Court Opinion

ID: 8941364
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:00:13.643882+00
Date Added: 2024-06-11T17:09:44.958831
License: Public Domain

SLOYITER, Circuit Judge,
concurring in the judgment.
I.
The difficulty in divining state law, one of the most unproductive byproducts of diversity jurisdiction, once again divides this court, this time in the context of application of a federal statute. Much of the needless expenditure of judicial and attorney time and effort on this issue could easily be avoided were Congress to specify a statute of limitations at the same time as it enacts a statute that explicitly provides for private suit. Nonetheless, although aware of the difficulty the courts experience in categorizing new federal statutory actions under state statutes of limitations enacted for different purposes, Congress enacted RICO in 1970 with a provision for private actions, 18 U.S.C. § 1964(c), but without a statute of limitations.
As the ABA Task Force Report stated: the law regarding the applicable statute of limitations for Civil RICO claims is confused, inconsistent, and unpredictable. The current approach is virtually guaranteed to incite complex and expensive litigation over what should be a straightforward matter. In addition to disputes over the proper characterization of the RICO claim, which indeed may vary depending on whether it is governed by federal or state law, the current approach raises the possibility of further conflicts over the appropriate choice of law in multistate factual situations.
ABA Section of Corporation, Banking and Business Law; Report of the Ad Hoc Civil RICO Task Force 391-92 (1985) [hereafter cited as ABA Task Force Report]. The ABA Task Force Report recommended that Congress amend RICO to provide an express statute of limitations. Id. at 393. A court cannot parry the issue as deftly.
II.
Many of the same pragmatic considerations referred to by the Court in Wilson v. Garcia, — U.S. —, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), lead me to agree with the majority, as set forth in its opinion in Malley-Duff & Associates, Inc. v. Crown Life Insurance Co., 792 F.2d 341, being filed contemporaneously herewith, that a uniform statute of limitations should be selected in RICO cases. Although the Sixth Circuit has recently opted for an approach that selects the applicable limitations in the individual case on the basis of a characterization of the kind of factual circumstances and legal theories presented, Silverberg v. Thomson McKinnon Securities, 787 F.2d 1079 (6th Cir.1986), I find that approach inconsistent with the principles of Wilson v. Garcia.
An ad hoc approach would create “uncertainty and time-consuming litigation.” Wilson v. Garcia, 105 S.Ct. at 1945. RICO is similar to § 1983 in that both “encompass numerous and diverse topics and subtopics.” Id. at 1946. Many civil RICO actions have alleged wire and mail fraud as predicate acts, but 18 U.S.C. § 1961 defines “racketeering activity” to include nine state law felonies and violations of over 25 federal statutes, including those prohibiting bribery, counterfeiting, embezzlement of pension funds, gambling offenses, obstruction of justice, interstate transportation of stolen property, and labor crimes. RICO presents the same danger identified in Wilson v. Garcia that two or more limitations periods could apply to one claim, and thus the same uncertainty would arise as to the period applicable to any given *338action. In these circumstances, I agree with my colleagues that we should be guided by the decision in Wilson v. Garcia and adopt one period of limitations for RICO actions.
I cannot agree, however, with the approach taken by the majority in deciding where to look for that limitations period, which it sets forth in the opinion in MalleyDuff and incorporates here. The choice open to us is whether to follow Wilson v. Garcia in seeking the most nearly applicable state statute of limitations or to follow the approach used in DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), in looking to the most nearly analogous federal statute of limitations.
I recognize that there are some good reasons to support the decision reached by the majority to follow Wilson v. Garcia and look to state law. In the first place, it has been the traditional practice of the federal courts to look to state statutes of limitations for federal causes of action unless Congress specifically provided otherwise. See United Automobile Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 703-04, 86 S.Ct. 1107, 1112, 16 L.Ed.2d 192 (1966). Even in DelCostello, where the Court chose a federal statute, it stated that “resort to state law remains the norm for borrowing of limitations periods,” 462 U.S. at 171,103 S.Ct. at 2294, and “absent some sound reason to do otherwise, Congress would likely intend that the courts follow their previous practice of borrowing state provisions.” Id. at 158-59 n. 12, 103 S.Ct. at 2287 n. 12. In the second place, Wilson v. Garcia itself held that a state limitations period should be selected. Finally, the lower federal courts have been almost, if not entirely, uniform in applying a state statute of limitations in RICO cases. See, e.g., Compton v. Ide, 732 F.2d 1429, 1433 (9th Cir.1984); Alexander v. Perkin Elmer Corp., 729 F.2d 576, 577-78 (8th Cir.1984).
On the other hand, responding to these arguments in reverse order, the fact that other courts have chosen a state statute of limitations, while significant, does not absolve us of our independent responsibility to look anew at the issue when it comes before this court for the first time. The other federal courts considering this issue have not generally analyzed the decision in terms of applying state rather than federal law but have instead focused on which state statute of limitations to apply. In fact, the Court in DelCostello selected federal law notwithstanding its earlier opinion in United Parcel Service, Inc. v. Mitchell, 451 U.S. 56 (1981), which had decided that a suit by an employee alleging employer breach of the collective bargaining agreement and union breach of a duty of fair representation was governed by a state statute of limitations for vacation of an arbitration award. The DelCostello Court explained that in Mitchell, it had “limited [its] consideration to a choice between two state statutes of limitations; [it] did not address the contention that [it] should instead borrow a federal statute of limitations.” 462 U.S. at 154, 103 S.Ct. at 2285 (emphasis in original). When considering the latter issue in DelCostello, it felt free to rule that it was the federal statute that was applicable. For the same reason, the decisions by other federal courts in applying various state statutes of limitations are not persuasive authority governing the more fundamental decision of whether any state statute, rather than a federal one, should be used.
Second, some of the considerations referred to by the Court in Wilson v. Garcia to support its choice of a state statute of limitations for § 1983 actions are not as applicable to RICO. In Wilson, the Court was able to select one generic label, the tort action for the recovery of damages for personal injuries, for § 1983 suits. It did so because “[t]he atrocities that concerned Congress in 1871 plainly sounded in tort.” 105 S.Ct. at 1948. Also, state statutes of limitations framed for purposes of state tort law or which have been so construed by the state courts provide universally available analogies based on neutral state policies. See id. at 1949. Such a readily available state law analogy is not presented for RICO.
As the majority opinion in Malley-Duff demonstrates, there really is no closely *339analogous statute of limitations to RICO under state law. The majority rejects applying fraud, although that is the state limitations period most frequently applied, see, e.g., Alexander v. Perkin Elmer Corp., 729 F.2d 576, 577-78 (8th Cir.1984); Umstead v. Durham Hosiery Mills, Inc., 578 F.Supp. 342, 348 (M.D.N.C.1984), rejects civil penalty or forfeiture, rejects the general state statute for personal and property injury, and alights on the “catch all” limitations period which covers all actions for which the state has not otherwise provided. I find this unsatisfactory. The Pennsylvania courts have not found many occasions to use the “catch all” for statutory actions since the statute of limitations scheme was revised in 1978, see, e.g., Webster v. Great American Insurance Co., 544 F.Supp. 609 (E.D.Pa.1982) (Pennsylvania Human Relations Act), and the statutes to which the “catch all” would be applicable do not necessarily have any correspondence to the types of claims encompassed by RICO. See id.
In Wilson v. Garcia, the Court rejected application of a “catch all” statute because it was unlikely that Congress would have intended it to apply. See 105 S.Ct. at 1948. There is no reason to believe that Congress would have had any different intent with respect to RICO, particularly in light of the wide disparity of claims that the “catch all” encompasses.
The majority suggests that the ABA Task Force Report approves of its selection of the “catch all” limitations for RICO. Although the ABA Task Force stated that if a state limitations is applied, it would be better to apply one for statutory causes of action than for one based on the predicate offenses alleged as part of a RICO claim, it believed that there were serious difficulties even with the former approach. That is evident from the remainder of the paragraph omitted from the majority’s quotation. See Malley-Duff, 792 F.2d at 352-53. Referring to the state “catch all” for statutory actions, the ABA Task Force Report stated:
But not all states have a general statute of limitations for statutory causes of action. Although most have a limitations period for actions in the nature of a penalty or forfeiture, the courts have rightly concluded that the treble damage RICO claim, like the treble damage antitrust claim, is not primarily penal in nature. Thus, in many situations, there may be no alternative but to look to the statute of limitations applicable to state claims most like the underlying predicate offenses.
ABA Task Force Report at 391 (footnotes omitted).
The absence of an available “catch all” in all states distinguishes the RICO choice from the § 1983 choice made in Wilson v. Garcia. There the Court stated:
The characterization of all § 1983 actions as involving claims for personal injuries minimizes the risk that the choice of a state statute of limitations would not fairly serve the federal interests vindicated by § 1983.
105 S.Ct. at 1949. I believe that a similar statement could not be made with confidence about RICO and state statutory “catch alls”. Moreover, I cannot reconcile the majority’s position “that civil RICO is truly sui generis and that particular claims cannot be readily analogized to causes of action known at common law,” Malley-Duff, 792 F.2d at 352, with its position that a statute other than a “catch all” may be used in other states within this circuit. Id. at 349 n. 16.
The primary position of the Task Force was that RICO’s objectives would be best served by applying a uniform federal statute of limitations to civil RICO cases. ABA Task Force Report at 392-93. The Task Force Report recognized that such uniformity could be achieved through application to RICO of the DelCostello approach, but was uncertain whether RICO presented a “special exception” and whether the courts would be inclined to proceed in this manner since they have not been so inclined heretofore. Id. at 392.
DelCostello did not refer to any “special exception” although, as I noted earlier, it recognized that the norm was to borrow state statutes of limitations. The court pointed out that “when a rule from else*340where in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking, we have not hesitated to turn away from state law.” DelCostello, 462 U.S. at 172, 103 S.Ct. at 2294. I believe that “federal law clearly provides a closer analogy than available state statutes” for civil RICO claims.
There are abundant illustrations both in the Supreme Court and in this court to support turning to federal rather than state statutes. Many of them are referred to in DelCostello itself. Thus, in McAllister v. Magnolia Petroleum Co., 357 U.S. 221, 78 S.Ct. 1201, 2 L.Ed.2d 1272 (1958), a federal limitations period was applied to a seaworthiness action under general admiralty law rather than the state statute governing personal injury suits. The Court eschewed applying state statutes of limitations to actions to enforce a federally created equity right in Holmberg v. Armbreckt, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946). More recently, in Occidental Life Insurance Co. v. EEOC, 432 U.S. 355, 97 S.Ct. 2447, 53 L.Ed.2d 402 (1977), the Court rejected application of any state statute of limitations to EEOC enforcement actions. It stated that “the Court has not mechanically applied a state statute of limitations simply because a limitations period is absent from the federal statute.” Id. at 367, 97 S.Ct. at 2455. It pointed out that “[sjtate legislatures do not devise their limitations periods with national interests in mind,” and reiterated that “ ‘[although state law is our primary guide in this area, it is not, to be sure, our exclusive guide.’ ” Id. (quoting Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 465, 95 S.Ct. 1716, 1722, 44 L.Ed.2d 295 (1975)). This court has applied DelCostello in three recent cases. See Taylor v. Ford Motor Co., 761 F.2d 931 (3d Cir.1985) (applying the six month rule of § 10(b) of the NLRA to suits to enforce an arbitrator’s decision), cert. denied, — U.S. -, 106 S.Ct. 849, 88 L.Ed.2d 890 (1986); Local Union 1397, United Steelworkers v. United Steelworkers, 748 F.2d 180 (3d Cir.1984) (applying the § 10(b) limitation to suits brought under § 102 of the LMRDA); Sisco v. Consolidated Rail Corp., 732 F.2d 1188 (3d Cir. 1984) (applying § 10(b) of the NLRA to duty of fair representation claims under the Railway Labor Act).
One of the reasons for rejecting state limitations is if their application would be inconsistent with the underlying policies of the federal statute. That was the reason given in DelCostello because typically short state limitations periods for vacating arbitration awards failed to provide the aggrieved employee with a satisfactory opportunity to vindicate his or her rights. See DelCostello, 462 U.S. at 166, 103 S.Ct. at 2291. Although Pennsylvania’s “catch all” of six years would not suffer from this defect, it is unclear whether other states might have a short “catch all” which would be inconsistent with federal policy to utilize civil RICO statutes as an additional enforcement tool. Furthermore, the majority fails to address what would be the appropriate statute of limitations for those states that have no “catch all” for statutory actions.
An advantage of turning to a federal statute of limitations is that there is one readily available that appears to be uniquely appropriate. Civil RICO can be characterized as a congressionally provided remedy for repeated criminal behavior that results in economic injury. The civil remedy provided in the Clayton Act has a similar purpose. The analogy between the two is strong. Both section 4 of the Clayton Act, 15 U.S.C. § 15, and the civil enforcement provision of RICO, 18 U.S.C. § 1964(c), provide for the recovery of three-fold damages and the cost of suit, including a reasonable attorney’s fee. Both require the plaintiff to prove an injury “in his business or property by reason of” a violation. Moreover, Congress explicitly used the Clayton Act as the model for the civil provisions of RICO, as the Supreme Court recognized in Sedima, S.P.R.L. v. Imrex Co., — U.S.-, 105 S.Ct. 3275, 3280-81, 3282 n. 8, 87 L.Ed.2d 346 (1985).
Finally, when considering the statute of limitations that should be applied to a new and important federal statutory cause of *341action, it is more satisfying intellectually to apply one to which Congress has given its specific attention, as it did when it amended the Clayton Act to provide a four year statute of limitations, see 15 U.S.C. § 15b, than to apply one to which the state legislatures have given no specific attention and which they swept up instead in a “catch all.”
III.
Even if this court were to opt for applying a state statute of limitations to civil RICO claims, I believe that at least for claims accruing after 1983 when Pennsylvania again changed its statute of limitations scheme, the appropriate statute to apply is the two year limitations period for actions seeking redress for most tortious behavior. See 42 Pa.Cons.Stat.Ann. § 5524 (1981 & Supp.1985). That amendment, enacted in 1982, specifies that the two year limitation period applies to the following:
Any action or proceeding to recover damages for injury to persons or property which is founded on negligent, intentional or otherwise tortious conduct or any other action or proceeding sounding in trespass, including deceit or fraud, except an action or proceeding subject to another limitation specified in this sub-chapter.
Id. § 5524(7). Thus, Pennsylvania now has a consolidated statute of limitations which encompasses all tortious and fraudulent injuries to persons or properties.
Because civil RICO requires an injury to “business or property” brought about by intentional criminal conduct, this statute provides a limitation period for analogous causes of action. While I recognize the difficulty the majority faces in finding an analogous statute for the interim period between the 1976 and 1982 amendments at issue here, I see no reason why it does not acknowledge the RICO analogy to section 5524 for claims accruing after 1983.
IV.
In deciding that fraud was covered by a six year period of limitations in Pennsylvania during the interim period between the Pennsylvania legislature’s actions in 1976 and 1982, the majority acknowledges there is no governing Pennsylvania interpretation. Although there are good arguments on both sides of that issue, and my inclination might be contrary to that of the majority, I am not sufficiently secure in the correctness of the two year approach for state fraud cases to dissent on this issue. I believe that clarification, if any, should come from the Pennsylvania courts.
V.
My analysis has led me to conclude that plaintiffs’ civil RICO claims should be measured by the four year statute of limitations applicable to Clayton Act claims. Since plaintiffs’ claims clearly accrued within four years of the date on which they filed their complaint, I agree with the majority in its ultimate decision that the judgment of the district court should be reversed and the matter should be remanded for further proceedings.