Opinion ID: 2718900
Heading Depth: 4
Heading Rank: 2

Heading: State securities laws

Text: The Kansas Uniform Securities Act makes a securities seller liable to a purchaser if the seller sells a security “by means of an untrue statement of a material fact or an omission.” K.S.A. § 17-12a509(b). Kansas also sets two deadlines on state securities claims: a two-year limitations period from the date the claim accrues and a five-year deadline from the date of the security’s issuance or sale. Id. § 17-12a509(j). The California Corporate Securities Law of 1968 similarly makes a securities seller “liable to the person who purchases a security,” Cal. Corp. Code § 25501, when the 3 These provisions are codified at 15 U.S.C. §§ 77k, 77l(a)(1), and 77l(a)(2). We refer to the claims under these provisions as “Section 11” and “Section 12(a)(2)” claims. 4 We refer to this time-limit provision as “Section 13.” -6- security has been sold or offered “by means of any written or oral communication which includes an untrue statement of a material fact” or is “misleading,” id. § 25401. California’s deadlines for securities claims are similar to those in Kansas: two years from a plaintiff’s discovery “of the facts constituting the violation,” or five years from “the act or transaction constituting the violation.” Id. § 25506(b). 3. Time limits specific to NCUA: the Extender Statute The Federal Credit Union Act (“FCUA”), enacted in 1934, governs the regulation of federally chartered credit unions. It established NCUA as an independent agency charged with regulating federally chartered credit unions and set the terms of federal insurance coverage for credit union accounts. If NCUA finds that a credit union is insolvent, or in some circumstances if it is undercapitalized, FCUA directs NCUA to place the credit union in conservatorship or liquidation and appoint itself as conservator or liquidating agent. 12 U.S.C. §§ 1787(a)(1)(A), (a)(3)(A). As conservator or liquidating agent, the Board steps into the shoes of the credit union and succeeds to “all rights, titles, powers, and privileges of the credit union.” Id. § 1787(b)(2)(A)(i). In the wake of the savings and loan crisis of the 1980s, Congress passed the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”). FIRREA’s purpose is to strengthen government regulation of federally chartered or insured financial organizations. See United States v. Winstar Corp., 518 U.S. 839, 844, 856 (1996). -7- FIRREA contains provisions often referred to as “extender statutes,” which extend the time period for a government regulator to bring “any action” on behalf of a failed financial organization. FIRREA has two such provisions with identical language. One applies to NCUA, 12 U.S.C. § 1787(b)(14), and the other to the Federal Deposit Insurance Corporation (“FDIC”), NCUA’s counterpart that regulates banks, id. § 1821(d)(14). See O’Melveny & Myers v. FDIC, 512 U.S. 79, 86 (1994) (describing the FDIC extender statute).5 The NCUA Extender Statute is titled “Statute of limitations for actions brought by conservator or liquidating agent.” 12 U.S.C. § 1787(b)(14). It reads: (A) In general Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the Board6 as conservator or liquidating agent shall be— (i) in the case of any contract claim, the longer of— (I) the 6-year period beginning on the date the claim accrues; or (II) the period applicable under State law; and (ii) in the case of any tort claim, the longer of— (I) the 3-year period beginning on the date the claim accrues; or (II) the period applicable under State law. 5 We discuss multiple extender statutes in this opinion, referring to each according to the agency to which it applies, e.g., “FDIC extender statute.” We refer to the extender statute that applies to the NCUA as the “NCUA Extender Statute” or simply the “Extender Statute.” 6 Here, “the Board” refers to the NCUA Board. 12 U.S.C. § 1752(4). -8- (B) Determination of the date on which a claim accrues For purposes of subparagraph (A), the date on which the statute of limitation begins to run on any claim described in such subparagraph shall be the later of— (i) the date of the appointment of the Board as conservator or liquidating agent; or (ii) the date on which the cause of action accrues. Before FIRREA, Securities Act claims brought by the federal government were subject to the limitations provision of 28 U.S.C. § 2415 (“Section 2415”). See, e.g., FDIC v. Bachman, 894 F.2d 1233, 1237 (10th Cir. 1990). Section 2415 is the default federal statute of limitations for all actions brought by the federal government when no other statute of limitations applies. Id. It reads, in relevant part: § 2415. Time for commencing actions brought by the United States (a) . . . [E]xcept as otherwise provided by Congress, every action for money damages brought by the United States or an officer or agency thereof which is founded upon any contract express or implied in law or fact, shall be barred unless the complaint is filed within six years after the right of action accrues . . . . (b) . . . [E]xcept as otherwise provided by Congress, every action for money damages brought by the United States or an officer or agency thereof which is founded upon a tort shall be barred unless the complaint is filed within three years after the right of action first accrues . . . . Congress modeled the two FIRREA extender statutes after Section 2415. Early drafts of FIRREA legislation expressly incorporated “the [limitations] period provided for in section[] 2415.” S. 774, 101st Cong. § 212 (as passed by Senate, Apr. 19, 1989) (early version of 12 U.S.C. § 1821(d)(14)), available at 1989 WL 1178231, at . Later -9- drafts of FIRREA featured separate limitations provisions, which were eventually enacted in their current form, and we refer to them as the extender statutes. In the FIRREA extender statutes, Congress maintained the basic structure of Section 2415, with a three-year limitations period for tort claims and a six-year period for contract claims. But Congress omitted some portions of Section 2415 from the FIRREA extender statutes. In particular, the phrase “except as otherwise provided by Congress,” which appears in Section 2415, does not appear in the extender statutes. Compare 12 U.S.C. §§ 1787(b)(14), 1821(d)(14), with 28 U.S.C. § 2415(a)-(b); see also FDIC v. Thayer Ins. Agency, Inc., 780 F.Supp. 745, 748 (D. Kan. 1991) (recognizing the connection between Section 2415 and the FIRREA extender statutes and describing the latter as “an amended version of the limitations period found in 28 U.S.C. § 2415[].”). In addition to FIRREA’s two extender statutes, several other extender statutes have been enacted. In 2008, Congress passed the Housing and Economic Recovery Act of 2008 (“HERA”), which contained an extender statute for any action brought by the Federal Housing Finance Administration (“FHFA”) on behalf of a failed governmentsponsored entity, such as Fannie Mae or Freddie Mac. See 12 U.S.C. § 4617(b)(12). Another extender statute appears in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”). 42 U.S.C. § 9658. This limitations provision, often referred to as “CERCLA § 309,” establishes a federally mandated commencement date for state-law limitations periods on certain claims and provides a minimum time frame for plaintiffs to bring claims regardless of state law. - 10 -