Opinion ID: 610593
Heading Depth: 2
Heading Rank: 2

Heading: simmons, et al. v. tgx corp., et al.

Text: 21 In 1987, TGX Corporation sued Gaylon Simmons 2 over a $21 million stock purchase contract which the parties executed in November 1986, and Simmons filed a counterclaim against TGX under § 10(b). TGX filed for bankruptcy protection in 1990, staying the counterclaim. Simmons then filed a separate § 10(b) suit in March 1990 against attorneys, accountants, and directors (collectively TGX Defendants) 3 who facilitated the stock purchase. 22 Simmons sued the TGX Defendants in the United States District Court for the Eastern District of Louisiana. 4 The parties disputed whether Simmons met Louisiana's two-year prescriptive period for securities fraud, which this court has held applicable to § 10(b) claims. Jensen v. Snellings, 841 F.2d 600, 606 (5th Cir.1988). The Supreme Court rendered Lampf and Beam before the district court ruled on the parties' limitation dispute. 23 The TGX Defendants informed the district court that Simmons sued them in March 1990, and his complaint alleges November 1986 misdeeds. They argued that these facts entitled them to dismissal under Lampf's 1-and-3 rule. Simmons did not dispute the effect of Lampf, and the district court directed the TGX Defendants to draft a judgment and order. That document recited: 24 all of the federal claims asserted are time-barred, and the Defendants are entitled to judgment on those claims as a matter of law; and [the court finds that] final judgment should be entered.... 25 [P]laintiffs' claims ... under ... the Securities Exchange Act of 1934 are hereby dismissed with prejudice. 26 Simmons asked the district court to delete with prejudice from the judgment to avoid any preclusive effect, and the court obliged before signing it in August 1991. Simmons did not appeal this judgment. 27 Simmons sought the deletion from the August 1991 judgment because he thought that he could avoid Lampf by adding the TGX Defendants as parties to the 1987 counterclaim against TGX, and he did not want the dismissal in the March 1990 suit to preclude him from doing so. Simmons's idea ultimately proved unsuccessful, 5 and the district court entered another judgment dismissing Simmons's § 10(b) claims against the TGX Defendants in October 1991. Simmons did not appeal this October 1991 judgment. 28 With renewed hope from § 27A(b), Simmons filed a motion to reinstate the March 1990 suit in January 1992. The parties disputed both the applicability and constitutionality of § 27A(b). In March 1992, the district court held: 1) the court had previously dismissed Simmons's March 1990 § 10(b) suit as time barred within the meaning of § 27A(b) despite the fact that the court dismissed the suit without prejudice in August 1991; and 2) Simmons timely filed his § 10(b) claims under Louisiana's two-year prescription period and Jensen; but 3) § 27A contravenes the constitutionally-mandated retroactivity of new legal rules recognized in Beam. TGX Corp. v. Simmons, 786 F.Supp. 587 (E.D.La.1992). 29 In April 1992, Simmons asked for a new trial on his reinstatement motion. In May 1992, the district court denied Simmons's motion for a new trial after holding that, in addition to Beam's implications, § 27A(b) violates due process principles by upsetting final judgments. Simmons appeals from the district court's denials of his motion to reinstate and his new-trial motion. The TGX Defendants cross-appeal the district court's ruling that Simmons's March 1990 suit falls within the scope of § 27A(b) even though the district court dismissed that suit without prejudice in August 1991. The United States intervenes to defend the constitutionality of § 27A(b).