Opinion ID: 171221
Heading Depth: 2
Heading Rank: 2

Heading: Federal Civil RICO

Text: Defendants argue that we should affirm the dismissal of Mr. Dummar's federal civil RICO claim because, among other reasons, it fails to state a claim and is time-barred. Mr. Dummar has not responded on appeal to their argument that he has not pleaded essential elements of a RICO claim. Perhaps we could affirm based on this failure to respond. Cf. Utah ex rel. Div. of Foresty, Fire & State Lands v. United States, 528 F.3d 712, 724 (10th Cir.2008) (failure to challenge alternative holding of district court constitutes waiver). But we choose instead to dispose of the claim because it is time-barred  an argument that Mr. Dummar did, at least nominally, address. To bring a civil RICO claim, a plaintiff must allege that he was injured in his business or property by the RICO violation. Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985). A RICO violation requires: (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. Id. (footnote omitted). A pattern of racketeering activity requires at least two acts of racketeering activity. See 18 U.S.C. § 1961(5). The RICO statute lists a number of crimes that constitute racketeering activity. See id. § 1961(1). The Supreme Court has held that a civil federal RICO action is subject to a four-year limitations period. See Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 156, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987). Although the Court has not settled upon a definitive rule for when the limitations clock starts running, it has announced two possibilities: either when the plaintiff knew or should have known of his injury (the injury-discovery rule); or when the plaintiff was injured, whether he was aware of the injury or not (the injury-occurrence rule). Cory v. Aztec Steel Bldg., Inc., 468 F.3d 1226, 1234 (10th Cir.2006). In either case the plaintiff need not be aware of the pattern of racketeering activity. See Rotella v. Wood, 528 U.S. 549, 553-54, 120 S.Ct. 1075, 145 L.Ed.2d 1047 (2000); id. at 555, 120 S.Ct. 1075 (even if a discovery accrual rule applies, discovery of the injury, not discovery of the other elements of a claim, is what starts the clock). It is unnecessary for us to choose between the two rules today, because it cannot be disputed that Mr. Dummar's injury and his discovery of that injury occurred simultaneously, when the jury returned its verdict that the Holographic Will was invalid. The limitations period therefore began running against him in 1978. Mr. Dummar asserts, however, that [o]n federal causes of action, fraudulent concealment is read into every statute of limitations. Aplt. Reply Br. at 8. From this we gather that he means to argue, as he did before the district court, that the limitations period should be tolled because of fraudulent concealment of the alleged RICO activity. The Supreme Court has recognized that equitable tolling may be available under RICO, see Rotella, 528 U.S. at 560-61, 120 S.Ct. 1075, and we have stated that a RICO cause of action can be tolled by fraudulent concealment when the plaintiff establishes (1) the use of fraudulent means by the party who raises the ban of the statute; (2) successful concealment from the injured party; and (3) that the party claiming fraudulent concealment did not know or by the exercise of due diligence could not have known that he might have a cause of action. Ballen v. Prudential Bache Sec., Inc., 23 F.3d 335, 337 (10th Cir.1994) (internal quotation marks omitted). Allegations of fraudulent concealment, like other types of fraud, must be pleaded with particularity. See Great Plains Trust Co. v. Union Pac. R.R. Co., 492 F.3d 986, 995 (8th Cir.2007). Mr. Dummar has made no attempt on appeal to show that he pleaded the elements of fraudulent concealment. At any rate, such an attempt would be futile. To begin with, he has not adequately alleged successful concealment from [Mr. Dummar] of an element of his cause of action. The Complaint lists three acts alleged to support equitable tolling: (1) the actual perjury and misleading testimony of Hughes's aides, (2) the destruction of evidence in the flight logs of the specific flights taken by Hughes and the pilot in December 1967, and (3) the ongoing understanding of the employees of the Hughes entities ... of the enforceability of the non-disclosure agreements. J.App. at 31 (Compl. at ¶ 42). None of these is a sufficient allegation of fraudulent concealment. First, as explained in the above discussion of the fraud claim, Mr. Dummar had enough information concerning the perjury to begin the limitations period at the time of the probate trial; the perjury may have misled the jury, but not him. (We might add that tampering with witnesses in a state-court proceeding is not racketeering activity under the federal RICO statute. See Deck v. Engineered Laminates, 349 F.3d 1253, 1257 (10th Cir. 2003)). Second, the alteration of the flight logs (alleged to have occurred nearly ten years before the probate trial) did not prevent Mr. Dummar from discovering the falsity of testimony that Hughes had never left his hotel in December 1967. The alteration may have concealed evidence corroborating Mr. Dummar's testimony (such as the information later provided by the pilot), but it did not prevent him from knowing any element of his RICO claim. Third, we fail to see what is fraudulent about an employer requiring employees to sign nondisclosure agreements. Mr. Dummar does not allege that the agreements required anyone to make misrepresentations of any sort, let alone lie under oath. Even if we were also to consider allegations of wrongdoing not specifically referred to in the Complaint as fraudulent concealment, we would not find anything adequately alleging fraudulent concealment. Paragraph 22 of the Complaint alleges that Defendants ordered, bribed, and coerced Hughes's aides to commit perjury. This allegation supports an element of the RICO claim  namely, that Defendants bore responsibility for the perjury and other misconduct in the probate proceedings. But there is no allegation in the Complaint, or suggestion elsewhere in the record, that Mr. Dummar acquired any specific evidence of this misconduct during the four years before filing the Complaint. On the contrary, the allegations in paragraph 22 appear to be merely inferences by Mr. Dummar. Paragraph 19 of the Complaint states that based upon their positions of control in [Hughes's enterprises], their personal involvement in the litigation and trial, as well as their personal motives and other facts alleged [in the Complaint], Plaintiff reasonably believes and alleges that Defendants ... knew of and coordinated [the aides'] false testimony. J.App. at 20. We question whether the allegations of paragraph 22 are pleaded with sufficient particularity to support a claim of fraudulent concealment; but in any event, the absence of an allegation regarding how and when Mr. Dummar learned of the alleged misconduct forecloses a claim that Defendants' fraudulent concealment prevented Mr. Dummar from discovering Defendants' involvement until at least 2002  four years before filing suit. If the allegations in the paragraph are based on information acquired only in recent years, the Complaint needed to assert that. We also note that paragraph 18 of the Complaint alleges that shortly after Hughes's death, a meeting of his aides took place at which they decided that all would testify that Hughes never left his hotel during the relevant time period. Affidavits submitted by Mr. Dummar suggest that he learned of this meeting within four years of filing the Complaint. But neither the Complaint nor the affidavits say anything about Defendants' presence at, or other involvement with, that meeting. Again, Mr. Dummar has failed to explain why he could not have inferred Defendants' involvement in the perjury until more than 26 years after the probate trial. Not only has Mr. Dummar not alleged the concealment necessary to satisfy the second element of a claim of fraudulent concealment, but he has also not alleged the due diligence necessary to satisfy the third element. See Ballen, 23 F.3d at 337; Klehr v. A.O. Smith Corp., 521 U.S. 179, 194-96, 117 S.Ct. 1984, 138 L.Ed.2d 373 (1997). The Complaint is completely silent as to any efforts that Mr. Dummar made to uncover his cause of action during the first 26 years after the probate trial. Mr. Dummar did not show entitlement to equitable tolling, and his claim is therefore barred by the civil RICO limitations period. Dismissal of this claim was proper.