Lexplug logoLexplug

Agency Holding Corp. et al. v. Malley-Duff & Associates, Inc.

Supreme Court of United States
483 U.S. 143 (1987)
ELI5:

Rule of Law:

Civil claims brought under the Racketeer Influenced and Corrupt Organizations Act (RICO) are subject to a uniform, four-year statute of limitations borrowed from the Clayton Antitrust Act.


Facts:

  • Malley-Duff & Associates, Inc. (Malley-Duff) served as an insurance agent for Crown Life Insurance Company (Crown Life) in the Pittsburgh area.
  • Malley-Duff alleged that Crown Life, Agency Holding Corporation, and several Crown Life employees formed an enterprise to fraudulently acquire lucrative Crown Life agencies.
  • According to the allegations, this enterprise imposed an impossibly high production quota on Malley-Duff nine months into the 1977 fiscal year.
  • When Malley-Duff failed to meet this quota, Crown Life terminated its agency on February 13, 1978.
  • Malley-Duff further alleged that the petitioners used similar fraudulent schemes to acquire other Crown Life agencies in different cities.
  • Additionally, Malley-Duff alleged that the petitioners obstructed justice during the discovery phase of a separate, preceding lawsuit.

Procedural Posture:

  • Malley-Duff sued Crown Life and Agency Holding Corp. in the United States District Court for the Western District of Pennsylvania, alleging a civil RICO violation.
  • The defendants filed a motion for summary judgment, arguing the claim was time-barred.
  • The District Court granted the defendants' motion, applying Pennsylvania's two-year statute of limitations for fraud and dismissing the RICO claim.
  • Malley-Duff, as appellant, appealed to the United States Court of Appeals for the Third Circuit.
  • The Court of Appeals reversed the District Court's decision, holding that Pennsylvania's six-year 'catchall' residual statute of limitations applied to all RICO claims arising in the state, making Malley-Duff's suit timely.
  • Crown Life and Agency Holding Corp., as petitioners, sought and were granted a writ of certiorari from the U.S. Supreme Court to resolve the conflict among federal circuits regarding the proper limitations period for civil RICO actions.

Locked

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

In the absence of an express limitations period in the Racketeer Influenced and Corrupt Organizations Act (RICO), should federal courts apply a uniform statute of limitations borrowed from another federal statute, such as the Clayton Act, or should they borrow the most analogous state statute of limitations?


Opinions:

Majority - Justice O’Connor

Yes, federal courts should apply a uniform statute of limitations borrowed from the Clayton Act. The nature of civil RICO claims requires a single, federal limitations period, and the Clayton Act's 4-year statute of limitations is the most appropriate choice. RICO encompasses a wide variety of predicate acts, making it difficult to find a single, appropriate state-law analogue and leading to uncertainty and time-consuming litigation. A uniform federal rule is necessary, and the Clayton Act provides the closest analogy because Congress clearly patterned RICO's civil enforcement provision—including its treble damages and attorney's fees remedy for economic injury—after the Clayton Act. State 'catchall' statutes are unsuitable, and the multistate nature of many RICO violations creates a risk of forum shopping, further supporting the need for a uniform federal standard.


Concurring - Justice Scalia

Yes, but for different reasons. While I agree that no state statute of limitations is appropriate for civil RICO claims, the Court's decision to 'borrow' a limitations period from another federal statute is an illegitimate exercise of legislative judgment. Historically, federal courts applied state statutes of limitation because they applied of their own force, not because of an implied congressional intent to 'borrow.' To depart from this longstanding practice and invent a rule allowing courts to select a federal statute is a 'giant leap into the realm of legislative judgments.' The proper conclusion when no state statute is appropriate is that Congress intended no limitations period to apply, which would in turn prompt Congress to legislate a specific period if it deemed one necessary.



Analysis:

This decision establishes a definitive, uniform statute of limitations for all civil RICO claims, resolving a significant circuit split and providing certainty for litigants nationwide. By borrowing from the Clayton Act, the Court solidified the jurisprudential link between antitrust and RICO law, influencing future interpretations of RICO's scope and purpose. The ruling significantly curtails preliminary litigation over which state's limitations period applies, thus streamlining RICO cases and preventing forum shopping. More broadly, it reinforces the principle established in DelCostello that courts may borrow from federal, rather than state, law when a federal statutory scheme is so unique that state law offers no suitable analogue and federal interests require uniformity.

🤖 Gunnerbot:
Query Agency Holding Corp. et al. v. Malley-Duff & Associates, Inc. (1987) directly. You can ask questions about any aspect of the case. If it's in the case, Gunnerbot will know.
Locked
Subscribe to Lexplug to chat with the Gunnerbot about this case.

Unlock the full brief for Agency Holding Corp. et al. v. Malley-Duff & Associates, Inc.