Klehr v. A. O. Smith Corporation (1996)
- Docket
- 96-663
- Decided
- 1996-01-01
Summary
Question: 1)Does the time limit for filing a civil claim under the Racketeer Influenced and Corrupt Organizations Act of 1970 (RICO) begin after the plaintiff discovers the last illegal act ("last predicate act") at the end of a pattern of racketeering activity? 2)If the plaintiff demonstrates "fraudulent concealment" of the injury inflicted, can RICO's civil-claim limitations period be extended? Conclusion: No and No. Justice Stephen Breyer wrote the opinion for a unanimous Court. The "last predicate rule...lengthens the limitations period dramatically" and thereby contradicts Congress's intention of ensuring a time limit for civil RICO claims. Also, "the plaintiff cannot use an independent, new act as a bootstrap to recover for injuries caused by other predicate acts that took place outside the limitations period." RICO intends "not only to compensate victims but also to encourage those victims diligently to investigate and thereby to uncover unlawful activity." To demonstrate "fraudulent concealment", a plaintiff must have failed to discover injuries inflicted upon him after acting with "reasonable diligence" to discover the source and pattern of the injuries.