Klehr v. A. O. Smith Corp.
Headline: RICO timing narrowed: Court rejects 'last predicate act' rule and requires reasonable diligence to toll the four-year limit, making it harder for very old RICO suits to proceed and affirming dismissal here.
Holding: The Court rejected the Third Circuit’s 'last predicate act' accrual rule for civil RICO, held that fraudulent concealment requires reasonable diligence to toll the four-year limit, and affirmed dismissal of the Klehrs’ suit.
- Limits use of later predicate acts to revive old RICO claims.
- Requires plaintiffs to show reasonable diligence before tolling the four-year deadline.
- Affirms that long-delayed product-fraud suits can be dismissed as time-barred.
Summary
Background
Marvin and Mary Klehr, dairy farmers, sued Harvestore (a silo maker) in 1993 under federal RICO law, saying dishonest ads and dealer statements sold them a defective silo in 1974 that harmed their farm. Harvestore argued the Klehrs waited far longer than the four-year deadline that applies to civil RICO claims, so the lawsuit should be dismissed as time-barred.
Reasoning
The Court considered when a civil RICO claim starts the four-year clock and whether hiding fraud can pause that clock. It rejected the Third Circuit’s
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