Prudential Insurance Company of America; Pic Realty Corp; 745 Property Inv v. United States Gypsum Company

PRECEDENTIAL
UNITED STATES COURT OF
APPEALS FOR THE THIRD CIRCUIT
NO. 02-3837
PRUDENTIAL INSURANCE
COMPANY OF AMERICA;
PIC REALTY CORP;
745 PROPERTY INV
v.
UNITED STATES GYPSUM
COMPANY; W.R. GRACE &
COMPANY; THE CELOTEX
CORPORATION; UNITED STATES
MINERAL PRODUCTS COMPANY;
KEENE CORPORATION; PFIZER,
INC.; ASBESTOSPRAY
CORPORATION; JOHN DOE
COMPANIES, fictitious names for
presently unidentified entities
(District of New Jersey Civil No.
87-cv-4227)
THE PRUDENTIAL INSURANCE
COMPANY
v.
NATIONAL GYPSUM COMPANY
(District of New Jersey Civil No.
87-cv-4238)
The Prudential Insurance
Company of America,
PIC Realty Corporation and
745 Property Investments,
Appellants
On Appeal from the United States
District Court for the District
of New Jersey
(D.C. Civil Nos. 87-cv-04227
and 87-cv-04238)
District Judge: Hon. Harold A.
Ackerman
Argued September 3, 2003
Before: SLOVITER, NYGAARD and
ROTH, Circuit Judges
(Filed: February 20, 2004)
Robert J. Gilson (Argued)
Khaled J. Klele
Riker, Danzig, Scherer, Hyland &
Perretti
Morristown, NJ 07962
David Boies
Robin A. Henry
Boies, Schiller & Flexner
Armonk, NY 10504
Attorneys for Appellants

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Kell M. Damsgaard
Kevin M. Donovan (Argued)
Morgan, Lewis & Bockius
Philadelphia, PA 19103
Attorneys for Appellee
US Gypsum Company
Nancy McDonald
Meredith Walling
McElroy, Deutsch & Mulvaney
Morristown, NJ 07962
Attorneys for Appellee
US Mineral Products
OPINION OF THE COURT
SLOVITER, Circuit Judge.
This case, one of the myriad
asbestos cases that have besieged the
courts, both state and federal, comes to us
from a somewhat different perspective
than most of the others. The plaintiffs,
The Prudential Insurance Company of
America, PIC Realty Corporation, and 745
Property Investments (hereinafter referred
to collectively as “Prudential”), are owners
and operators of buildings that installed
asbestos-containing materials (“ACMs”)
that sued asbestos manufacturers to
recover the costs of monitoring and
remediation. Prudential appeals the
District Court’s orders granting the
motions of defendants United States
Gypsum Company (“Gypsum”) and United
States Mining Company (“USMP”) for
summary judgment dismissing Prudential’s
claims under the Racketeer Influenced and
Corrupt Organizations Act (“RICO”), 18
U.S.C. § 1961 et seq., as time-barred by
the statute of limitations. Prudential
argues that the District Court erred in
applying the “injury discovery rule” in
ascertaining when Prudential’s RICO
claims began to accrue, that there exist
disputed issues of material fact concerning
when Prudential knew or should have
know of its injuries from ACMs in its
properties, and that the statute of
limitations for Prudential’s RICO claims
should have been tolled due to Gypsum’s
active and fraudulent concealment of
known health risks associated with ACMs.
We will affirm.
INTRODUCTION
Prudential, a mutual insurance
company, is one of the largest life,
pr op er ty, and casualty insurance
underwriters in the world. It is also one of
the largest real estate investors in North
America, maintaining from the 1970s to
the early 1980s “the largest real estate
portfolio of any company in the world”
with hundreds of commercial real estate
properties. App. at 394a. Gypsum and
USMP previously engaged in the
manufacturing and sale of ACMs. Their
products were widely used as construction
materials throughout the United States.
Prudential contends that ACMs
manufactured by both Gypsum and USMP,
as well as other defendants not parties to
this appeal, were used for fireproofing in

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at least eighteen of its buildings.1
According to Prudential, it only began to
appreciate the hazards associated with in-
place asbestos in 1984 at the time it had to
remove ACM s from one of its properties,
the Chubb Building in Short Hills, New
Jersey, before its demolition. The ACMs
were removed at a cost of approximately
one million dollars. In late 1984,
Prudential established a task force to
investigate the in-place ACMs in its
buildings. A Prudential internal survey
conducted between 1985 and 1986
discovered that most of the buildings
involved in this litigation, as well as
approximately 100 others, contained
ACM s. As a result, Prudential incurred
hundreds of millions of dollars in expenses
relating to the maintenance, testing, and
removal of ACMs in its buildings. It has
refused to acquire or mortgage properties
containing ACMs since 1986.
Asbestos had, however, already
become a well-known and important
public health and safety issue in the United
States prior to 1984. In April 1973, the
E nvironmental Protection Agency
(“EPA”) established a National Emission
Standard for Asbestos that severely
restricted the manufacturing and
application of ACMs, as well as the
demolition of buildings containing
fireproofing and insulation ACMs. 38
Fed. Reg. 8829 (Apr. 6, 1973). That
standard regulated spray-on ACMs by
limiting the concentration of asbestos in
such ACM s and forbidding the visible
emission of such materials to the outside
air during the spraying process. Id. at
8830. It also required that “[a]ny owner or
operator of a demolition operation who
intends to demolish any institutional,
commercial, or industrial building . . .
which contains any boiler, pipe, or lead-
supporting structural member that is
insulated or fireproofed with friable
asbestos material” shall notify the EPA in
advance of the demolition and follow
proper ACM-removal procedures set forth
in the standard. Id. at 8829. In 1975, the
EPA expanded this National Emission
Standard to cover renovation activities
involving buildings containing ACMs by
mandating specific notification and
removal procedures for such in-place
ACM s. 40 Fed. Reg. 48,299-,300 (Oct.
14, 1975). It further amended the standard
in 1978 to “extend coverage of the
demolition and renovation provisions . . .
to all friable asbestos materials and extend
the scope of the asbestos spraying
provisions . . . to all materials that contain
more than 1 percent asbestos.” 43 Fed.
Reg. 28,372 (June 19, 1978).
The EPA also published various
guidelines and regulations on asbestos
management. One such EPA document
from 1978, titled “Hazard Abatement from
Sprayed Asbestos-Containing Materials in
Buildings: A Guidance Document” that
1 Although Prudential’s initial claims
covere d a p p r o x i m a t e l y s i x ty -o n e
buildings, that number was reduced to
eighteen buildings by the time the District
Court entered a Final Pretrial Order in
1996.

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was prepared “for those involved in the
use, removal, and disposal of asbestos
materials in the building trades,” states that
“[a]sbestos in all its forms is considered a
serious respiratory hazard. . . . Unlike most
chemical carcinogens, the mineral fibers
persist in the environment almost
indefinitely and, when present in a
building space open to its occupants,
represent a continuous source of
exposure.” App. at 439a. The document
also includes information on asbestos
exposure, control, containment, and
removal. App. at 480a-500a. The EPA
issued a similar “guidance document” for
ACMs in school buildings in 1979 and
another report on controlling friable ACMs
in buildings in March 1983. App. at 556a-
626a, 736a-817a.
In addition, the Occupational Safety
and Health Administration (“OSHA”) had
issued regulations on construction
workers’ exposure to asbestos. The
imposition of these regulations and the
increasing public debate regarding the
health hazards of asbestos led various
asbestos manufacturers, in cludin g
Gypsum, to disseminate additional
information regarding the use and risks of
ACM s.
As Gypsum correctly states in its
brief:
In sum, before October 20,
1983, not only had the
federal government (OSHA
and EPA) issued mandatory
r e g u l a ti o n s r e g a r d i n g
a s b e s t o s p r o d u c t s in
buildings, but the EPA had
issued numerous guidance
documents detailing for
b u i l d in g o w n e r s t h e
widespread use of asbestos-
c o n t a i n i n g b u i l d i n g
materials, the association
between asbestos exposure
and disease, the potential
risks of in-place asbestos-
c o n t a i n i n g p r o d u c t s ,
methods to detect asbestos,
and recommendations for
proper actions to be taken
once asbestos-containing
products are identified.
Appellee Gypsum’s Br. at 13.
There is record evidence that
various Prudential employees were aware
of the existence of ACMs in at least some
of Prudential’s properties prior to 1984.
Arcadius E. Zielinski, an architect
formerly in Prudential’s Corporate
Services and Building Department,
testified in a deposition that he surveyed
filed specifications of Prudential’s home
office buildings to determine whether they
contained ACMs. He stated that he told
the Vice President of Prudential’s
Co rpora te Services and B uildin g
Department in May 1981 that such ACMs
would not be hazardous so long as they
were firm and remained in-place. An
affidavit of David Holick, Jr., the director
of architecture at Prudential’s real estate
investment department in Houston from
1979 to 1984, states that ACM s were a

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topic discussed among some of
Prudential’s employees. In addition,
asbestos testings were conducted, either by
or at the request of local tenants, in several
of Prudential’s buildings prior to 1984.
For example, in 1979 IBM Corporation, as
tenant, tested the airborne asbestos levels
at Prudential’s Jacksonville, Florida
building and forwarded the results to
Prudential. App. at 48a-49a, 1053a-1151a.
Asbestos testing was also conducted at
least twice on the premises of Five Penn
Center in Philadelphia prior to 1981.
Similar asbestos testings were also
conducted in several Prudential buildings
not at issue in this litigation.
Prudential initiated this action on
October 20, 1987 in the United States
District Court for the District of New
Jersey, asserting a claim under the
Comprehensive Environmental Response,
Compensation, and L iability A ct
(“CERCLA”), 42 U.S.C. § 9601 et seq.,
and state claims under theories of absolute
liability, strict liability, negligence, breach
of express and implied warranties, fraud,
misrepresentation, fraudulent concealment,
unfair and deceptive trade practices, civil
c o n s p i r a c y , r e s t i t u t i o n , a n d
indemnification. App. at 11,097a-11,153a.
The District Court, upon motions by
defendants, dismissed Prudential’ s
CERCLA claim, but granted Prudential’s
motion for leave to amend its complaint to
add claims under the RICO statute.
Prudential Ins. Co. of Am. v. U.S. Gypsum
Co., 711 F. Supp. 1244 (D.N.J. 1989).
Prudential’s RICO claims thus form the
sole basis for federal subject matter
jurisdiction in this case.
In its First Amended Complaint,
P r u d e n t ia l a l l e g e d t h a t A C M s
manufactured by defendants and used in its
properties pose a potential health risk, and
that it has expended and will continue to
expend resources to inspect, monitor,
maintain, and abate any problems caused
by the presence of ACMs. It also asserted
past and future damages resulting from
actual property damages, diminution of
property values, loss of rental income, and
disruption to tenants’ businesses. App. at
11,107a-08a.
After several years of discovery,
Gypsum and W.R. Grace, another
defendant, filed a motion for summary
judgment in October 1991 to dismiss
Prudential’s RICO claims on both
substantive and statutes of limitations
grounds. They also sought to dismiss
Prudential’s state law claims based on
statutes of limitations. Prudential, in turn,
filed a motion to strike defendants’ statute
of limitations defenses. The District
Court, in a published opinion dated July
21, 1993, denied defendants’ motion for
summary judgment to dismiss Prudential’s
RICO claims on substantive grounds and
also denied Prudential’s motion to strike
defendants’ statute of limitations defenses.
Prudential Ins. Co. of Am. v. U.S. Gypsum
Co., 828 F. Supp. 287 (D.N.J. 1993).
Focusing on the causation requirement of
a RICO claim, the District Court stated
that it “cannot rule as a matter of law” that
causation did not exist between
defendants’ alleged violations and

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Prudential’s injuries. Id. at 296. It also
ruled that “there are disputed issues of fact
as to whether Prudential actually knew of
its injury prior to 1984; and . . . the
defendants are entitled to argue to a jury
that Prudential should have known of its
injury prior to 1984.” Id. at 297.
On June 9, 1994, the District Court
denied the motion for summary judgment
by Gypsum and another defendant,
Asbestospray Corporation, to dismiss
Prudential’s RICO claims on statute of
limitations grounds, finding that disputed
issues of material fact existed as to
whether Prudential had knowledge of the
elements of its RICO claims more than
four years prior to filing the suit.
Prudential Ins. Co. of Am. v. U.S. Gypsum
Co., No. 87-4238 (D.N.J. June 9, 1994).
Based on its 1993 ruling, the District Court
also reserved the issue of what Prudential
should have known for trial. The District
Court then denied defendants’ summary
judgment motions dismissing Prudential’s
state law claims, although it did dismiss
Prudential’s breach of warranty claims.
The parties proceeded to complete
pretrial discovery, and the District Court
entered its Final Pretrial Order in 1996.
Thereafter Gypsum, joined by W.R. Grace,
filed summary judgment motions to
dismiss Prudential’s RICO claims on
statute of limitations and substantive
grounds.2 USMP joined in these motions.
After oral argument, the District Court on
June 20, 2001 granted Gypsum’s motion
for sum mary jud gment dismissing
Prudential’s RICO claims as barred by the
statute of limitations. It also granted the
motion with respect to USMP on July 12,
2001. Noting developments subsequent to
its 1993 and 1994 opinions in both the
Supreme Court and this court regarding
when a civil RICO claim accrues, the
District Court held that Prudential “should
have known” of its injury before October
20, 1983, the relevant date for purposes of
the four-year RICO statute of limitations.
Prudential Ins. Co. of Am. v. U.S. Gypsum
Co., Nos. 87-4227, 87-4238 (D.N.J. June
20, 2001). In stating that “it should not
have reserved the issue of what Prudential
should have known [regarding its RICO
claims] for trial” in its 1994 opinion, the
District Court explained:
While Prudential’s 1993
m o t i o n f o r s u m m a r y
judgment raised the issue of
whether Grace and Gypsum
could provide evidence
sufficient to show that
Prudential should have
known of its injuries, Grace
and Gypsum’s 1994 motion
for summary judgment
asked a different question:
2 Subsequent to the filing of these
motions, W.R. Grace filed a petition for
voluntary relief pursuant to Chapter 11 of
the United States Bankruptcy Code. This
action therefore was automatically stayed
as to W.R. Grace pursuant to 11 U.S.C. §
362(a).

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whether Prudential could
provide evidence sufficient
to refute the claim that it
should have known of its
injuries.
App. at 34a (emphasis in original).
The District Court then concluded
that based on its reconsideration of the
record and facts before it, and in light of
changes in the law regarding the accrual
period under RICO, Prudential did not
satisfy its summary judgment burden with
respect to that latter question. App. at 53a.
Having thus dismissed Prudential’s only
federal claim, the District Court declined
to exercise supplemental jurisdiction and
dismissed Prudential’s remaining state law
claims against Gypsum and USMP without
prejudice. Shortly thereafter, both
Gypsum and USM P filed for bankruptcy.
Prudential timely appealed the June
20, 2001 order after securing a stay of
Gypsum’s and USMP’s federal bankruptcy
proceedings as well as certification by the
District Court under Federal Rule of Civil
Procedure 54(b). The only issue on appeal
is whether the District Court erred in
dismissing, on summary judgment,
Prudential’s RICO claims as time-barred.
JURISDICTION AND
STANDARD OF REVIEW
The District Court properly
exercised jurisdiction over this action
under 28 U.S.C. § 1331 based on
Prudential’s claims arising under RICO.
The District Court also had supplemental
jurisdiction over Prudential’s state law
claims pursuant to 28 U.S.C. § 1367. We
have jurisdiction over the District Court’s
final judgment pursuant to 28 U.S.C. §
1291.
We exercise plenary review of a
district court’s grant of summary
judgment. SEC v. Hughes Capital Corp.,
124 F.3d 449, 452 (3d Cir. 1997).
Summary judgment may be granted “if the
pleadings, depositions, answers to
interrogatories, and admissions on file,
together with the affidavits, if any, show
there is no genuine issue as to any material
fact and that the moving party is entitled to
a judgment as a matter of law.” Fed. R.
Civ. P. 56(c).
DISCUSSION
Although the RICO statute does not
expressly provide a statute of limitations,
the Supreme Court, by analogy to the
Clayton Act, has established a four-year
limitations period for civil RICO claims.
Agency Holding Corp. v. Malley-Duff &
Assoc. Inc., 483 U.S. 143, 156 (1987).
Prudential filed this action on October 20,
1987. Therefore, we may uphold the
District Court’s summary judgment order
only if the statute of limitations for
Prudential’s RICO claims did not begin to
accrue before October 20, 1983.
A. Test for Accrual of Civil RICO
Claims
In Malley-Duff, the Supreme Court

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left open the question of when the statute
of limitations for civil RICO claims begins
to accrue. It has not resolved that issue but
it has rejected several standards this court
had used to determine when the RICO
statute of limitations period accrues.
Although most of the Courts of Appeals at
that time applied forms of an “injury and
pattern discovery rule” for determining the
accrual of RICO claims, this court applied
a “last predicate act” exception under
which “[if], as a part of the same pattern of
racketeering activity, there is further injury
to the plaintiff or further predicate acts
occur, . . . the accrual period shall run from
the time when the plaintiff knew or should
have known of the last injury or the last
predicate act which is part of the same
pattern of racketeering activity. The last
predicate act need not have resulted in
injury to the plaintiff but must be part of
the same ‘pattern.’” Keystone Ins. Co. v.
Houghton, 863 F.2d 1125, 1126 (3d Cir.
1988). In Klehr v. A.O. Smith Corp., 521
U.S. 179 (1997), the Supreme Court
rejected the Third Circuit exception. The
Court reasoned that such a test would
result in a limitations period longer than
that which Congress could have
contemplated, as well as would improperly
allow claimants to recover for injuries
outside of the limitations period by
“bootstrapping” them onto a later and
independent predicate act. Klehr, 521 U.S.
at 187-90.
A few years later, in Rotella v.
Wood, 528 U.S. 549 (2000), the Supreme
Court also rejected the “injury and pattern
discovery rule” itself, under which the
statute of limitations begins to run when
the plaintiff knew or should have known
that each element of a civil RICO claim
existed: the injury, the source of the injury,
and the pattern of activities prohibited
under RICO causing the injury. Id. at 554.
However, the Court did not “settle upon a
final rule,” noting that among available
remaining alternatives were the injury
discovery rule and the injury occurrence
rule. Id. at 554 n.2.
After Rotella, we adopted the injury
discovery rule in Forbes v. Eagleson, 228
F.3d 471 (3d Cir. 2000), holding that in
determining statute of limitations issues in
civil RICO claims “we must determine
when the plaintiffs knew or should have
known of their injury.” Id. at 484. In
addition to the injury, the plaintiffs must
also have known or should have known of
the source of their injury. Id. at 485. As
we explained in Forbes, “nothing more”
than these two requirements “was required
to trigger the running of the four-year
limitations period [of a civil RICO
claim].” Id. (citations omitted).
Prudential does not dispute that the
injury discovery rule is the governing legal
standard in this case. It quarrels, rather,
with that rule’s application in this case.
Specifically, Prudential argues that, based
on the record of this case, it could not have
known its injuries prior to October 20,
1983, and that in any event, the injury it
suffered must be an “actual” injury before
the statute of limitations is triggered.
B. Whether Prudential Should Have

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Known of Its Injuries Prior to
October 20, 1983
To evaluate Prudential’s argument,
we start by looking to the injury it alleged
in its amended complaint. App. at
11,097a-11,153a. In that complaint,
Prudential alleges injuries:
relating to abatement and
building monitoring actions,
building survey and testing
costs, tenant relocation
c o s t s , opera t i o n s a n d
maintenance program costs
for asbesto s-con tainin g
materials before their
removal from buildings,
substantial disruption to
their business, substantial
property damage to their
property (such as carpeting,
ceilings, curtains, etc.), and
other costs associated with
t h e c o n t a m i n a ti o n o r
potential contamination of
the buildings. Plaintiffs
have also suffered and will
s u f f e r , a m o n g o t h e r
damages, the loss of rental
income from the buildings
d u r i n g a b a t e m e n t
procedures or due to
premature tenant departures,
and the diminution in the
commercial value of the
properties.
App. at 11,108a (emphasis added). This
language explicitly states broad injuries
that included both past and future harm to
Prudential. More specifically, the
complaint alleges injuries that include
prospective damages for complying with
federal regulations concerning the
renovation, alteration, or demolition of
buildings containing ACMs:
Because of the potential
health and contamination
dangers, plaintiffs have been
compelled to determine the
extent to which asbestos-
containing materials are
present in their buildings
and the extent to which the
buildings and their contents
have been or may be
contaminated with asbestos
fibers. Where such materials
or contamination have been
or are found, plaintiffs have
adopted or will have to
a d o p t , p u r s u a n t t o
governmental regulations
and common-law duties,
costly abatement measures
to remove and replace,
enclose, encapsulate, or
repair such materials in
order to eliminate the
potential asbestos health
hazard created by such
c o n t a mi n a t io n o f th e
buildings.
App. at 11,107a. Prudential’s amended
complaint thus seeks recovery for both
past and future injuries caused by the
presence of ACMs in Prudential’s

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properties.
In holding that Prudential has not,
and could not, produce evidence sufficient
to refute the defendants’ claims that
Prudential should have known of the injury
it alleged in its amended complaint prior to
October 20, 1983, the District Court
reviewed government regulations and
publications as well as evidence pertinent
to Prudential’s own buildings and
employees regarding the hazards of ACMs
and related precautions. Some of the
evidence examined by the District Court is
recited in the introductory section of this
opinion. In reviewing the effect of
government information regard ing
asbestos on Prudential’s awareness of
ACM hazards, it is important to note that
Prudential is a very sophisticated company
that operates a large casualty insurance
business and an extensive estate
investment business. Such a sizable
business operation not only provided
Prudential with more opportunities than an
average plaintiff to access ACM-related
information, but it should have also given
Prudential a greater incentive to diligently
research and investigate any potential
injuries it may suffer through the presence
of ACMs in its own properties. As the
District Court correctly pointed out,
because Prudential’s liability exposure was
magnified by the large size of its real
estate portfolio, “prudence dictates that
Prudential should have remained informed
of its legal responsibilities.” App. at 43a.
Nor was Prudential obliged to rely
solely on government warnings. Multiple
incidents and tenant complaints in
Prudential’s own buildings should have
also provided Prudential notice of the
ACM-related injuries it alleges in the
amended complaint. At Five Penn Center
in Philadelphia, Prudential knew that the
ACMs were used for fireproofing, and that
the ACMs were sources of potential future
hazards; it sent a letter on September 29,
1976 to the building’s seller, giving formal
notice that the seller was in breach of the
Agreement of Sale because, among other
things, “it appears that the building was in
v i o l a ti o n of law pertain in g to
concentration of air-borne asbestos on and
prior to the date of settlement under said
Agreement of Sale.” App. at 936a.
Colonial Penn, a major tenant in the
building, complained in 1981that ACMs
fell from ceiling in one of its offices, and
Prudential incurred cleaning and
encapsulating expenses related to the
incident.
Similarly, Prudential was aware of
the presence of ACMs in the IBM
Building in Jacksonville, Florida as early
as 1979, when tenant IBM requested
Prudential’s assistance in surveying the
fireproofing material in the building.
Based on its own testing, IBM informed
Prudential in January 1980 that a sample
of the fireproofing material contained six
percent of Chrysotile asbestos. App. at
1055a. At Prudential’s own request, IBM
forwarded a copy of its asbestos and air
sample analyses to Prudential in March
1980. These incidents and tenant
complaints, combined with government
information, should therefore have

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provided Prudential inquiry notice
regarding the potential hazards of ACMs
in its properties.3
Despite the facts supporting the
District Court’s legal conclusion,
Prudential argues that because these
incidents did not reflect actual
contamination prior to 1984, they do not
show the same type of injuries for which
Prudential currently seeks damages. It
contends that pre-1984 government
regulations and information were not
directly related to in-place ACMs, and that
its actions with respect to building tenants
merely demonstrated business decisions to
placate tenants rather than actual
awareness of potential hazards related to
ACM s. These contentions are to support
Prudential’s principal argument that it had
no reason to know of its ACM-related
injuries until it took on the demolition of
the Chubb Building in 1984, when ACMs
in that building released sufficient asbestos
fibers so as to contaminate its building.
We note, however, that the injury
discovery rule in Forbes allows the
limitations period of civil RICO claims to
accrue not only if Prudential actually knew
of its injuries, but also if Prudential should
have known of its injuries. Forbes, 228
F.3d at 484. As the District Court
explained in its opinion, because Gypsum
and USMP in support of their motions for
summary judgment provided sufficient
evidence that Prudential “should have
known” before October 20, 1983 of the
injuries it alleged in the amended
complaint, Prudential was required to
provide sufficient evidence to refute that
claim in order to defeat summary
judgment. Given the above facts, we agree
with the District Court that:
P r u d e n t i a l ’ s s h o w i n g
r e g a r d i n g i t s a c t u a l
knowledge falls far short . .
. of demonstrating why
P r u d e n t i a l r e m a i n e d
unaware of the potential
hazard asbestos posed in its
holdings. While the court
may accept for the purposes
o f t h i s m o t i o n th a t
Prudential was not aware of
t h e E P A ’ s r e p e a t e d
warnings about the potential
hazards of in-place asbestos
. . . such events should have
t r i g g e r e d P r u d e n t i a l ’ s
inquiry into the hazards
posed by asbestos.
App. at 37a. For example, the EPA
regulations on the removal of asbestos
3 As the proprietor of a large real estate
portfolio, Prudential should have also
become aware of ACM-related hazards
through the existence of ACMs in other
Prudential properties not at issue in this
litigation. Evidence show, for example,
that Prudential was aware of the presence
of ACMs in Prudential Center, Boston as
early as 1978; it received multiple
inquiries and from tenants, OSHA, and the
Massachusetts Office of Occupational
Hygiene regarding ACM -related issues.
App. at 50a-51a, 1006a-25a.

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during building demo litions were
promulgated in the 1970s. Therefore even
if the demolition of the Chubb Building in
1984 was the first demolition of any of
Prudential’s buildings, it should have had
prior awareness, as a major real estate
investor, of the regulations and the ACM-
related danger to which they were aimed.
As stated in an EPA training document
from February 1983:
A building owner might
choose to believe there is no
problem in his/her building,
but, as we have seen, it is
clearly prudent to find out
the facts. With the rising
public awareness of asbestos
hazards, most any building
owner would be hard
pressed to justify n o
reasonable knowledge of the
hazard.
App. at 46a.
Prudential also admits that some of
its own employees “had some awareness
of asbestos as an issue in certain of
Prudential’s buildings during the late
1970s and early 1980s.” Appellants’ Br.
at 34. We therefore agree with the District
Court that Prudential should have known
of the injuries alleged in its complaint
prior to October 20, 1983.
C. Pruden tial’s “Actual Injury”
Argument
In addition to its factual contentions
regarding the timing of its awareness of
ACM-related hazards, Prudential argues
that the Forbes standard requires actual,
rather than potential, harm to a civil RICO
plaintiff. It asserts that it suffered no
injuries either from its knowledge of the
existence of in-place ACMs in its
properties or from the risk of injuries
stemming from those ACMs. Prudential
asserts that ACMs only cause injury when
they deteriorate and begin releasing
hazardous levels of asbestos fibers that
contaminate buildings, and therefore it
suffered injury only when actual
contamination required it to address or
remedy the hazards such contaminations
posed. Appellants’ Br. at 21-22.
A s we prev iously no ted,
Prudential’s amended complaint clearly
seeks damages for both past and future
injuries. Consequently, Prudential cannot
also argue that the statute of limitations for
its RICO claims should not have begun to
run until those injuries became “actual”
injuries and it needed to take remedial
measures and incurred expenses for
remediation. Such a legal rule would
place too much discretion in the plaintiff’s
hands, and would be antithetical to the
“basic policies of all limitations
provisions: repose, elimination of stale
claims, and certainty about a plaintiff’s
opportunity for recovery and a defendant’s
potential liabilities.” Rotella, 528 U.S. at
550. RICO’s provision of a civil remedy
was enacted to “turn [plaintiffs] into
prosecutors, ‘private attorneys general,’
dedicated to eliminating racketeering
activity. . . . It would, accordingly, be

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strange to provide an unusually long basic
limitations period that could only have the
effect of postponing whatever public
benefit civil RICO might realize.” Id. at
557-58. Prudential’s proposed “actual
injury” standard would allow a civil RICO
plaintiff to control when the relevant
limitations periods accrue through its
timing of the assessment, investigation,
and correction of its injuries, thereby
producing precisely the long limitations
periods frowned upon in Rotella.
Prudential cites, as support for the
“actual injury” standard it puts forth,
several federal and state cases supporting
its argument that in-place ACMs only
cause injuries when they release hazardous
levels of asbestos fibers into buildings.
Appellants’ Br. at 20-22. We note,
however, that it is Prudential itself that
chose to pursue redress under RICO for
both monitoring and testing costs
associated with potential contamination as
well as costs for abatement and repair in
its amended complaint. In contrast, the
plaintiffs in the cases cited by Prudential
confined their claims to costs of
remediation, and pursued their redress
through state-law claims that require
different accrual analyses than used in
RICO cases. The plaintiffs in Port
Authority of New York and New Jersey v.
Affiliated FM Insurance Co., 311 F.3d 226
(3d Cir. 2002), for example, pursued their
asbestos claims under New Jersey state
law based on first-party insurance
contracts rather than on RICO or tort
liability grounds. They also sought
recovery only “for expenses incurred in
conjunction with the abatement of
asbestos-containing materials in their
structures . . . .” Id. at 230. The injury
analysis in that case, therefore, turned on
the interpretation of contract provisions
rather than on any statute of limitations.
Similarly, the plaintiff in MDU
Resources Group v. W.R. Grace and Co.,
14 F.3d 1274 (8th Cir. 1994), filed claims
under North Dakota state-law theories of
negligence, strict liability, failure to warn,
and breach of warranty, and only sought
recovery for the costs of removing ACMs
from one of its buildings. Id. at 1276. The
MDU court, therefore, focused on actual
asbestos contamination as the point when
injury occurs, because under North
Dakota’s economic-loss doctrine MDU
could not have brought suit until the only
injury it asserted – the ACM-removal costs
it already incurred – materialized. See id.
at 1279 n.8 (suggesting that the statute of
limitations could have begun to run earlier
had MDU claimed different injuries).
The different legal principles
governing the claims and the limited
scopes of injury involved in these cases
required different considerations for
calculating statute of limitations periods
that are not applicable to Prudential’s
broad RICO claims here. We therefore
join the District Court in rejecting
Prudential’s “actual injury” concept as it
relates to the accrual of the statute of
limitations for Prudential’s civil RICO
claims.
D. Fraudulent Concealment

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Finally, Prudential contends that the
statute of limitations should have been
equitably tolled because defendants
fraudulently concealed from Prudential
that it could be or had been injured by in-
place ACMs manufactured by defendants.
It argues that despite long-standing
knowledge of the adverse health effects of
asbestos, defendants did not publicly
disclose these risks and instead advertised
their products as safe in pamphlets,
brochures, direct mailing catalogs, and
other forms of advertisement. Prudential
contends that because of these efforts by
defendants to conceal hazards associated
with ACM s, there exists a genuine issue of
material fact regarding fraudulent
concealment that is sufficient to toll the
limitations period for its RICO claims.
Appellants’ Br. at 9-14.
In Forbes, we held that fraudulent
concealment could be a basis for equitably
tolling the RICO limitations period. 228
F.3d at 486-88. At the summary judgment
stage, a court must determine:
(1) whether there is
sufficient evidence to
support a finding that
defenda nts engaged in
a f f i r m a t i v e a c t s o f
concealment designed to
mislead the pla intiffs
regarding facts supporting
their. . .claim, (2) whether
there is sufficient evidence
to support a finding that
p l a i n t i f f s e x e r c i s e d
reasonable diligence, and
(3) whether there is
sufficient evidence to
support a finding that
plaintiffs were not aware,
nor should they have been
a w a r e , o f t h e f a c ts
supporting their claim until
a time within the limitations
period measured backwards
from when the plaintiffs
filed their complaint.
Id. at 487 (emphasis in original).
The Supreme Court has stated that
to equitably toll the running of a
limitations period in the civil-RICO
c o n t e x t b y c la i m i n g f ra u d u le n t
conce alment, plaintiff s mu st have
exercised “reasonable diligence” to
discover their claim. Klehr, 521 U.S. at
194. We also stated in Mathews v. Kidder,
Peabody & Co., Inc., 260 F.3d 239 (3d Cir.
2001), where we rejected an equitable
tolling claim after finding that the plaintiff
should have known of its injuries, that
“[i]n order to avoid summary judgment,
there must be a genuine issue of material
fact as to whether the Appellants exercised
reasonable due diligence in investigating
their claim.” Id. at 257.
We conclude that Prudential has
failed to satisfy the Forbes standard for
tolling the limitations period for its RICO
claims. Even assuming, as the District
Court did, that Gypsum engaged in
fraudulent concealment, Prudential had not
demonstrated that it exercised reasonable
diligence in discovering or investigating its

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injuries. As the discussion above shows,
irrespective of defendants’ attempts to
conceal from Prudential the hazards posed
by ACM s in Prudential’s buildings,
Prudential had many other sources of
information sufficient to place it on
inquiry notice of such ACM-related
injuries. Prudential should have, for
example, given heed to government
warnings and regulations to undertake
surveys and testing of its buildings.
Moreover, as we noted in Mathews, “to
determine what constitutes ‘reasonable’
due diligence [for determining if a plaintiff
should have known of its injury], we must
consider the magnitude of the existing
storm warnings. The more ominous the
warnings, the more extensive the expected
inquiry.” 260 F.3d at 255. Here, given the
magnitude of Prudential’s commercial real
estate investments and the significance of
the threat ACMs posed to that investment,
a substantial and diligent investigation by
Prudential was called for prior to October
20, 1983. Its failure to have undertaken
such an investigation regarding ACM-
related hazards was, as a matter of law, the
failure to exercise due diligence. We
therefore conclude that the limitations
period for Prudential’s RICO claims was
not tolled under a fraudulent concealment
theory.
CONCLUSION
For the foregoing reasons, we will
affirm the District Court’s orders granting
Gypsum and USMP summary judgment on
statute of limitations grounds and
dismissing Prudential’s remaining state
law claims without prejudice.

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