Rotella v. Wood, 528 U.S. 549 (2000)

Page:   Index   1  2  3  4  5  6  7  8  9  10  11  12  13  Next

OCTOBER TERM, 1999

Syllabus

ROTELLA v. WOOD et al.

certiorari to the united states court of appeals for the fifth circuit

No. 98-896. Argued November 3, 1999—Decided February 23, 2000

Petitioner Rotella was admitted to a private psychiatric facility in 1985 and discharged in 1986. In 1994, the facility's parent company and one of its directors pleaded guilty to criminal fraud related to improper relationships and illegal agreements between the company and its doctors. Rotella learned of the plea that same year, and in 1997 he filed a civil damages action under the Racketeer Influenced and Corrupt Organizations Act (RICO), claiming that respondents, doctors and related business entities, had conspired to keep him hospitalized to maximize their profits. RICO makes it criminal "to conduct" an "enterprise's affairs through a pattern of racketeering activity," 18 U. S. C. § 1962(c). A "pattern" requires at least two acts of racketeering activity, the last of which occurred within 10 years after the commission of a prior act. § 1961(5). A person injured by a RICO violation may bring a civil RICO action. § 1964(c). The District Court granted respondents summary judgment on the ground that the 4-year limitations period for civil RICO claims, see Agency Holding Corp. v. Malley-Duff & Associates, Inc., 483 U. S. 143, 156, had expired in 1990, four years after Rotella admitted discovering his injury. In affirming, the Fifth Circuit rejected Rotella's argument that the limitations period does not begin to run until a plaintiff discovers (or should have discovered) both the injury and the pattern of racketeering activity.

Held: The "injury and pattern discovery" rule invoked by Rotella does not govern the start of the limitations period for civil RICO claims. Pp. 553-561.

(a) In Malley-Duff, this Court based its choice of a uniform 4-year statute of limitations period for civil RICO on a Clayton Act analogy, but did not decide when the period began to run. In Malley-Duff's wake, some Circuits, like the Fifth, applied an injury discovery accrual rule starting the clock when a plaintiff knew or should have known of his injury, while others applied the injury and pattern discovery rule that Rotella seeks. This Court has rejected the Third Circuit's "last predicate act" rule, Klehr v. A. O. Smith Corp., 521 U. S. 179, and now eliminates another possibility. Pp. 553-554.

(b) The injury and pattern discovery rule is unsound for a number of reasons. It would extend the potential limitations period for most civil

549

Page:   Index   1  2  3  4  5  6  7  8  9  10  11  12  13  Next

Last modified: October 4, 2007