Integrity Insurance v. Teitelbaum
Docket: DOCKET NO. L-20657-86; DOCKET NO. L-020658-86; DOCKET NO. L-020588-86; DOCKET NO. L-020662-86; DOCKET NO. L-020652-86; DOCKET NO. L-30027-86; DOCKET NO. L-38097-86; DOCKET NO. L-020663-86; DOCKET NO. L-38102-86; DOCKET NO. L-38098-86; DOCKET NO. L-30605-8
Court: New Jersey Superior Court Appellate Division; January 16, 1990; New Jersey; State Appellate Court
A motion to file a Third Amended Complaint has been presented by Kenneth Merin, Liquidator of Integrity Insurance Company, concerning a civil enforcement action under New Jersey's RICO Act. The action was initiated two years after the cause of action accrued, but before the four-year statute of limitations expired. The central issue is whether the statute of limitations bars this action, as New Jersey’s RICO statute lacks an express limitations period. In the absence of state law guidance, federal case law can be utilized, particularly since New Jersey's RICO statute parallels the federal RICO structure and purpose. Historical context shows that until 1987, federal civil RICO lacked a designated statute of limitations, leading courts to apply the state statute most analogous to the case. The U.S. Supreme Court established in Agency Holding Corp. v. Malley-Duff Associates that the four-year statute of limitations from the Federal Clayton Act applies to federal RICO civil enforcement actions. The Court noted both statutes aim to address economic injuries and offer treble damages, thereby encouraging private enforcement. The multistate nature of RICO necessitates a uniform federal statute of limitations to avoid forum shopping and complex litigation. Consequently, New Jersey’s borrowing of federal RICO principles supports applying the four-year federal limitations period to claims under the New Jersey RICO statute, which also aligns with the four-year limitations in New Jersey’s Antitrust Act. Thus, the court will apply the four-year federal statute of limitations to the plaintiff's civil RICO claims. New Jersey will adopt a uniform statute of limitations, addressing previous uncertainties and minimizing unnecessary litigation. Defendants have cited Kronfeld v. First Jersey National Bank and Addis v. Logan Corp. to argue for a two-year statute of limitations under N.J.S.A. 2A:14-10 for State RICO claims, claiming RICO acts as a penal forfeiture statute. However, the Third Circuit Court of Appeals in Agency Holding Corp. rejected this argument, clarifying that civil RICO is not a forfeiture statute and that the two-year Pennsylvania forfeiture statute does not apply. The Supreme Court also noted the absence of comparable state law to analogize RICO. The court determined that RICO's diverse predicate acts cannot be generalized and thus established that the appropriate statute of limitations for New Jersey RICO claims is four years, as outlined in Agency. Consequently, the court grants the plaintiffs' motion to file a Third Amended Complaint within four years of the civil RICO claim's accrual. Additionally, N.J.S.A. 2C:1-6(g) may impose a five-year statute of limitations, but the court does not address its applicability in this case.