RICO Statute of Limitations Accrues When Plaintiff Had Sufficient Information to Warrant an Investigation (Merck Unmentioned but Irrelevant)

From Daly v. Pearl Spirits, Inc., 2011 U.S. App. LEXIS 12587 (9th Cir. April 13, 2011):

"The statute of limitations for civil RICO actions is four years." *** "The limitations period for civil RICO actions begins to run when a plaintiff knows or should know of the injury which is the basis for the action." Living Designs, Inc. v. E.I. Dupont de Nemours and Co., 431 F.3d 353, 365 (9th Cir. 2005) (citation omitted). [This is the conventional understanding but the Supreme Court has left open the possibility that the date of injury, regardless of knowledge, may trigger accrual.]

In May, 2004, Daly learned that the company had sold licensing rights to a third-party, who had the option to purchase the company's sole asset at the conclusion of the agreement. Daly's civil RICO claim is time-barred because Daly had "enough information to warrant an investigation" by May, 2004. Living Designs, 431 F.3d at 365. Indeed, by May, 2004, Daly's attorney had already drafted a complaint against Appellees. Daly's argument that the third-party's exercise of the option to purchase in 2006 triggered the statute of limitations is foreclosed by Volk v. D.A. Davidson & Co., 816 F.2d 1406, 1415 (9th Cir. 1987) (holding that the operative date on which the RICO statute of limitations began to run is when a plaintiff learns of the wrong, not the date on which it sustained the loss).

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