Source: http://supreme.justia.com/cases/federal/us/559/08-905/opinion.html
Timestamp: 2013-05-26 08:26:58
Document Index: 233807748

Matched Legal Cases: ['§1658', '§10', '§78', '§10', '§77', '§77', '§78', '§77']

Merck & Co. v. Reynolds - 08-905 (2010) :: Justia US Supreme Court Center
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Merck & Co. v. Reynolds - 08-905 (2010)
Like the parties, we believe that Congress intended courts to interpret the word “discovery” in §1658(b)(1) similarly. Before Congress enacted that statute, this Court, having found in the federal securities laws the existence of an implied private §10(b) action, determined its governing limitations period by looking to other limitations periods in the federal securities laws. Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U. S. 350 (1991). Noting the existence of various formulations “differ[ing] slightly in terminology,” the Court chose the language in 15 U. S. C. §78i(e), the statutory provision that governs securities price manipulation claims. 501 U. S., at 364, n. 9. And in doing so, the Court said that private §10(b) actions “must be commenced within one year after the discovery of the facts constituting the violation and within three years after such violation.” Id., at 364 (emphasis added). (The Court listed among the various formulations the one in 15 U. S. C. §77m, on which the concurrence relies. See post, at 2–4 (Scalia, J., concurring in part and concurring in judgment); Lampf, supra, at 360, and n. 7 (quoting §77m).) Subsequently, every Court of Appeals to decide the matter held that “discovery of the facts constituting the violation” occurs not only once a plaintiff actually discovers the facts, but also when a hypothetical reasonably diligent plaintiff would have discovered them. See, e.g., Law v. Medco Research, Inc., 113 F. 3d 781, 785–786 (CA7 1997); Dodds v. Cigna Securities, Inc., 12 F. 3d 346, 350, 353 (CA2 1993); see In re NAHC, Inc. Securities Litigation, 306 F. 3d 1314, 1325, n. 4 (CA3 2002) (collecting cases). Some of those courts noted that other limitations provisions in the federal securities laws explicitly provide that the period begins to run “ ‘after the discovery of the untrue statement … or after such discovery should have been made by [the] exercise of reasonable diligence,’ ” whereas the formulation adopted by the Court in Lampf from 15 U. S. C. §78i(e) does not. Tregenza, supra, at 721 (quoting §77m; emphasis added in Tregenza); see Lampf, supra, at 364, n. 9. But, courts reasoned, because the term “discovery” in respect to statutes of limitations for fraud has long been understood to include discoveries a reasonably diligent plaintiff would make, the omission of an explicit provision to that effect did not matter. Tregenza, supra, at 721; accord, New England Health Care, 336 F. 3d, at 499–500.