Dodging the Question: The Supreme Court's Refusal to Commit to a Universal Interpretation of the Accrual of the Statute of Limitations for Civil RICO

I. INTRODUCTION In 1970, the United States Congress passed the Racketeer Influenced and Corrupt Organization Act (RICO) as Title IX of the Organized Crime Control Act of 1970.1 This act became a popular tool for plaintiffs in private lawsuits in the 1980s.2 Although the text of RICO provides a detailed description of the elements of a RICO offense, it does not identify a statute of limitations.3 The Supreme Court determined that the Clayton Act's four year statute of limitations governs RICO claims.4 Although this ruling unified the length of the limitations period for a civil RICO claim, it was not helpful in determining when the statute of limitations began to run. Because of the Supreme Court's failure to answer this question, each of the circuit courts formulated and applied their own rules about when a IMAGE FORMULA4 civil RICO cause of action accrues. This resulted in three basic interpretations of the accrual rule for civil RICO claims: the last predicate act rule, the injury discovery rule, and the injury and pattern discovery rule.5 The Supreme Court's 1997 Klehr decision invalidated the last predicate act rule.6 However, Justice Scalia's concurrence suggested another alternative: the pure injury rule.7 In February of 2000, the Supreme Court took up the issue again and invalidated yet another rule: the injury and pattern discovery rule.8 Yet, the Court refused to announce one unified accrual rule for civil RICO. Circuit courts continue to apply any accrual rule that the Supreme Court has not explicitly rejected. However, there is a great need for uniform application of the accrual of civil RICO's statute of limitations, as the statute requires that the violating enterprise must be engaged in or affect interstate commerce.9 There is a possibility that the problem of forum shopping may arise, because of the interstate nature of the offense. An authoritative choice by the Supreme Court about civil RICO's accrual rule is desperately needed. Despite this urgency, the Court has declined to make an authoritative choice at each opportunity. Thus, it is the purpose of this Note to explore the reasoning behind the Court's decisions in Rotella and Klehr, to determine which accrual rule best serves the purpose of the RICO statute, and to make a clear recommendation to the Court. Part II will provide background on the RICO statute itself, as well as the various accrual rules that the circuit courts apply.10 Part III will analyze the Court's decision to dismiss two of the circuit courts' accrual rules, as well as critique the two remaining rules.11 Part IV will recommend an accrual rule that the Supreme Court has not dismissed and comports with the reasoning the Court has applied in its previous decisions.12 II. BACKGROUND In 1970, the United States Congress passed RICO, Title IX of the Organized Crime Control Act of 1970,13 to enhance sanctions and provide new remedies against the unlawful activities of those engaged in organized crime.14 RICO provides both civil and criminal penalties, although historically RICO was primarily a criminal sanction.15 Since the 1980s, RICO has become a popular cause of action for civil plaintiffs,16 in part because it awards plaintiffs with treble damages and attorneys' fees.17 IMAGE FORMULA7 In order to establish a prima facie civil RICO claim, a plaintiff must show that: (1) the defendant (2) through the commission of two or more acts (3) constituting a 'pattern' (4) of `racketeering activity' or through the collection of unlawful debt (5) directly or indirectly invests in, acquires or maintains an interest in, or conducts the affairs of (6) an 'enterprise,' (7) the activities of which affect interstate commerce. 18 The statute defines racketeering activity as the commission of various state and federal offenses listed in Sec 1961(1). …