T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on a nd i s notpr e c e de nt * e xc e pta s pr ovi de d byN i nth C i r c ui tR ul e 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS F O R T H E N IN T H C IR C U IT I n R e : AME R I C AN F UN DS S E C UR I T I E S L I T I GA T I ON

________________________________ S AB R I NA A. C HI N,

P l ai nt i ff , R O L F B A S L E R , A R D E N G E I S T , a nd ROLF BASL ERRE VO CABL E TR UST, P l ai n t i ffs-A p p el l an t s, v . CA PI TA L G RO U P CO M PA N I ES, I NC . , C AP I T AL R E S E AR C H A ND M A N A G E M E N T C O . , a nd AME R I C AN F UN DS D I S T R I B U T O R S , I N C .,

D efen d an t s-A p p el l ees. N o. 08- 56034 D. C . No . 2 : 0 6 - c v - 0 7 8 1 5 - GA F - RNB ME MOR AN DU M * 

# FI LED SEP 17 2010 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALST he H onor abl e J a m e s K . S i ngl e t on, S e ni orU ni t e d S t a t e s D i s tr i c tJ udge f or ** the D i s tr i c tof

A l a s ka , s i tt i ng byde s i gna t i on. 2 A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e C e n tr a l D is tr ic t o f C a lif o rn ia G a ryA . F e e s s , D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d O c t obe r9, 2009

P a s a d e n a , C a lif

o rn ia B e f or e : W . F L E T C H E R a nd C L I F T O N , C i r c ui tJ udge s , a nd S I N G L E T O N , S e ni or U ni t ed S t at es D i stri ctJudg e. ** P l a i nt i f f S abr i naA . C hi n ( “ C hi n” ) br oughta n a c t i on a ga i ns tC api t a l G r oup C om pa ni e s , I nc . , C api t a l R e s e a r c h a nd M a na ge m e ntC o. , a nd A m e r i c a n F unds D i s tr i but or s , I nc . ( c ol l e c t i ve l y“ A m e r i c a n F unds ” ) , a l l e gi ng vi ol a t i ons of §§ 12( a ) ( 2) a nd 15 of

the 1933 S e c ur i t i e s A c t( 15 U . S . C . §§ 77 l ( a ) ( 2) , 77o) a nd §§ 10( b) a nd 20( a ) of

the 1934 S e c ur i t i e s E xc ha nge A c t( 15 U . S . C . §§ 78j ( b) a nd 7 8 t( a ) ) . A m e r ic a n F u n d s f ile dam o tio n to d is m is s u n d e rF e d e r a l R u le o f C iv il P r oc e dur e 12( b) ( 6) , on the ba s e s tha t : ( 1) the c om pl a i ntf a i l e d t o m e e tthe hei gh t ened pl ea di ng re qu i re m ent s of the P ri vat e S ec uri t i es L i t i gat i on R ef orm A ct of 19 95 and F eder al R ul e of C i vi l P roce du re 9(b); and (2) P l ai nt i ff s’ cl ai m s w er e b a rr e db yth e ap p lic ab le s ta tu te s o f lim ita tio n , i.e . , 15 U . S . C . § 7 7m (one-y ear l i m i t at i on on 19 33 S ec uri t i es A ctcl ai m s) and 2 8 U . S . C . § 1 65 8(b)(1) (tw o-ye ar l i m i t a t i on on 1934 S e c ur i t i e s E xc ha nge A c tc l a i m s ) . T he di s tr i c tc ourtgr a nt e d the m o t i o n t o d i s m i s s , f

i n d i n g th a tP l a i n t i f

f s we r e o n i n q u i ryn o t i c e m o r e th a n two3

y e a r s b e f o r e th e a c tio n w a s f

ile d . T h e d is tr ic t c o u rt d idn o t a d d r e s s th e a lte rn a te g r o u n d , f a ilu r e to p le a dac au s e o f a c tio n . T h e d is tr ic t c o u rt h a dju r is d ic tio n u n d e r2 8 U .S .C . § 1 3 3 1 a n d1 5 U .S .C . § 7 8 a a . We h a v e j u r i s d i c t i o n u n d e r2 8 U. S . C . § 1 2 9 1 . We r e v i e w de no vo the gr a nt o f am o tio n to d is m is s u n d e rR u le 1 2 ( b ) ( 6 ) . C ou si ns v. L ocky er , 568 F . 3d 1063, 10 67 (9th C i r. 20 09 ). T he f a c t s of thi s c a s e a r e s e tf

orth i n de t a i l i n the w r i tt e n de c i s i on of the d is tr ic t c o u rt a n da r e w e ll k n o w n to th e p a rtie s . S ubs e que ntt o the de c i s i on i n the di s tr i c tc ourta nd the c om pl e t i on of br i e f i ng i n thi s c ourt , the U ni t e d S t a t e s S upr e m e C ourtde c i de d Mer ck & Co. , Inc. v . R e y nolds , 559 U . S . __, 130 S . C t . 1784 ( 2010) . O n r e m and, w e appl i e d Mer ck t o af a c tua l l ys i m i l a rc a s e i n B et z v . T rai ner W ortha m & Co. , Inc. , 610 F . 3d 1169 (9th C i r. 20 10 ) ( re m andi ng for f urther c on si dera t i on i n l i gh tof Mer ck . ) W e r e q u e s te da n dr e c e iv e df u rth e rb r ie f

in g f r o m th e p a rtie s . W e a g r e e w ith the de c i s i on i n B e tzthatthe bestcourse i s t o rem and t o the di stri ctcourtfor f urther pr oc e e di ngs . I n B et

z, the c ourtout l i ne d anum be rof r e a s ons w hythi s s houl d be th e p r e f e rr e dp r o c e d u r e . Se e B e tz , 610 F . 3d 1169. W e the r e f

or e va c a t e the di s tr i c tc ourt ’ s pr i orj udgm e nta nd r e m a nd t o the di s tr i c tc ourtf

orf urthe rpr oc e e di ngs c ons i s t e ntw i th Mer ck a ndB et z.4

VA C A TED A N D R EM A N D ED .