Agency Holding Corporation v. Associates, Inc Crown Life Insurance Company v. Associates, Inc, MALLEY-DUFF

CourtUnited States Supreme Court
Writing for the CourtO'CONNOR, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and BRENNAN, WHITE, MARSHALL, BLACKMUN, POWELL, and STEVENS, JJ., joined. SCALIA
Citation107 S.Ct. 2759,97 L.Ed.2d 121,483 U.S. 143
Decision Date22 June 1987
Docket Number86-531,Nos. 86-497,MALLEY-DUFF
PartiesAGENCY HOLDING CORPORATION, et al., Petitioners, v. & ASSOCIATES, INC. CROWN LIFE INSURANCE COMPANY, et al., Petitioners, v.& ASSOCIATES, INC., et al

483 U.S. 143
107 S.Ct. 2759
97 L.Ed.2d 121
AGENCY HOLDING CORPORATION, et al., Petitioners,

v.

MALLEY-DUFF & ASSOCIATES, INC. CROWN LIFE INSURANCE COMPANY, et al., Petitioners, v. MALLEY-DUFF & ASSOCIATES, INC., et al.

Nos. 86-497, 86-531.
Argued April 21, 1987.
Decided June 22, 1987.
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 of a state statute would be at odds with RICO's sui generis nature. RICO cases

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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 (CA3 1986), 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.

Robert L. Frantz, Pittsburgh, Pa., for petitioners in No. 86-531.

John H. Bingler, Jr., Pittsburgh, Pa., for petitioners in No. 86-497.

Harry Woodruff Turner, Pittsburgh, Pa., for respondents in both cases.

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

I

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 ) 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 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, 105 S.Ct. 1938, 85 L.Ed.2d 254 (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, 107 S.Ct. 569, 93 L.Ed.2d 573 (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, 471 U.S., at 280, 105 S.Ct., at 1949 (dissent); DelCostello v. Teamsters, 462 U.S. 151, 174, 103 S.Ct. 2281, 2296, 76 L.Ed.2d 476 (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 fash-

Page 147

ioning 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, 103 S.Ct., at 2287-2288, quoting Holmberg v. Armbrecht, 327 U.S. 392, 395, 66 S.Ct. 582, 584, 90 L.Ed. 743 (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, 471 U.S., at 269-270, 105 S.Ct., at 1942-1944, 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, 105 S.Ct., at 1942. 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, 103 S.Ct., at 2288, n. 13; see also id., at 174, n. 1, 103 S.Ct., at 2295, 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...

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1062 practice notes
  • Ceres Partners v. GEL Associates, No. 390
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • November 8, 1990
    ...open the possibility that the courts should look to a federal statute instead. See Agency Holding Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987); DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476......
  • In re Libor-Based Fin. Instruments Antitrust Litig., 11 MDL 2262 (NRB)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • August 4, 2015
    ...811 F.2d 698, 721 (2d Cir. 1987) (collecting cases), abrogated on other grounds, Agency Holding Corp. v. Malley Duff & Assocs., Inc., 483 U.S. 143 (1987). One recent case in this Court appears to apply tolling cross-jurisdictionally without discussing the issue. See Sapirstein-Stone-Weiss F......
  • Allstate Ins. v. Valley Physical Medicine & Rehab., No. 05-5934(DRH)(MLO).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • February 21, 2007
    ...of limitations. Civil RICO claims are subject to a four-year statute of limitations. Agency Holding Corp. v. Malley-Duff & Assoc., Inc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987). The statute begins to run "when the plaintiff discovers or should have discovered the RICO injury." T......
  • Krowel v. Massad (In re Fiorillo), Bankruptcy Nos. 10–44179 MSH, 11–43854 MSH.
    • United States
    • United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Massachusetts
    • June 3, 2013
    ...that a four year statute of limitations is applicable to civil RICO actions. Agency Holding Corp. v. Malley–Duff & Assoc., Inc., 483 U.S. 143, 150–56, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987). Unlike the limitations period for criminal RICO violations which begins to run with the last predicat......
  • Request a trial to view additional results
1065 cases
  • Ceres Partners v. GEL Associates, No. 390
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • November 8, 1990
    ...open the possibility that the courts should look to a federal statute instead. See Agency Holding Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987); DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476......
  • In re Libor-Based Fin. Instruments Antitrust Litig., 11 MDL 2262 (NRB)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • August 4, 2015
    ...811 F.2d 698, 721 (2d Cir. 1987) (collecting cases), abrogated on other grounds, Agency Holding Corp. v. Malley Duff & Assocs., Inc., 483 U.S. 143 (1987). One recent case in this Court appears to apply tolling cross-jurisdictionally without discussing the issue. See Sapirstein-Stone-Weiss F......
  • Allstate Ins. v. Valley Physical Medicine & Rehab., No. 05-5934(DRH)(MLO).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • February 21, 2007
    ...of limitations. Civil RICO claims are subject to a four-year statute of limitations. Agency Holding Corp. v. Malley-Duff & Assoc., Inc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987). The statute begins to run "when the plaintiff discovers or should have discovered the RICO injury." T......
  • Krowel v. Massad (In re Fiorillo), Bankruptcy Nos. 10–44179 MSH, 11–43854 MSH.
    • United States
    • United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Massachusetts
    • June 3, 2013
    ...that a four year statute of limitations is applicable to civil RICO actions. Agency Holding Corp. v. Malley–Duff & Assoc., Inc., 483 U.S. 143, 150–56, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987). Unlike the limitations period for criminal RICO violations which begins to run with the last predicat......
  • Request a trial to view additional results
1 books & journal articles
  • RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
    • United States
    • American Criminal Law Review Nbr. 58-3, July 2021
    • July 1, 2021
    ...conviction); United States v. Gray, 292 F. Supp. 2d 71, 89 (D.D.C. 2003) (citing Griff‌in in upholding a RICO jury’s guilty verdict). 175. 483 U.S. 143, 156 (1987) (reasoning that because a close analogy to the RICO statute is found in Federal law i.e. the Clayton Act and because no such an......

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