Legal Document

521 U.S. 179117 S.Ct. 1984138 L.Ed.2d 373 Marvin KLEHR, et ux., Petitionersv.A.O. SMITH CORPORATION and A.O. Smith Harvestore Products, Inc. No. 96-663. Supreme Court of the United States Argued April 21, 1997. Decided June 19, Syllabus * The Racketeer Influenced Corrupt Organizations Act (RICO) makes it a crime "to conduct'' an "enterprise's affairs through pattern racketeering activity.'' 18 U.S.C. §1962(c). A "pattern'' requires at least two acts activity, last which occurred within 10 years after commission prior act. §1961(5). person injured by violation RICO's criminal provisions may recover treble damages attorney's fees in civil RICO action, §1964(c), but actions are subject to 4-year limitations period §4B Clayton Act-the statute governing private antitrust seeking damages, Agency Holding Corp. v. Malley-Duff & Associates, Inc., 483 143, 156, 107 2759, 2767, 97 121. petitioners Klehr filed action against respondents (hereinafter Harvestore) August 1993, claiming that their injury began 1974, when they purchased Harvestore-brand silo for dairy farm based on Harvestore's false representations would prevent moldy fermented cattle feed, thereby producing healthier cows, more milk, higher profits. In fact, feed became both milk production profits declined. They added committed other predicate acts, consisting repeated misrepresentations Klehrs others, sales over many years. moved dismiss ground had run because Klehrs' claim accrued before 1989, no special legal doctrine applied toll running or estop from asserting defense. responded taken affirmative steps conceal its fraud, did not become sufficiently suspicious investigate discover mold until 1991. District found lawsuit untimely. Eighth Circuit affirmed, holding accrues as soon plaintiff discovers, reasonably should discover, existence source his is part pattern; suffered one single, continuous sometime 1970s have discovered well 1989. refused "fraudulent concealment'' theory because, among things, been diligent discovering claim. Like Circuit, some Circuits apply "injury discovery'' accrual rule; others rule, under begins knows know injury; Third applies "last act'' act pattern, whether himself has any Held: 1.The rule appropriate interpretation RICO. Pp. ____-____. (a) Only Circuit's can help Klehrs. For purposes assessing lawfulness, this assumes means long period, recover, just harm caused late-committed act, all make up total "pattern''; show such act; knowledgeable about pattern. P. (b) unlawful reasons. First, series continue indefinitely, creates longer than Congress could contemplated, conflict with basic objective-repose-underlying periods. See, e.g., Wilson Garcia, 471 261, 271, 105 1938, 1944, 85 254 (1985). Civil compensatory objective warranting so significant extension further purpose-encouraging potential plaintiffs diligently investigate, see Malley-Duff, U.S., 151, S.Ct., 2764-2765-suggests contrary. runs most recent does provide apt analogy actions. Id., 155-156, 2766-2767. Second, inconsistent Act, "a cause . defendant commits injures plaintiff's business.'' Zenith Radio Hazeltine Research, 401 321, 338, 91 795, 806, 28 77. generally useful cases, since consciously patterned since, time was enacted, Act's well-established. without modification every case. However, case knew facts underlying thus clear precisely where, how, goes too far. invoke "separate accrual'' adopted Circuits, similar "continuing violation'' antitrust, separate, new permits additional caused. Under separate however, cannot use independent, bootstrap injuries took place outside period. Grimmett Brown, 75 F.3d 506, 513 (C.A.9 1996). Thus taking 1989 do Klehrs, shown incorrect insofar allow presence them pre-1989 acts. This also present kind circumstance courts might permit were speculative unprovable starting first left relief. Zenith, supra, 339-340, 806-807, distinguished. (c) Resolving conflicts various discovery rules used affect outcome case, petitioners' barred liberal Circuit. There obvious error application beyond scope writ reconsider silo's flaws 2.A who trying rely upon requirement uniformly supported relevant authority related context, where invoked fairly often. And while those require "reasonable diligence'' contexts cases said concerned only defendants' behavior, respect these seek compensate victims encourage uncover activity. See 2764-2765. fact-based question properly "due evidentiary materials Court's writ. 87 231 (C.A.8 1996), affirmed. BREYER, J., delivered opinion Court, REHNQUIST, C.J., STEVENS, O'CONNOR, KENNEDY, SOUTER, GINSBURG, JJ., joined. SCALIA, concurring judgment, THOMAS, Charles A. Bird, Rochester, MN, petitioners. Bruce J. Ennis, Jr., Washington, DC, respondents. Justice BREYER Court. 1 petition asked us consider aspects "statute limitations'' law. One concerns date starts run. concealment,'' extends file suit. first, we focus upon, disapprove, followed called rule. second, hold unless he action. 2 (RICO), §§1961-1968, things phrase "racketeering activity'' term art defined terms activity violates laws, including 50 specifically mentioned federal statutes, forbid, example, murder-for-hire, extortion, kinds fraud. §1961(1). word "at ten 3 provision-commonly known RICO-permits " [a]ny business property reason fees. §1964(c). say what governs filing claims. But 121 (1987), held contained (Antitrust), 69 Stat. 283, amended, 15 §15b-the damages. 4 Mary Klehr, here, farmers. 27, Corporation, (whom shall simply call "Harvestore'') several mail wire §§1341, 1343, violating causing injury. Their injury, said, sold "Harvestore''-brand silo, storing feed. alleged bought reliance representations, made advertisements local dealer, limit amount oxygen contact silage, preventing claim, false; keep away fermented, cows ate bad went down. add acts-consisting primarily others-over 1974. 5 Harvestore, pointing out suit almost 20 suit, four filing, i.e., 25, nonetheless tolled estopped Holmberg Armbrecht, 327 392, 396-397, 66 582, 584-585, 90 L.Ed. 743 (1946); Bailey Glover, 21 Wall. 342, 349-350, 22 636 (1874); Cada Baxter Healthcare Corp., 920 F.2d 446, 450-451 (C.A.7 1990), cert. denied, 501 1261, 111 2916, 115 1079 (1991). 6 material designed support justification late filing. Essentially claimed covered fraud-preventing noticing malfunction-for unloading device hid chopping instantly emerged; continued dealer misrepresentations; tried convince farmers warm, brown, molasses-smelling good feed; even hanging itself plaque said: 7 "DANGER DO NOT ENTER ENOUGH OXYGEN 8 TO SUPPORT LIFE'' 9 Not 1991, time, opening wall ice chisel, ""mold silage.''' Brief Petitioners 16. examining evidence, affirmed dismissal, 11 ""as discovered, pattern.''' 231, 238 (1996) (quoting Association Commonwealth Claimants Moylan, 71 1398, 1402 1995)). 12 After evidence de novo, failed satisfy standard. It "one 1970s''; "the injury,'' "pattern,'' F.3d, 239. find "diligen[t].'' 238, 239, n. 11. 13 We granted certiorari light split Courts Appeals. Two like forms Bivens Gardens Office Building, Barnett Bank, 906 1546, 1554-1555 (C.A.11 500 910, 1695, 114 89 (1991); Bath Bushkin, Gaims, Gaines Jonas, 913 817, 820 (C.A.10 1990). Other "pattern.'' 511 dism'd improvidently granted, 519 ----, 117 759, 136 674 (1997); McCool Strata Oil Co., 972 1452, 1464-1465 1992); Rodriguez Banco Central, 917 664, 665-666 (C.A.1 1990); Bankers Trust Co. Rhoades, 859 1096, 1102 (C.A.2 1988), 490 1007, 109 1642, 1643, 104 158 (1989); Pocahontas Coal Bethlehem Steel 828 211, 220 (C.A.4 1987); Riddell Washington 866 1480, 1489-1490 (C.A.D.C.1989) (assuming, deciding, applies). court, discuss below. agreed decide argument necessary component concealment.'' 14 reasons describe, affirm judgment II rule-the rule-for believes (including "pattern activity'') existed, important exception, states follows: 16 [If], same there occur, need resulted must be pattern.'' Keystone Ins. Houghton, 863 1125, 1130 (C.A.3 1988). 17 rule's assume, (i.e., preceding suit), assume Finally, note point difference between nothing state mind knowledge. consequences Consequently, merits simplifying assumption perfectly knowledgeable. conclude proper pointed out, contemplated. Because occurring 10-year intervals) interpretation, principle, lengthens dramatically. objective-repose-that underlies (1985) (citing Adams Woods, Cranch 336, 297 (1805)); Crown, Cork Seal Parker, 462 345, 352, 103 2392, 2396-2397, 76 628 (1983). Indeed, defendant's wait, "sleeping rights,'' ibid., continues accumulate, perhaps bringing "memories witnesses faded lost.'' Wilson, 1944. warrant 19 recognize last, recent, differences actions, analogy. 2766-2767 (declining 5-year noting "competing equities unique or, indeed, remedy''). ordinary applicable damage 77 (1971); Connors Hallmark Son 935 (C.A.D.C.1991); C. Corman, Limitation Actions §6.5.5.1, p. 449 (1991) Corman); Areeda H. Hovenkamp, Antitrust Law ¶338b, 145 (rev. ed.1995) Areeda). pure always setting way traditional cases. single rather Furthermore, debate depends awareness certain elements As earlier, evaluating parties. Hence problems associated infra, Part II-B, issue. believe, circumstances, helpful. indicated why useful. concluded "that uniform RICO, clearly provides far closer available statute, policies lie behind practicalities litigation selection actions.'' 2767 §15b). 23 open question. explained, Act. 150-151, 2764-2765 (comparing §15(a) §1964(c)); Sedima, S.P.R.L. Imrex 473 479, 489, 3275, 3281, 346 established. Crummer DuPont, 223 247-248 (C.A.5), 350 848, 85, 100 755 (1955); Foster Kleiser Special Site Sign 742, 750-751 1936), 299 613, 57 315, 81 452 (1937); Bluefields S.S. Fruit 243 F. 1, 1917). 24 helps here law that, violation,'' price fixing conspiracy brings unlawfully high priced years, "each overt plaintiff,'' each sale plaintiff, "starts statutory again, regardless knowledge illegality much earlier times.'' Areeda, (footnote omitted); 806; Hanover Shoe, Shoe Machinery 392 481, 502, 15, 88 2224, 2236, 1231 (1968); DXS, Siemens Medical Systems, 462, 467 (C.A.6 old Pennsylvania Dental Assn. Serv. Assn., 815 270, 278 (C.A.3), 484 851, 108 153, 98 (1987); Hennegan Pacifico Creative Serv., 787 1299, 1300 (C.A.9), 479 886, 279, 93 (1986); National Souvenir Center Historic Figures, 728 503, 509 (C.A.D.C.), denied sub nom. C.M. Uberman Enterprises, 469 825, 103, 83 48 (1984); Imperial Point Colonnades Condominium, Mangurian, 549 1029, 1034-1035 (C.A.5 1977); 247-248. Compare 149. 25 Similarly, separable, But, Grimmett, 512-514; F.2d, 1465-1466, 10; 1552, 9; State Farm Mut. Auto. Ammann, 4, 1987) (Kennedy, concurring). Bingham Zolt, 553, 560 1995) Trust, 1103). printing advertisements. fact them, for, Appeals how above Nor incorrect. 26 Plaintiffs considered "speculative'' "unprovable,'' 339, (and initial injury) follow normal (starting causes accrue occurred, though earlier. 806-807. injuries-the farm-have specific calculable. B 27 our II-A resolve Circuits. "discovery'' rules, extend periods obtain key items information. reflect percentage unlike typical involve fraud 499, 16, 3286, (most claims offense); Mathews, Weissman Sturc, Litigation, 1-6 (2d ed.1992) Report Ad Hoc Task Force ABA Section Banking Business (1985)) (as 1985, approximately 90% resulting published decision involved mail, wire, securities cf. Connors, 342 (federal different rule); Corman (same). Moreover, differ, other, ways. Compare, 1103 (civil discovers when, addition, "source'' "pattern''). realize contrary II-A, supra (where discussed issue irrelevant), lacked faulty silo-the particular "lack knowledge'' "discovery rule'' "knowledge'' test favors most-the plus pattern'' That timely "should discovered'' If fit larger hole, squeeze smaller one. 29 major Circuits-whether includes "pattern''-is here. marketed "oxygen-limiting'' silos theirs, lack anyone argued Circuits' tests 30 believe questions subtle difficult. id., (claim pattern) Gardens, 1554 pattern); Cada, 451 (describing doctrines "equitable tolling'' estoppel''). force focused "injury'' principles equitable tolling, estoppel interact circumstances one, another, difference. To not, concurrence claims, advocate "mix-and-match'' theory. Rather, express necessarily answers. shall, very least, wait presents these, issues, providing opportunity full argument, attempt them. 31 review Doing record thousand pages determine validity independent conclusion lower reasonable factfinder contrary). highly fact-based, depending noticed silage matters effect failure consult herd performance records continuously sent, having done led tell veterinarians revealing story, representatives fully, sooner. 234. exceptional purely "where Respondent commit acts'' immediately Pet. Cert. i. answered II-A. go writ's reexamine rule-application now raise, decided favor. III 32 Our question, namely 33 "affirmative continuing coupled active cover equitably exercised diligence claim.'' Ibid. (emphasis added). 34 refers "equitably tolls'' see, 514, form estoppel,'' Wolin Barney 847, 852 Regardless, presented focuses plaintiff. Some takes steps'' sufficient (or "estop'' defense) irrespective known. Wolin, 852-853. benefit doctrine. Wood Carpenter, 101 135, 807 (1879); Bailey, Wall., 636; Geils Band Employee Benefit Plan Shearson, 1245, 1252-1255 1996) (diligence required fraudulent concealment law); Urland Merrell-Dow Pharmaceuticals, 822 1268, 1273-1274 (same §9.7.1, 56-57, 60-61, 64-66. 35 consideration context matter, assert reach often, supports requirement. Professor says, [t]he satisfied if shows neither nor, exercise due diligence, offense.'' ¶338, 152; I. Scher, Adviser §10.27, 10-62 (4th ed.1995). same, none says Conmar Mitsui 858 502 VSL 488 1010, 102 786 Texas Allan Constr. 851 1526, 1533 1988); Pinney Dock Transport Penn Central 838 1445, 1465 (C.A.6), Norfolk Western R. 880, 196, 166 (1988); New York Hendrickson Bros., 840 1065, 1083 (C.A.2), 128, Berkson Del Monte 53, 56 1984), 470 1056, 1765, 84 826 (1985); Charlotte Telecasters, Jefferson-Pilot 546 570, 574 1976). 36 seeks punish defendants affirmative, discrete concealment; behavior consequently irrelevant. 852; Robertson Seidman Seidman, 609 583, 593 1979); Urland, 1280-1281 (Becker, dissenting). Whether (which cases), either latter themselves being so, defendants. reason, consensus authority, embodies 37 brief merits, examine it. writ; __, 38 Affirmed. 39 whom THOMAS joins, judgment. 40 Twice Term received briefing heard oral accrues; rise summer recess, will remain unanswered. (1997), dismissed granted. today except timidity-declining correct is, merely rejecting candidates1 recover. leave reduced unresolved well-known prompted take effect, three remaining rules-the adopted; litigants guess follow; sure right-until, future date, receive third fourth finally summon courage "unravel,'' commentator put it, mess characterizes decisions,'' Abrams, Crime Legislation Public Interest: Lessons SMU L.Rev. 33, 70 (1996). 41 Worse still, gives regarding complex ("subtle difficult,'' ante, __) second try implicates my view gets wrong. cannot, leap impetuously applies, percentage'' "involve claims.'' Ante, __. erases, seems me, path back current forest confusion, proposition adopt place, finds plausible, preponderance inappropriate model. similarity close enough: "Although large majority complaints [fraud] offenses, insignificant number allege type professional crimes arson, bribery, theft political corruption.'' 149, 2763-2764, (1987) (rejecting state-law statutes limitations). Elsewhere today's opinion, curiously enough, quite willing RICO-even matter intimately connected namely, invocation part. On arguments context'' entirely persuasive. __-__. —(Apart illogical reliance, me resolved antecedent run.) relies heavily analysis 42 I consider, main (injury, discovery, act), "cause (1971) (referring, course, "an statute).— reasoned "RICO Act,'' 150, 2764, purpose, structure, aims schemes similar, 151-152, 2764-2765.2 Although expressly acknowledged "ha[d] occasion claim,'' 157, 2767-2768, profound figure be. "Presumably standards developed equally enforcement pp. 447-448 43 limitation understood fully suspend action.'' Johnson Railway Express Agency, 421 454, 463, 95 1716, 1722, 44 295 (1975). true, think, utterly meaningless specification event running. practical start start, tenth anniversary akin 14-year foolish, speak "adopting'' "patterning'' meant using recognized principle established practice (first departed DelCostello Teamsters, 2281, 476 (1983)) borrowing limitations. consistently [s]tate variety raised concerning overtones details Auto Workers Hoosier 383 [696,] 706 [86 1107, 1113-1114, 192] [(1966)] (characterization action); Cope Anderson, 331 [461,] 465-467 [67 1340, 1342-1343, 1602] [(1947)] (place arose); Oelrichs, 138 529, 414, 1037 (1891) (absence tolling circumstance).'' Johnson, 464, 1722. also, Chardon Fumero Soto, 650, 657, 662, 2611, 2616, 2619, 74 "In virtually chronological length interrelated revival, application. unravel defeat goals issue.'' Hardin Straub, 536, 539, 1998, 2000-2001, 582 (1989) (internal quotation marks citation omitted). conceivable analogous federal, state, 45 Both allurement vice approach statutes-of-limitation (the possibility entertains) broad judicial lawmaking. resisted today,3 past: [W]e portion comes policymaking intended avoid. '' Lampf, Pleva, Lipkind, Prupis Petigrow Gilbertson, 350, 362, 8, 2773, 2782, 321 words, wonder posed "subtle difficult''; policyworking endlessly demanding, constructing complicated adopting Finding whose provision relatively simple (for us, Malley-Duff); limiting adoption set forth provision, then selecting, precise etc. clothe limitations-naked ensemble policy perfection-well concede, task attacked once, undertaken piecemeal, decades, chosen today. prefer stand ruder, humbler, efficient predictable When whole, accoutrements. Perhaps (though am dubious) room exception state-borrowing practice, Hardin, rejection element "would issue,'' 2000. gobble extreme represented 46 Applying agree 1993. Since determined, relaxed include follows, fortiori, 47 entitled persuasively demonstrates, ""[t]he offense.''' __ 152 ed.1995)). therefore join opinion. foregoing reasons, concur read suggest possible rules-last discovery. __-__, alluded remedy economic recovery costs, bring bear pressure "private attorneys general' serious national problem public prosecutorial resources deemed inadequate; mechanism carrot aim "in of' violation.'' 2764. disclaims intent approach, references rule-which thought be) antithesis so-thereby going towards resolving rendering unnecessary.

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