Opinion ID: 791218
Heading Depth: 4
Heading Rank: 2

Heading: 5 years after such violation.

Text: 42 Id. § 804(a). This new statute of limitations period appl[ies] to all proceedings ... that are commenced on or after the date of enactment of this Act, which was July 30, 2002. Id. § 804(b). 43 Livid filed its complaint on August 1, 2002, two days after the SOA's effective date. This fact alone does not bring the complaint within the SOA's longer statute of limitations period as the SOA also contains a statement warning that the new limitations period should not be interpreted as creat[ing] a new, private right of action. Id. § 804(c). The Defendants argue that when Livid filed its complaint, the pre-SOA limitations period had already run. If this were true, in order to uphold the complaint, we would have to find that Congress clearly intended the SOA's new statute of limitations to revive previously expired claims. Because we cannot conclude that the pre-SOA statute of limitations had run when Livid filed its complaint, we refuse to decide, based on this record, whether the new statute of limitations period revives dead claims. 44 According to the pre-SOA standard, Livid's claim is time-barred if Livid discovered the facts constituting the violation it alleges a year before filing its complaint. Lampf, 501 U.S. at 364, 111 S.Ct. 2773. The Defendants argue that this statute of limitations began to run over two years before Livid filed its complaint when, on March 19, 2000, three PCI employees filed an involuntary bankruptcy petition against PCI, which put Livid on inquiry notice of the alleged fraud. This court has considered, but not made a final determination on whether actual or inquiry notice of the alleged fraud triggers the running of Rule 10b-5's statute of limitations. Berry v. Valence Technology, Inc., 175 F.3d 699, 704 (9th Cir.1999). In Berry, the court declined to adopt either an inquiry or actual notice standard, but noted that [i]f we were to adopt inquiry notice, we would agree with the ... formulation of ... most circuits which apply an inquiry notice standard coupled with some form of reasonable diligence requirement. Id. (citation omitted). Since Berry, this court has left the notice standard unresolved and applies both the actual notice and inquiry-plus-due diligence standards in applicable cases. 45 The complaint alleges that Livid did not have actual notice of the alleged fraud until late September 2001 when it received a report from the independent auditor for the bankruptcy proceeding. If actual notice is required to trigger the statute of limitations, we cannot hold, as a matter of law, that Livid filed its complaint more than one year after it discovered the alleged fraud. It is not evident, based on the allegations in the complaint, whether Livid timely filed this action if inquiry notice triggers the running of the statute of limitations. 46 We cannot decide on this record whether under this circuit's modified inquiry notice standard Livid should have been aware of the fraud one year before it filed its complaint. This court has held that financial problems alone are generally insufficient to suggest fraud. Mosesian v. Peat, Marwick, Mitchell & Co., 727 F.2d 873, 878 (9th Cir.1984). Therefore, the filing of the bankruptcy petition alone seems unlikely to satisfy the inquiry-plus-due diligence standard, especially since we have held that [t]he question of what a reasonably prudent investor should have known is particularly suited to a jury determination, id. at 879. Livid alleges that it first learned of the bankruptcy proceedings against PCI on May 25, 2001, which caused it to evaluate the filings submitted in this proceeding. This investigation revealed a verified pleading affirmatively representing that the $25 million stock sale had been received by PCI. Therefore, we cannot decide, as a matter of law, whether Livid should have been on notice of the alleged fraud one year before the complaint was filed.