Opinion ID: 1921985
Heading Depth: 1
Heading Rank: 2

Heading: The Common-Law Claims

Text: In his complaint, plaintiff also asserted common-law claims for breach of fiduciary duty, negligence, unsuitability, and misrepresentation. The unsuitability claim later was withdrawn. The motion justice concluded that the remaining claims were essentially subsumed by the state statutory claim and that the statute of limitations contained within § 7-11-606 therefore applies to those claims as well, rather than the general ten-year statute of limitations contained within § 9-1-13. [3] The justice stated that: [I]f we analyze what's at the heart of the common law claims and compare that to what is at the heart of the state securities claim, then it doesn't make sense to say that the defendant is protected against the same allegations on one hand, but still has exposure for the  what essentially is the  exact same cause of action on the other. On appeal, plaintiff argues that the motion justice erred in reaching this conclusion. The plaintiff argues that § 9-1-13(a) clearly applies [e]xcept as otherwise specially provided   . The plaintiff argues that § 7-11-606 specifically limits its application to claims arising under § 7-11-605 and that ittherefore does not apply to common-law claims. The plaintiff also argues that the motion justice erred in interpreting Walden III, Inc. v. State, 442 F. Supp. 1168, 1172 (D.R.I.1977) (applying a single statute of limitations, selected on the basis of the substance of the grievance, to a variety of different state and federal claims asserted in one action). With respect to this argument, it is important to note that the motion justice placed no reliance on Walden III. Although she concluded that the reasoning contained within Walden III was helpful in analyzing the instant case, she expressly found Walden III to be inapplicable to the case at bar. In any event, we respectfully disagree with the motion justice in the determination that the Rhode Island Uniform Securities Act was intended to supersede or replace common-law actions that might rely upon similar facts in seeking compensation for tortious acts committed by a broker or investment advisor. Section 7-11-608(b) specifically provides: The rights and remedies provided by this chapter are in addition to any other rights or remedies that exist at law or in equity, but this chapter does not create any claim for relief not specified in this part. (Emphasis added.) The foregoing language indicates that the legislature did not intend the provisions of chapter 11 of title 7 to subsume or replace common-law actions for negligence or misrepresentation or breach of fiduciary duty that existed at law or in equity before this statute was enacted in 1990. Consequently, the common-law remedies that were sought by plaintiff in this case and specifically preserved from preemption by § 7-11-608 would be governed by the general statute of limitations claimed by plaintiff to be ten years pursuant to § 9-1-13(a) of the General Laws. The plaintiff contends that this ten-year statute of limitations would be applicable to the common-law claims for breach of fiduciary duty, negligence, and misrepresentation. The defendants did argue before the Superior Court that even if § 7-11-606 did not apply to the common-law claims, the statute of limitations governing the federal statutory claim would have such an effect. We see no evidence in the 1933 Act that Congress specifically intended to preempt such state common-law claims that may have existed before it was enacted. Federal preemption should be construed to be intended only in the event that Congress has specifically so stated or in the event that such preemptive intent is contained in the statute by necessary implication. See, e.g., Zschernig v. Miller, 389 U.S. 429, 88 S.Ct. 664, 19 L.Ed.2d 683 (1968); Pennsylvania v. Nelson, 350 U.S. 497, 76 S.Ct. 477, 100 L.Ed. 640 (1956); Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947); Hines v. Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581 (1941). We are of the opinion that neither element establishing federal preemption may be found in the Securities Act of 1933. We are of the opinion that these statutes were designed to define and strengthen the duties of brokers and investment advisers rather than to preempt preexisting common-law claims. One who seeks a remedy under common-law tort claims will not have the benefit of the liberal interpretation given by the federal and state statutes that has relieved some of the strictures of the common law. Consequently, we believe that neither the federal statute nor the state statute intended that their significantly shortened periods of limitations would apply to actions brought on such common-law claims. The defendants contend that plaintiff's common-law claims are barred by the economic-loss doctrine. This doctrine would make tort claims unavailable in circumstances in which the parties were in a contractual setting and the injuries were purely economic. The Superior Court did not consider this argument because the motion justice dismissed the claims on statute-of-limitations grounds. Since this issue was not decided by the motion justice, it is not appropriate for our consideration at this time. For the reasons stated, the plaintiff's appeal is denied in part and sustained in part. The judgment of the Superior Court is affirmed insofar as it dismissed the federal and state statutory claims brought against the defendants, but is reversed insofar as it dismissed the common-law claims set forth in the plaintiff's amended complaint. The papers in the case may be remanded to the Superior Court for further proceedings relating to the common-law claims consistent with this opinion.