Time-bars: RICO-criminal and civil-federal and state.
TABLE OF CONTENTS INTRODUCTION I. RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT (RICO) A. Enactment of RICO B. Organized Crime Myth C. Criminal and Civil Proceedings D. Liberal Construction E. Criminal Enforcement F. Civil Enforcement G. Key Elements of RICO II. STATUTES OF LIMITATIONS IN CRIMINAL RICO CASES A. History and Justifications B. Determining the Limitations Period for Criminal RICO 1. Federal RICO 2. State RICO C. Determining the Point of Accrual 1. Accrual and Commencement of Prosecution in Criminal Cases 2. Accrual Problems in Criminal RICO Cases a. Pattern Violations b. Use/Investment Violations and Acquisition/ Maintenance Violations c. Conspiracy D. Tolling of Criminal Statutes of Limitations 1. Federal Tolling Rules 2. State Tolling Rules III. STATUTES OF LIMITATIONS IN CIVIL RICO CASES A. History and Justifications B. Determining the Limitations Period for Civil RICO 1. Federal RICO a. Before Agency Holding Corp. v. Malley-Duff & Associates, Inc. b. Agency Holding Corp. v. Malley-Duff & Associates, Inc. 2. State RICO a. When an Express Limitations Period Exists b. When an Express Limitations Period Does Not Exist i. Borrowing the Federal Period ii. Borrowing the State Antitrust Period iii. Borrowing the Limitations Period Based on the Alleged Predicate Offenses iv. Borrowing the Limitations Period for Penalties and Forfeitures v. Borrowing the Limitations Period for Liability on a Statute C. Determining the Point of Accrual 1. The Last Predicate Act Rule and Klehr v. A. O. Smith Corp 2. The Clayton Act Rule 3. The Injury and Pattern Discovery Rule and Rotella v. Wood 4. Discovery Rule D. Tolling of Civil Statutes of Limitations 1. Tolling 2. Laches E. Case Study: Time-bars in Florida Under RICO CONCLUSION
"There is an appointed time for everything." (1)
"Ripeness is all." (2)
"Statutes of limitations always have vexed the philosophical mind for it is difficult to fit them into a completely logical and symmetrical system of law.... [They] find their justification in necessity and convenience rather than in logic." (3)
Most people can easily enough grasp the basic idea behind timebars. (4) The enterprise (5) of law has as its purpose "justice," (6) whether criminal (7) or civil. (8) This much is beyond serious dispute. At first glance, a time-bar merely involves two points in time: the time of the event, and the time of the initiation of the legal proceedings looking into the event. Obviously, as these two points in time separate more, the ability of any legal body accurately to resolve disputes about the facts making up the event--a necessary precondition to giving each person his or her due--becomes more problematic. Testimony, or the introduction of other evidence, is the basis for fact-finding in court. Yet, over time, memories fade. Participants and other relevant persons die or become unavailable. Documents are mislaid, lost, or stolen. Physical evidence deteriorates. Ultimately, "Justice" between two parties requires truth in fact-finding. At some point, the passage of time itself defeats "Justice." This much, too, is beyond serious dispute. Then the lawyers get involved in the bedeviling details. (9) How do you fix the metric of this far and no farther? When do you start the period? When do you stop the period? Should the law toll the period based on the conduct of the complainant or the respondent? Do these time-bars affect the right or only the remedy, whatever that hoary, Roman distinction means?
The law does not easily answer these questions. The interests (10) involved are complex, and they are at least triangular: the complaining party, the responding party, and society itself, represented by the legal body that must resolve the dispute. The interests of the parties, too, may differ in criminal and civil proceedings. Should they differ if one of them is the representative of the sovereign? The questions proliferate and perplex the legal mind. Whatever commentators or courts say of time-bars, (11) the narrow loci of these materials are on the concrete answers given and rationales proffered to these pressing questions for criminal and civil RICO in federal and state proceedings, which necessarily require a consideration of the scope of RICO itself, as time-bars receive significant color and shape from their particular legal context. (12)
I. RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT (RICO)
A. Enactment of RICO
In 1970, Congress enacted the Organized Crime Control Act; Tire IX of the 1970 Act is the Racketeer Influenced and Corrupt Organizations Act ("RICO"). (13) Congress drafted Tide IX to deal with "enterprise criminality," (14) that is, "patterns" of--
(1) violence (e.g., murder, robbery, etc.),
(2) the provision of illegal goods and services (e.g., drugs, gambling, prostitution, etc., including undocumented aliens),
(3) corruption in labor or management relations (e.g., bribery, extortion, embezzlement, etc.),
(4) corruption in government (e.g., bribery, extortion, fraud against the government, etc.), and
(5) commercial and other forms of fraud (schemes to defraud, bankruptcy fraud, securities fraud, etc.) by, through, or against various types of licit or illicit enterprises. (15)
Because Congress found that the sanctions and remedies available to control these offenses were unnecessarily limited in scope and impact, it enacted RICO to provide enhanced criminal and civil sanctions, including fines, imprisonment, forfeiture, injunctions, and treble damage relief for persons injured in their business or property because of a violation of the statute. (16)
B. Organized Crime Myth
Its legislative history "demonstrates that the RICO statute was intended to provide new weapons of unprecedented scope for an assault upon organized crime and its economic roots." (17) The major purpose of RICO was to address the "infiltration of legitimate business by organized crime," but Congress designed the statute to reach both illegitimate and legitimate enterprises. (18) Similar to the antitrust statutes, on which Congress modeled RICO, Congress used in RICO "a generality and adaptability [of language] comparable to that found to be desirable in constitutional provisions." (19) "[C]oncepts such as RICO 'enterprise' and 'pattern of racketeering activity' were simply unknown to common law." (20) Significantly, "Congress drafted RICO broadly enough to encompass a wide range of criminal activity, taking many different forms and likely to attract a broad array of perpetrators operating in many different ways." (21) "The occasion for Congress'[s] action was the perceived need to combat organized crime. But Congress for cogent reasons chose to enact a more general statute, one which, although it had organized crime as its focus, was not limited in its application to organized crime." (22) As the Supreme Court observed, the contention that RICO is limited to "organized crime.... finds no support in the Act's text, and is at odds with the tenor of its legislative history." (23) Nevertheless, RICO is similar to other legislation enacted by Congress as general reform, aimed at a specific target, but not limited to a specific target. (24)
C. Criminal and Civil Proceedings
RICO's two-track system of criminal and civil litigation that Congress designed to achieve its remedial purposes fits well into the federal system of justice. (25) RICO's criminal and civil provisions are as follows:
(1) [section] 1961 of Title 18 sets out RICO's building-block "definitions." They apply in all actions under RICO.
(2) [section] 1962 of Title 18 sets out RICO's "standards" of "unlawful" (not "criminal") "conduct." (26) They apply in all actions under RICO.
(3) [section] 1963 of Title 18 sets out RICO's criminal sanctions for a violation of [section] 1962.
RICO's criminal sanctions under [section] 1963 require:
* A criminal trial;
* Instituted by the government;
* Through a grand jury indictment; and
* The testing of the government's proof by the standard of "beyond a reasonable doubt." (27)
(4) [section]1964 of Title 18 sets out RICO's civil sanctions for a violation of [section] 1962.
RICO's civil remedies under [section] 1964 require:
* A civil trial;
* Either by the government or a private plaintiff; and
* The testing of either the government's or a private party's proof by the standard of "preponderance of the evidence." (28)
D. Liberal Construction
Congress directed that courts liberally construe RICO to achieve its remedial purposes. (29) If RICO's language is plain, it controls. (30) If its language, syntax, or context is ambiguous, courts must give it that construction that would realize its remedial purpose of providing "enhanced sanction and new remedies." (31) Courts must read its language in the same fashion, whatever the character of the suit. (32) The Supreme Court follows this outline. (33)
E. Criminal Enforcement
The criminal enforcement mechanism of RICO provides for imprisonment, fines, and criminal forfeiture. (34) RICO authorized imprisonment of up to twenty years, or life, where the predicate offense authorizes life. (35) In conjunction with other sections of United States Code, Title 18, RICO authorizes fines for RICO violations of up to $250,000 if an individual is convicted, (36) or, alternatively, twice the gain or loss. (37) Further, sentencing courts can order defendants to pay restitution to victims of an offense. (38)
F. Civil Enforcement
The civil enforcement mechanism of RICO provides sanctions of injunctions, treble damages, costs, and attorney fees. (39) The government and private parties may bring civil suits. Private suits "provide a significant supplement to the limited resources available to the Department of Justice" to enforce the law. (40)
As in RICO's model in the antitrust laws, (41) RICO creates "a private enforcement mechanism that ... deter[s] violators and deprive [s] them of [their illicit proceeds], and.., provide [s] ample compensation to the victims...." (42) In fact, RICO and the antitrust statutes are well integrated. The antitrust statutes protect against collusion; RICO protects against violence and fraud in the market. Together, they seek a free market characterized by integrity and freedom. (43)
G. Key Elements of RICO
Restated in plain English--with Supreme Court commentary in the footnotes--RICO's substantive elements provide:
(a) a "person" (44) who has received income from a "pattern of racketeering activity" (45) cannot invest that income in an "enterprise," (46)
(b) a "person" cannot get or keep control of an "enterprise" by a "pattern of racketeering;"
(c) a "person" (47) who is employed by or associated with an "enterprise" cannot "conduct" (48) the affairs of the "enterprise" through a "pattern of racketeering;" and
(d) a "person" cannot "conspire" to violate RICO. (49)
This "outline is deceptively simple, however, [because] each concept is a term of art which carries its own inherent requirements of particularity." (50)
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|Title Annotation:||Introduction through I. Racketeer Influenced and Corrupt Organizations Act (RICO), p. 1581-1615|
|Author:||Blakey, G. Robert|
|Publication:||Notre Dame Law Review|
|Date:||Apr 1, 2013|
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