explaining that the Solicitor General' — who appeared on behalf of the SEC— “urge[d] the application of the 5-year statute of repose specified in [section] 20A [to private actions under Rule 10b-5] .... The 5-year period, it is said, accords with 'Congress's most recent views on the accommodation of competing interests, provides the closest federal analogy, and promises to yield the best practical and policy results in Rule 10b-5 litigation.' ”
How later courts described this case
- explaining that the Solicitor General' — who appeared on behalf of the SEC— “urge[d] the application of the 5-year statute of repose specified in [section] 20A [to private actions under Rule 10b-5] .... The 5-year period, it is said, accords with 'Congress's most recent views on the accommodation of competing interests, provides the closest federal analogy, and promises to yield the best practical and policy results in Rule 10b-5 litigation.' ”
- holding that "[l]itigation instituted pursuant to § 10(b) and Rule 10b-5 therefore must be commenced within one year after the discovery of the facts constituting the violation and within three years after such violation" and that 15 U.S.C. § 78i(e) provides the exact limitations rule
- holding that, prior to the enactment of 28 U.S.C. § 1658, claims under § 10(b) of the Securities Exchange Act must be commenced within one year after the discovery of the facts constituting the violation or within three years after the cause of action accrued
Written by the judges who cited it.
Later courts went against this
Reported superseded on other grounds by Merck & Co. v. Reynolds, 559 U.S. 633 (2010) — not on the Supreme Court's list
501 U.S. 350, 356 (1991), superseded on other grounds, as stated in Merck & Co. v. Reynolds, 559 U.S. 633
Supreme Court of the United StatesApr 27, 20102 citing opinionsother groundsunconfirmed confidenceRead itReported superseded by statute, as recognized in Murphy v. FDIC — not on the Supreme Court's list
501 U.S. 350, 363, 111 S.Ct. 2773, 115 L.Ed.2d 321 (1991) (“The 3-year limit is a period of repose inconsistent with tolling.”), superseded by statute as stated in Murphy v. FDIC, 208 F.3d 959, 965 n. 4 (11th Cir.2000);
Distinguished
Distinguished by Bensinger v. Denbury Resources Inc., 31 F. Supp. 3d 503 (2014)
Id. The Court recently reaffirmed that equitable tolling is inapplicable to statutes of repose in CTS Corp. v. Waldburger, stating that
Distinguished by Prostar v. Massachi, 239 F.3d 669 (2001)
501 U.S. 350, 111 S.Ct. 2773, 115 L.Ed.2d 321 (1991), is distinguishable.
The opinion
Justice O’Connor,
with whom Justice Kennedy joins, dissenting.
I agree that predictability and judicial economy counsel the adoption of a uniform federal statute of limitations for actions brought under § 10(b) and Rule 10b-5. For the reasons stated by Justice Kennedy, however, I believe we should adopt the 1-year-from-discovery-rule, but not the 3-year period of repose. I write separately only to express my disagreement with the Court’s decision in Part IV to apply the new limitations period in this case. In holding that respondents’ suit is time barred under a limitations period that did not exist before today, the Court departs drastically from our established practice and inflicts an injustice on the respondents. The Court declines to explain its unprecedented decision, or even to acknowledge its unusual character.
Respondents, plaintiffs below, filed this action in Federal District Court in 1986. Everyone agrees that, at that time, their claims were governed by the state statute of limitations for the most analogous state cause of action. This was mandated by a solid wall of binding Ninth Circuit authority dat *370 ing back more than 30 years. 1 See ante, at 353. The case proceeded in the District Court and the Court of Appeals for almost four years. During that time, the law never changed; the governing limitations period remained the analogous state statute of limitations. 2 Notwithstanding respondents’ entirely proper reliance on this limitations period, the Court now holds that their suit must be dismissed as untimely because respondents did not comply with a federal limitations period announced for the first time today — 472 years after the suit was filed. Quite simply, the Court shuts the courthouse door on respondents because they were unable to predict the future.
One might get the impression from the Court’s matter-of-fact handling of the retroactivity issue that this is our standard practice. Part IV of the Court’s opinion comprises, after all, only two sentences: the first sentence sets out the 1-and-3-year rule; the second states that respondents’ complaint is untimely for failure to comply with the rule. Surely, one might think, if the Court were doing anything out of the ordinary, it would comment on the fact.
Apparently not. This Court has, on several occasions, announced new statutes of limitations. Until today, however, the Court had never applied a new limitations period retroactively to the very case in which it announced the new rule so as to bar an action that was timely under binding Circuit precedent. Our practice has been instead to evaluate the case at hand by the old limitations period, reserving the new rule for application in future cases.
*371 A prime example is Chevron Oil Co. v. Huson, 404 U. S. 97 (1971). The issue in that case was whether state or federal law governed the timeliness of an action brought under a particular federal statute. At the time the lawsuit was initiated, the rule was that federal law governed. This Court changed the rule, holding that the timeliness of an action should be governed by state law. The Court declined to apply the state statute of limitations in that case, however, because the action had been filed long before the new rule was announced. The Court recognized, sensibly, that its decision overruled a long line of Court of Appeals’ decisions on which the respondent had properly relied, id., at 107 ; that retroactive application would be inconsistent with the purpose of using state statutes of limitations, id., at 107-108 ; and that it would be highly inequitable to pretend that the respondent had “ ‘slept on his rights’” when, in reality, he had complied fully with the law as it existed and could not have foreseen that the law would change. Id., at 108 .
We followed precisely the same course several years later in Saint Francis College v. Al-Khazraji, 481 U. S. 604 (1987). We declined to apply a decision specifying the applicable statute of limitations retroactively because doing so would bar a suit that, under controlling Circuit precedent, had been filed in a timely manner. We relied expressly on the analysis of Chevron Oil, holding that a decision identifying a new limitations period should be applied only prospectively where it overrules clearly established Circuit precedent, where retroactive application would be inconsistent with the purpose of the underlying statute, and where doing so would be “manifestly inequitable.” Saint Francis College, supra, at 608-609.
Chevron Oil and Saint Francis College are based on fundamental notions of justified reliance and due process. They reflect a straightforward application of an earlier line of cases holding that it violates due process to apply a limitations period retroactively and thereby deprive a party arbitrarily of a *372 right to be heard in court. See Wilson v. Iseminger, 185 U. S. 55, 62 (1902); Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 U. S. 673, 681-682 (1930). Not surprisingly, then, the Court's decision in Chevron Oil and Saint Francis College not to apply new limitations periods retroactively generated no disagreement among Members of the Court: The opinion in Chevron Oil was joined by all but one Justice, who did not reach the retroactivity question; Saint Francis College was unanimous.
Only last Term, eight sense rule that decisions specifying the applicable statute of limitations apply only prospectively. See American Trucking Assns., Inc. v. Smith, 496 U. S. 167 (1990). The question presented in American Trucking was whether an earlier decision of the Court — striking down as unconstitutional a particular state highway tax scheme — would apply retroactively. In the course of explaining why the ruling would not apply retroactively, the plurality opinion relied heavily on our statute of limitations cases:
“When considering sions newly defining statutes of limitations, the Court has focused on the action taken in reliance on the old limitation period — usually, the filing of an action. Where a litigant filed a claim that would have been timely under the prior limitation period, the Court has held that the new statute of limitation would not bar his suit.” Id., at 193-194 .
Four other Justices, retroactivity analysis should apply in other contexts, reaffirmed its application to statutes of limitations. The dissenting Justices stated explicitly that it would be “most inequitable to [hold] that [a] plaintiff ha[s] ‘“slept on his rights’” during a period in which neither he nor the defendant could have known the time limitation that applied to the case.” American Trucking, supra, at 220 (Stevens, J., dissenting), quoting Chevron Oil, supra, at 108 .
*373 After American Trucking, the continued vitality of Chevron Oil with respect to statutes of limitations is — or should be — irrefutable; nothing in James B. Beam Distilling Co. v. Georgia, post, p. 529, alters this fact. The present case is indistinguishable from Chevron Oil and retroactive application should therefore be denied. All three Chevron Oil factors are met. First, in adopting a federal statute of limitations, the Court overrules clearly established Circuit precedent; the Court admits as much. Ante, at 353. Second, the Court explains that “the federal interes[t] in predictability” demands a uniform standard. Ante, at 357. I agree, but surely predictability cannot favor applying retroactively a limitations period that the respondents could not possibly have foreseen. Third, the inequitable results are obvious. After spending 472 years in court and tens of thousands of dollars in attorney’s fees, respondents’ suit is dismissed for failure to comply with a limitations period that did not exist until today.
Earlier this Term, the Court observed that “the doctrine of stare decisis serves profoundly important purposes in our legal system.” California v. Acevedo, 500 U. S. 565, 579 (1991). If that is so, it is difficult to understand the Court’s decision today to apply retroactively a brand new statute of limitations. Part IV of the Court’s opinion, without discussing the relevant cases or even acknowledging the issue, declines to follow the precedent established in Chevron Oil, Saint Francis College, and American Trucking, not to mention Wilson and Brinkerhoff-Faris.
The Court’s cursory treatment of the retroactivity question cannot be an oversight. The parties briefed the issue in this Court. See Brief for Respondents 45-48; Reply Brief for Petitioner 18-20. In addition, the United States, filing an amicus curiae brief on behalf of the Securities and Exchange Commission, addressed the issue explicitly, urging the Court to remand so that the lower court may address the retroactivity question in the first instance. Nevertheless, *374 the Court, for reasons unknown and unexplained, chooses to ignore the issue, thereby visiting unprecedented unfairness on respondents.
Even if I agreed with the Court, I would dissent from Part IV of the Court’s opinion. Our prior cases dictate that the federal statute of limitations announced today should not be applied retroactively. I would remand so that the lower courts may determine in the first instance the timeliness of respondents’ lawsuit.
See Robuck v. Dean Witter & Co., 649 F. 2d 641, 644 (1980); Williams v. Sinclair, 529 F. 2d 1383, 1387 (1976); Douglass v. Glenn E. Hinton Investments, Inc., 440 F. 2d 912, 914-916 (1971); Hecht v. Harris, Upham & Co., 430 F. 2d 1202, 1210 (1970); Royal Air Properties, Inc. v. Smith, 312 F. 2d 210, 214 (1962); Fratt v. Robinson, 203 F. 2d 627, 634-635 (1953).
See Davis v. Birr, Wilson & Co., 839 F. 2d 1369, 1369-1370 (CA9 1988); Volk v. D. A. Davidson & Co., 816 F. 2d 1406, 1411-1412 (CA9 1987); Semegen v. Weidner, 780 F. 2d 727, 733 (CA9 1985); SEC v. Seaboard Corp., 677 F. 2d 1301 , 1308-1309 (CA9 1982).