Statute of Limitations

The most obscure aspects of the RICO Act relate to the statute of limitations applicable to civil RICO claims. Statutes of limitation are designed to impose an obligation of diligence on plaintiffs (i.e., if a person is wrongfully injured, they cannot sit on their rights indefinitely) and to enable some degree of predictability and conclusion for defendants (i.e., defendants must be able to assume that after a certain period they cannot be called upon to answer for wrongs they committed in the distant past).

Congress failed to include either a criminal or civil statute of limitations when it passed the RICO Act. Congress’ oversight was easily remedied with regard to the criminal statute of limitations. Title 18, section 3282 of the U.S. Code is the “catch-all” statute of limitation for federal crimes. It states that “no person shall be prosecuted . . . unless the indictment is found or the information is instituted within five years next after such offense shall have been committed.” With regard to criminal prosecutions, it is generally held that a prosecution is timely so long as the defendant has committed one predicate act (that forms part of the pattern for which he is being prosecuted) within five years or less of the indictment. See United States v. Darden, 70 F.3d 1507, 1525 (8th Cir. 1995).

RICO’s missing statute of limitations was more problematic with regard to civil claims. First, there is no “catch-all” limitations period applicable to civil claims established by Congress. Second, assuming civil RICO claims are subject to a statute of limitations, when does the statute of limitations begin to run? Does it run with the first predicate act or the last predicate act? Does it re-start with each new predicate act committed by the defendant? Does it run when the plaintiff is injured? What if the plaintiff is unaware of its injury? Is the running of the statute of limitations then postponed until after the plaintiff discovered its injury? Until the United States Supreme Court provided direction, all of these questions presented tremendous problems for the courts confronting statute of limitations defenses under the RICO Act.

Although the statute of limitations is an affirmative defense, the defense may be asserted as a basis for dismissal under Rule 12(b)(6) if the time alleged in the complaint shows that the cause of action has not been brought within the statute of limitations. LABMD Inc. v. Boback, 47 F.4th 164, 179 n.9 (3d Cir. 2022). If the bar is not apparent on the face of the complaint, then it may not afford the basis for a dismissal of the complaint under Rule 12(b)(6). Id.

Return to Nutshell Table of Contents