim may have expired. See, Agency Holding Corp. v. Malley-Duff and Associates, Inc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987) (holding that the four-year statute of limitations under the Clayton Act applies to civil RICO [23] Pe......
  • 339 F.Supp.2d 1105 (D.Or. 2004), Civ. 02-1688, Towne v. Robbins
    • United States
    • Federal Cases United States District Courts 9th Circuit District of Oregon
    • 12 Octubre 2004
    ...agree that the limitations period applicable to federal RICO actions is four years. See Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143, 156, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987). The Ninth Circuit follows the "injury discovery" rule in deciding whether civil RICO......
  • 6 F.3d 876 (2nd Cir. 1993), 768, Long Island Lighting Co. v. Imo Industries Inc.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Second Circuit
    • 22 Septiembre 1993
    ...held that LILCO's RICO claims accrued in 1977 and accordingly were untimely. See Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 156, 107 S.Ct. 2759, 2767, 97 L.Ed.2d 121 (1987) (RICO claims subject to four-year statute of limitations). Relying upon Cruden v. Bank of ......
  • 692 F.Supp. 466 (E.D.Pa. 1988), Civ. A. 86-4327, Keystone Ins. Co. v. Houghton
    • United States
    • Federal Cases United States District Courts 3th Circuit Eastern District of Pennsylvania
    • 19 Abril 1988
    ...the complaint within four years from the date on which the action accrued. Agency Holding Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987) (hereinafter " Malley-Duff "). As the parties have failed to adequately address the parameters......
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4 firm's commentaries
  • Written Statement Of The Chamber Of Commerce And The U.S Chamber Institute For Legal Reform In Opposition To S.2041 The False Claims Act Corrections Act Of 2007- Part Two
    • United States
    • Mondaq United States
    • 3 Marzo 2008
    ...fees. All civil claims under RICO are subject to a 4-year statute of limitations. Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143 (1987). The Supreme Court based its decision in Agency Holding Corp. on the statute of limitations period found in the civil enforcement pr......
  • Walking the Line Between Marketing and Malfeasance
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    • JD Supra United States
    • 7 Octubre 2019
    ...term as the default statute of limitations for criminal actions.” Id. (citing Agency Holding Corp. v. Malley-Duff & Assoc., Inc., 483 U.S. 143 (1987)). There is a four-year statute of limitations for civil RICO actions. [51] See Id. [52] See 42 U.S.C.A § 1320(a)-7b(b)(2). [53] Indictmen......
  • Pro Te: Solutio – Vol. 12, No. 3
    • United States
    • JD Supra United States
    • 3 Octubre 2019
    ...term as the default statute of limitations for criminal actions.” Id. (citing Agency Holding Corp. v. Malley-Duff & Assoc., Inc., 483 U.S. 143 (1987)). There is a four-year statute of limitations for civil RICO actions. Id. 51See Id. 52See 42 U.S.C.A § 1320(a)-7b(b)(2). 53Indictment, ¶ ......
  • Walking The Line Between Marketing And Malfeasance
    • United States
    • Mondaq United States
    • 16 Octubre 2019
    ...term as the default statute of limitations for criminal actions." Id. (citing Agency Holding Corp. v. Malley-Duff & Assoc., Inc., 483 U.S. 143 (1987)). There is a four-year statute of limitations for civil RICO actions. Id. 51 See Id. 52 See 42 U.S.C.A § 1320(a)-7b(b)(2). 53 Indict......
46 books & journal articles
  • Federal criminal conspiracy.
    • United States
    • American Criminal Law Review Vol. 48 Nbr. 2, March 2011
    • 22 Marzo 2011
    ...than the statute of limitations of the substantive offense); see, e.g., Agency Holding Corp. v. Malley-Duff & Assoc., Inc., 483 U.S. 143, 156 (1987) (holding [section] 3282 applies to RICO statute); see also supra note 9 and accompanying text (listing examples of other federal statutes ......
  • Racketeer influenced and corrupt organizations.
    • United States
    • American Criminal Law Review Vol. 49 Nbr. 2, March 2012
    • 22 Marzo 2012
    ...United States v. Gray, 292 F. Supp. 2d 71, 89 (D.D.C. 2003) (citing Griffin in upholding a RICO jury's guilty verdict). (189.) 483 U.S. 143 (190.) See id. at 146--49 (reasoning that given the lack of uniformity among state statutes of limitations, the Court was to "borrow" the rul......
  • Life after Morrison: extraterritoriality and RICO.
    • United States
    • Vanderbilt Journal of Transnational Law Vol. 44 Nbr. 5, November 2011
    • 1 Noviembre 2011
    ...organized under domestic law. Id. (172.) Cedeno, 733 F. Supp. 2d at 473. (173.) Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 154 (1987) (per curiam). (174.) Cedeno, 733 F. Supp. 2d at 473; In re Le-Nature's, 2011 WL 2112533, at *3. (175.) See Kauthar SDN BHD v. Ste......
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    • United States
    • Yale Law Journal Vol. 107 Nbr. 2, November 1997
    • 1 Noviembre 1997
    ...federal rights of action as "longstanding" and "settled" (quoting Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143, 147 (1987); Wilson, 471 U.S. at 266). (6.) See Short v. Belleville Shoe Mfg. Co., 908 F.2d 1385, 1394 (7th Cit. 1990) (Posner, J., concurrin......
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