Opinion ID: 785203
Heading Depth: 2
Heading Rank: 1

Heading: Test for Accrual of Civil RICO Claims

Text: 22 In Malley-Duff, the Supreme Court left open the question of when the statute of limitations for civil RICO claims begins to accrue. It has not resolved that issue but it has rejected several standards this court had used to determine when the RICO statute of limitations period accrues. Although most of the Courts of Appeals at that time applied forms of an injury and pattern discovery rule for determining the accrual of RICO claims, this court applied a last predicate act exception under which [if], as a part of the same pattern of racketeering activity, there is further injury to the plaintiff or further predicate acts occur, ... the accrual period shall run from the time when the plaintiff knew or should have known of the last injury or the last predicate act which is part of the same pattern of racketeering activity. The last predicate act need not have resulted in injury to the plaintiff but must be part of the same `pattern.' Keystone Ins. Co. v. Houghton, 863 F.2d 1125, 1126 (3d Cir.1988). In Klehr v. A.O. Smith Corp., 521 U.S. 179, 117 S.Ct. 1984, 138 L.Ed.2d 373 (1997), the Supreme Court rejected the Third Circuit exception. The Court reasoned that such a test would result in a limitations period longer than that which Congress could have contemplated, as well as would improperly allow claimants to recover for injuries outside of the limitations period by bootstrapping them onto a later and independent predicate act. Klehr, 521 U.S. at 187-90, 117 S.Ct. 1984. 23 A few years later, in Rotella v. Wood, 528 U.S. 549, 120 S.Ct. 1075, 145 L.Ed.2d 1047 (2000), the Supreme Court also rejected the injury and pattern discovery rule itself, under which the statute of limitations begins to run when the plaintiff knew or should have known that each element of a civil RICO claim existed: the injury, the source of the injury, and the pattern of activities prohibited under RICO causing the injury. Id. at 554, 120 S.Ct. 1075. However, the Court did not settle upon a final rule, noting that among available remaining alternatives were the injury discovery rule and the injury occurrence rule. Id. at 554 n. 2. 24 After Rotella, we adopted the injury discovery rule in Forbes v. Eagleson, 228 F.3d 471 (3d Cir.2000), holding that in determining statute of limitations issues in civil RICO claims we must determine when the plaintiffs knew or should have known of their injury. Id. at 484. In addition to the injury, the plaintiffs must also have known or should have known of the source of their injury. Id. at 485. As we explained in Forbes, nothing more than these two requirements was required to trigger the running of the four-year limitations period [of a civil RICO claim]. Id. (citations omitted). 25 Prudential does not dispute that the injury discovery rule is the governing legal standard in this case. It quarrels, rather, with that rule's application in this case. Specifically, Prudential argues that, based on the record of this case, it could not have known its injuries prior to October 20, 1983, and that in any event, the injury it suffered must be an actual injury before the statute of limitations is triggered. 26