RICO — Fourth Circuit Indicates Acceptance of, While Reserving on, Separate Accrual Test — Look-Back Beyond 4 Years for Predicate Acts to Show Pattern Doesn’t Mean Damages Are Awardable for Out-of-Time Acts

From CSX Transportation, Inc. v. Gilkison, 406 F. App'x 723 (4th Cir. 2010):

CSX Transportation, Incorporated ("CSX") filed a complaint against Robert V. Gilkison ("Gilkison"), Peirce, Raimond & Coulter, P.C. ("Peirce firm"), Robert N. Peirce, Jr. ("Peirce"), Louis A. Raimond ("Raimond"), Mark T. Coulter ("Coulter"), and Ray Harron, M.D. ("Harron"), alleging violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq., common law fraud, and civil conspiracy, all "aris[ing] from the successful efforts of the defendants to deliberately fabricate and prosecute objectively unreasonable, false and fraudulent asbestosis claims against CSX." (J.A. 143). ***

CSX argues that this Court should adopt the so-called "separate accrual rule" for RICO statute of limitations purposes, under which "a cause of action accrues when new predicate acts occur within the limitations period, even if other acts were committed outside the limitations period." (Appellant's Br. 19) (quotations and alterations omitted). ***

Footnote 3. Because we find that the district court erred by dismissing the RICO counts for the reasons just described [fact questions as to when the plaintiff was or should have been on notice of the fraud], we do not address CSX's argument regarding the separate accrual rule for RICO statute of limitations purposes.

As a separate matter, since the issue may arise on remand, we do note our concern regarding the district court's apparent alternate holding that, "[b]ecause only one alleged act of racketeering activity is not time-barred, CSX has failed to show the requisite pattern to sustain its RICO claims." (J.A. 700). While we have determined that, at the motion to dismiss stage, the district court erred in finding the CSX claims time-barred, some of those claims may yet be determined as time-barred at a later stage of the proceedings. However, even if a claim or claims are found to be time-barred, that fact alone does not make the claim ineligible as a predicate act to establish a RICO pattern.

In order to demonstrate the requisite pattern of RICO activity, the statute permits the contemplation of acts within a ten year period. 18 U.S.C. § 1961(5). Thus, even assuming that only one of those acts occurred within the statute of limitations period, that would not defeat the existence of a RICO pattern provided the other predicate act took place within the applicable ten year period. Whether all of the injuries might independently support an award of damages is a separate issue.

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