Facts of the Case

Mark Rotella was admitted to a Brookhaven Psychiatric Pavilion in 1985 and discharged in 1986 after Brookhaven allegedly coerced him to stay longer than he intended. In 1994, the facility's parent company pleaded guilty to charges of fraud, conspiracy and violations of RICO, for giving physicians monetary incentives to needlessly admit, treat and retain patients at their hospitals. Rotella learned of the plea that same year, and in 1997 he filed a civil damages action under the Racketeer Influenced and Corrupt Organizations Act (RICO), claiming that the Brookhaven doctors and related business entities, had conspired to keep him hospitalized to maximize their profits. RICO makes it criminal "to conduct" an "enterprise's affairs through a pattern of racketeering activity." A "pattern" requires at least two acts of racketeering activity, the last of which occurred within 10 years after the commission of a prior act. Brookhaven countered that the statute of limitations under RICO had run on the charge. The District Court granted Brookhaven summary judgment on the ground that the 4-year limitation period for civil RICO claims had expired in 1990, four years after Rotella admitted discovering his injury. In affirming, the Court of Appeals rejected Rotella's argument that the limitations period does not begin to run until a plaintiff discovers (or should have discovered) both the injury and the pattern of racketeering activity.

Question

Does the four year statute of limitations on claims under the Racketeer Influenced and Corrupt Organizations Act begin to run before a claimant actually discovers that a defendant's racketeering activity caused the harm?

Conclusion

Yes. In a unanimous opinion delivered by Justice David H. Souter, the Court held that Rotella's action was not timely, because the start of the 4-year limitations period applicable to a civil RICO action was not governed by an "injury and pattern discovery" accrual rule under which such a civil claim would accrue only when the claimant discovered, or should have discovered, both an injury and a pattern of racketeering activity. In a footnote, Justice Souter noted that "[w]e do not...settle upon a final rule."