Summary
The Ninth Circuit affirmed summary judgment for Bank of Hawaii on RICO claims, holding that the four-year statute of limitations from *Agency Holding Corp. v. Malley-Duff & Associates* applied retroactively and barred the complaint because the last predicate act occurred in May 1982, more than four years before suit was filed in 1987. The court also upheld denial of leave to amend under Rule 15(a), finding undue prejudice to the bank from new § 1962(a) and (b) theories requiring additional discovery and relitigation of an insurance coverage dispute, and unjustified delay of over seven months in moving to amend. Key topics: civil RICO statute of limitations, retroactivity of *Agency Holding*, Rule 15(a) amendment standards (prejudice, delay), and summary judgment on limitations grounds.
Topics
Practice areas
Questions Presented
- Whether the district court properly denied appellants' motion for leave to file an amended complaint.
- Whether the district court properly granted appellees' motion for summary judgment based on the statute of limitations.
Holdings
- The district court did not abuse its discretion in denying leave to amend because the amendment would unduly prejudice the appellees and the appellants unduly delayed in filing the motion.
- The district court properly granted summary judgment because the four-year statute of limitations from Agency Holding Corp. v. Malley-Duff & Assocs., Inc. applies retroactively and bars the claim, as the second predicate act occurred in May 1982 and the complaint was filed in January 1987, more than four years later.
Key quotations
“The non-moving party may not oppose summary judgment by allegations but must show specific trial-worthy facts.” (at 1389)
“We accept the view that there was no clear past precedent generally for the statute of limitations under RICO prior to Agency Holding.” (at 1390)
Factual background
In January 1977, OI received a $7.9 million construction contract for drywall work on the MGM Grand Hotel in Reno. The Bank issued a $550,000 line of credit secured by various assets. Between April and August 1977, Jackson learned MGM would not cover cost overruns and intended to abandon the project, but Miyakado persuaded him to finish, resulting in cost overruns of $2 million instead of an estimated $1 million profit. By 1980, OI was financially unable to complete projects, and the Bank obtained further security. In May 1982, appellants signed workout agreements. After unsuccessful litigation against MGM, appellants sued the Bank in state and federal court.
Procedural history
Appellants filed suit in Hawaii state court in September 1986 and in federal court in January 1987, alleging RICO and other claims. The district court dismissed all but the RICO claim, established a discovery deadline, later denied appellants' motion for leave to amend the complaint to add claims under 18 U.S.C. §§ 1962(a) and (b), and granted appellees' motion for summary judgment. This appeal followed.