Opinion ID: 71650
Heading Depth: 4
Heading Rank: 1

Heading: The Proper Accrual Period Of Civil RICO Claims

Text: Civil RICO actions are subject to a four-year statute of limitations. Bivens Gardens Office Bldg., Inc. v. Barnett Bank, 906 F.2d 1546, 1550 (11th Cir.1990), cert. denied, 500 U.S. 910, 111 S.Ct. 1695, 114 L.Ed.2d 89 (1991), citing Agency Holding Corp. v. Malley-Duff & Assoc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987). The Supreme Court in Agency Holding, however, expressly left open the question of when a civil RICO cause of action begins to accrue. Bivens, 906 F.2d at 1550. In Bivens, this court was called upon to decide the appropriate accrual rule to apply when the complaint alleges that, as the result of a conspiracy to violate RICO and substantive violations of RICO, the plaintiffs suffered several independent harms at the hands of the defendants over a period of eight years. Id. at 1550. Adopting the rule of separate accrual, this court joined the Third Circuit in Keystone Insurance Co. v. Houghton, 863 F.2d 1125 (3d Cir.1988), in holding that when a plaintiff [is] injured by one or more predicate acts, a civil RICO cause of action for damages will not accrue until the plaintiff knows, or should have known, of his injury and that the injury is part of a pattern of racketeering activity. Id. at 1554. The plaintiffs in Bivens alleged three injuries: (1) the wrongful takeover of Bivens Center, Inc.; (2) the mismanagement and diversion of corporate assets; and (3) the wrongful sale of the Bivens Gardens Hotel for less than its fair market value. Id. at 1551. They alleged that these injuries were continuing and independent so as to extend the accrual period for each RICO claim. Id. at 1552. We held that the injuries were separate and independent from the injuries flowing from the wrongful takeover of the hotel. Id. at 1556. Thus, under the accrual rule announced by this court in Bivens, a new RICO claim would begin to accrue when the plaintiffs knew, or should have known, about a new and independent injury and that the new and independent injury was the result of a pattern of racketeering activity. See id. In determining that these injuries were separate and independent injuries, the Bivens court cited with approval the language of the Second Circuit in Bankers Trust Co. v. Rhoades, 859 F.2d 1096, 1103 (2d Cir.1988), cert. denied, 490 U.S. 1007, 109 S.Ct. 1642, 104 L.Ed.2d 158 (1989), that new and independent injuries would begin a new accrual period for the plaintiff's RICO claims. Id. at 1552. Applying the rules set forth in Bivens to the present case, we find that the district court was correct in dismissing plaintiffs' RICO claims due to the running of the statute of limitations. For purposes of this analysis, the court will assume that plaintiffs' RICO claims, first pleaded in their amended complaint in March 23, 1994, were made retroactive to the date of their original petition, July 24, 1992. The district court found that the plaintiffs knew, or should have known, of their injury and that it resulted from a pattern of racketeering activity by 1987, at the latest. In 1986, plaintiff Arnold D. Pilkington and other pilots formed an association known as the Fleet Qualified Pilots Association (FQPA). Apparently, this organization was formed to address and combat the continuing harassment that non-striking United pilots faced from ALPA members. In July of 1987, Pilkington and another pilot mailed letters to the fleet qualified pilots asking for support of the FQPA. According to the district court, these letters indicated that by July of 1987, the pilots (1) believed that their mental distress and intolerable work situation were caused by the alleged pattern of harassment by striking pilots that had begun two years before; (2) believed ALPA and United were responsible for the harassment; and (3) had consulted counsel with respect to injuries suffered as a result of the harassment. These letters, contained in the record, clearly establish that by the period of July 1987 to December 1987, the fleet qualified pilots, including the plaintiffs, had knowledge of their injuries and knew that the injuries were caused by a pattern of harassment that had begun as early as May of 1985. Thus, the plaintiffs' RICO claims must have been filed by December 1991, at the latest, to avoid the terminal effect of the statute of limitations. Plaintiffs, who filed their RICO claims on July 24, 1992, did not file their RICO claims timely. Other facts in the record indicate that plaintiffs had knowledge of their injuries and that the injuries resulted from the pattern of harassment more than four years prior to July 1992. In the original and amended complaints, plaintiffs allege that the harassment began and became pervasive by the time the strike was ending in late June of 1985. The allegations in the complaint make it clear that the plaintiffs knew soon thereafter that the harassment would continue, that it was part of a pattern, that it was affecting their job performance, and that it was causing mental and emotional suffering. The plaintiffs allege that this ongoing pattern of harassment began in 1985. Thus, soon thereafter the plaintiffs either knew, or should have known, that they were suffering injuries and that the injuries were the result of a pattern of harassment. Thus, at the latest, the plaintiffs should have known of their injuries by July of 1987. At the earliest, plaintiff's should have known of their injuries as July of 1986, one year after the continuous harassment began. Plaintiffs did not file suit until six years after July 1986 and five years after July of 1987.3 Plaintiffs contend, however, that they did not know, or could not have known, that they had been injured in their business or property until 1990 when plaintiff Leonard Gieschen (Gieschen) elected to take an unpaid personal leave of absence from which he never returned. It is alleged that Gieschen left his employment with United due to the toll that the harassment had taken on his job performance as well as his mental and emotional well being. The damages alleged by Gieschen, however, are not mentioned in either complaint filed by the plaintiffs. This issue is raised before this court in the briefs filed by the plaintiffs and the supplemental brief filed by Gieschen. In his brief, Gieschen alleges that severe depression and mental and emotional problems caused his leave of absence from United in 1990. To the extent that Gieschen, or any other plaintiff, seeks to recover under RICO for personal injury, or pecuniary losses resulting from personal injury, this claim is not cognizable under RICO. See Grogan v. Platt, 835 F.2d 844 (11th Cir.), cert. denied, 488 U.S. 981, 109 S.Ct. 531, 102 L.Ed.2d 562 (1988) (Kravitch, J.). In Grogan we stated: [i]n our view, the ordinary meaning of the phrase injured in his business or property' excludes personal injuries, including the pecuniary losses therefrom. Id. at 847. Thus, to the extent that the plaintiffs claim that the emotional 3 Of interest to the court is the fact that on October 13, 1989, seven of the nine plaintiffs in this action filed suit in the Northern District of Illinois (Pilkington v. Air Line Pilots Assoc., International, No. 89 C 7754 (N.D.Ill.1989)) against ALPA and United alleging, inter alia, that they had undergone a four year campaign of harassment. The suit was voluntarily dismissed by the plaintiffs soon after its filing. and mental distress suffered by the harassment caused them an injur[y] in [their] business or property, this claim is unavailing. The plaintiffs' reliance on this type of injury to avoid the statute of limitations is also misplaced. An injury not cognizable under RICO will not suffice as an injury sufficient to begin the act's accrual period. Moreover, Gieschen knew, or should have known, of his injury—injury cognizable under RICO, such as injury in his business or property, other than personal injury—many years prior to 1990. The first amended complaint alleges that Gieschen was first harassed on August 20, 1985. He was then harassed in July of 1986, and again in August of 1987. Essentially, Gieschen was undergoing the same pattern of harassment alleged by all plaintiffs that began soon after the strike ended in 1985. Therefore, Gieschen knew or should have known of his injury and that the injury was the result of a pattern of racketeering activity as early as July 1986 or as late as August 1987. Suit was filed in July of 1992, more than four years after either of these dates.