Source: http://openjurist.org/410/f3d/1275
Timestamp: 2013-12-07 18:46:12
Document Index: 47639013

Matched Legal Cases: ['§ 1658', '§ 78', '§ 78', '§ 1658', '§ 908', '§ 901', '§ 1658', '§ 1658', '§ 1658', '§ 1658', '§ 1658', '§ 78']

410 F3d 1275 Tello v. Dean Witter Reynolds Inc Dw | OpenJurist
410 F. 3d 1275 - Tello v. Dean Witter Reynolds Inc Dw	Home410 f3d 1275 tello v. dean witter reynolds inc dw
410 F3d 1275 Tello v. Dean Witter Reynolds Inc Dw 410 F.3d 1275
Mark TELLO, on behalf of himself and all others similarly situated, Plaintiff-Appellee,v.DEAN WITTER REYNOLDS, INC., n.k.a. Morgan Stanley DW, Inc., Paul Grande, Defendants-Appellants,Mark Rodgers, Defendant.
No. 03-12545.
Nevertheless, the district judge also decided that "[t]he controlling question of law is whether time-barred claims are revived by the Sarbanes-Oxley Act," and that legal interpretation of the new statutory language warranted an interlocutory appeal to our court. Id. at 8. Consequently, the judge permitted Dean Witter to seek appellate review in this court. We granted Dean Witter's petition for interlocutory appeal. Prior to addressing the statute-of-limitations issue presented, we explain the necessity for additional factfinding by the district court.
"We review the district court's interpretation and application of statutes of limitations de novo." United States v. Clarke, 312 F.3d 1343, 1345 n. 1 (11th Cir.2002) (per curiam). Because we have been asked to decide whether the revised statute of limitations under the SOA revives time-barred claims, we must interpret § 1658(b). With securities laws, "as in other contexts, the starting point in construing a statute is the language of the statute itself." Randall v. Loftsgaarden, 478 U.S. 647, 656, 106 S.Ct. 3143, 3149, 92 L.Ed.2d 525 (1986). The "cardinal canon" of statutory interpretation is "that courts must presume that a legislature says in a statute what it means and means in a statute what it says there." Connecticut Nat'l Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 1149, 117 L.Ed.2d 391 (1992). In addition to the "particular statutory language at issue," federal courts also must consider "the language and design of the statute as a whole" to determine "the plain meaning of the statute." K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291, 108 S.Ct. 1811, 1818, 100 L.Ed.2d 313 (1988).
At the threshold point of our analysis, the statutory language, there is a telling wording distinction between the formerly used statute of limitations and the statute of limitations under the SOA. Prior to the effective date of the SOA statute of limitations, July 30, 2002, the formerly used statute of limitations for federal securities claims under Section 10(b) and Rule 10b-5 of the Exchange Act provides that "[n]o action shall be maintained to enforce any liability created under this section, unless brought within one year after the discovery of the facts constituting the violation and within three years after such violation." 15 U.S.C. § 78i(e) (emphasis added). 15 U.S.C. § 78i(e); Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 364 & n. 9, 111 S.Ct. 2773, 2782 & n. 9, 115 L.Ed.2d 321 (1991); Theoharous v. Fong, 256 F.3d 1219, 1228 (11th Cir.2001). This statute of limitations is stated conjunctively. Under the plain terms of that statute of limitations, the complaint must be filed within one year from discovery of the facts that caused the securities violation and within three years of that violation. Because the class-action complaint, filed on November 15, 2002, alleges applicable securities fraud violations that occurred from January through August 19, 1998, the two-part conjunctive test for that statute of limitations was not met, and the class action would have been untimely under the formerly applicable statute. This would be true even if discovery of the facts evidencing the securities violation occurred outside the three-year period from occurrence of the violative conduct.
[A] private right of action that involves a claim of fraud, deceit, manipulation, or contrivance in contravention of a regulatory requirement concerning the securities laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), may be brought not later than the earlier of —
Regarding the plain meaning of statutes of limitation, the Supreme Court has held analogously that an EEOC petitioner was able to take advantage of Congress's enactment of an amended statute of limitations that extended the time within which to file suit, "[s]ince Congress also applied the enlarged limitations period to charges, whether or not untimely on" the enactment date. International Union of Elec., Radio & Machine Workers v. Robbins & Myers, Inc., 429 U.S. 229, 242, 97 S.Ct. 441, 450, 50 L.Ed.2d 427 (1976). The Court reasoned that application of the statute to all cases filed after enactment, even if the plaintiff had not filed a complaint before enactment and, consequently, would have been barred under the old limitations period, still would have permitted the plaintiff to file a complaint after enactment of the new limitations period. Since the new statute of limitations authorized filing of a complaint not previously filed to revive a barred claim, the Court did not interpret "pending" to mean only claims timely when filed; instead, it interpreted the statute literally irrespective of whether barred claims would be revived and the absence of specific revival language in the new statute.6 Id. at 242-43, 97 S.Ct. at 450.
In a 1984 amended statute of limitations to the Longshore and Harbor Workers' Compensation Act ("LHWCA"), similarly worded to § 1658(b), our circuit concluded that the respondent, who had worked in shipyards from 1941 to 1969, but who did not have his hearing loss conclusively diagnosed as resulting from that employment until 1986, when the former statute of limitations would have barred his claim, was entitled to file his claim and recover under the amended statute of limitations. Alabama Dry Dock & Shipbuilding Corp. v. Sowell, 933 F.2d 1561 (11th Cir.1991), overruled on other grounds, Bath Iron Works Corp. v. Director, Office of Workers' Comp. Programs, 506 U.S. 153, 113 S.Ct. 692, 121 L.Ed.2d 619 (1993). The amended statute stated that "[t]he time for filing ... a claim for compensation ... shall not begin to run in connection with any claim for loss of hearing ... until the employee has received an audiogram, with the accompanying report thereon, which indicates that the employee has suffered a loss of hearing." Id. at 1563 (quoting 33 U.S.C. § 908(c)(13)(D) (1986)). Congress provided that the amended statute, which was effective on enactment, September 28, 1984, "shall apply both with respect to claims filed after such date and to claims pending on such date." Id. at 1563-64 (quoting 33 U.S.C. § 901 note). We determined that Alabama Dry Dock's argument that the respondent's claim "was time-barred years before those amendments were even a gleam in Congress' eye," was an "interpretation ... at odds with the plain terms of the 1984 amendments." Id. at 1564.
We also noted that our predecessor circuit made a similar decision concerning the 1972 amendments to the LHWCA. Id. at 1565 (citing Cooper Stevedoring v. Washington, 556 F.2d 268, 272-73 (5th Cir.1977)). Although the injury had occurred three months before enactment of the 1972 amendments, the former Fifth Circuit determined "that retroactive application of the 1972 amendments was `in accord with the established principle ... that "statutes of limitation go to matters of remedy, not to destruction of fundamental rights."'" Id. (quoting Cooper, 556 F.2d at 273 (quoting Chase Secs. Corp. v. Donaldson, 325 U.S. 304, 314, 65 S.Ct. 1137, 1142, 89 L.Ed. 1628 (1945))). Given the resolution in our circuit precedent addressing the statute of limitations in the 1972 amendment to the LHWCA, a remedial statute, we determined that a plain, literal interpretation of the subsequent 1984 amendments yielded the same conclusion that previously time-barred claims were intended by Congress to be appropriately filed under the extended statute of limitations:
The Supreme Court has endorsed this facial analysis of a statute when the temporal effect is obvious from the statutory language, which obviates the need to employ the presumption against the retroactive effect of a new or amended statute as explained in Landgraf v. USI Film Products, 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994): when "the temporal effect of a statute is manifest on its face, `there is no need to resort to judicial default rules,' and inquiry is at an end." Lockheed Corp. v. Spink, 517 U.S. 882, 896, 116 S.Ct. 1783, 1792, 135 L.Ed.2d 153 (1996) (quoting Landgraf, 511 U.S. at 280, 114 S.Ct. at 1505). Congress may prescribe the temporal reach of a statute by stating that it applies to pre-enactment conduct, the first step in the Landgraf analysis, or a statute may be silent regarding temporal reach, in which case courts apply the judicial presumption against retroactivity.7 This presumption and analysis, however, are unwarranted when Congress states its unambiguous intention that the statute apply retroactively to pre-enactment conduct, in language comparable to § 1658(b), that the new or amended statute applies to proceedings commenced on or after enactment. See Landgraf, 511 U.S. at 259-60, 114 S.Ct. at 1494 (stating that, if had Congress intended retroactive application, then "it surely would have used language comparable to . . . `shall apply to all proceedings pending on or commenced after the date of enactment'") (citation omitted); accord INS v. St. Cyr, 533 U.S. 289, 318-19 & n. 43, 121 S.Ct. 2271, 2289-90 & n. 43, 150 L.Ed.2d 347 (2001) (collecting examples of unambiguous temporal statutory language providing that the statute applies to actions filed "on or after" the date of enactment, which includes violative conduct that occurred prior to the effective date of the statute); Martin v. Hadix, 527 U.S. 343, 354, 119 S.Ct. 1998, 2004, 144 L.Ed.2d 347 (1999) (stating that "`new provisions shall apply to all proceedings pending on or commenced after the date of enactment,'" referenced in Landgraf, "unambiguously addresses the temporal reach of the statute" (citation omitted)); Lindh v. Murphy, 521 U.S. 320, 329 n. 4, 117 S.Ct. 2059, 2064 n. 4, 138 L.Ed.2d 481 (1997) (recognizing from Landgraf that statutory language such as, "`[This Act] shall apply to all proceedings pending on or commenced after the date of enactment of this Act,'" "might possibly have qualified as a clear statement for retroactive effect" (quoting Landgraf, 511 U.S. at 260, 114 S.Ct. at 1494)); Rivers v. Roadway Express, Inc., 511 U.S. 298, 307-08, 114 S.Ct. 1510, 1517, 128 L.Ed.2d 274 (1994) (noting that the subject statute omitted a provision in the bill that the amendment "`shall apply to all proceedings pending on or commenced after'" a fixed date and describing the bill as containing "express retroactivity provisions"). Since § 1658(b) applies to actions filed on or after its enactment, it "would necessarily ... relate[] to conduct that took place at an earlier date," which is pre-enactment securities fraud. Republic of Austria v. Altmann, 541 U.S. 677, 124 S.Ct. 2240, 2253 n. 18, 159 L.Ed.2d 1 (2004). From analogous Supreme Court and circuit precedent, the amended, lengthened limitations period of § 1658(b) applies to a case that was "commenced on or after the date of enactment" and this temporal reach inherently includes securities fraud that occurred prior to the date of enactment.8 28 U.S.C. § 1658(b) (Historical & Statutory Notes). Accordingly, § 1658(b) is applicable to the alleged fraudulent securities conduct in this case, provided inquiry notice was not sufficiently established to enable the plaintiff class to file this class action prior to issuance of the SEC Order.
C. Inquiry Notice
There is no dispute that this class action was filed on November 15, 2002, after the effective date of the SOA. What is in dispute is whether the class was sufficiently on inquiry notice before the effective date of the SOA to have been governed by the former, one-year/three-year statutory scheme for filing a securities fraud action, such that this securities class-action is time-barred. See 15 U.S.C. § 78i(e). In our circui