Opinion ID: 397155
Heading Depth: 2
Heading Rank: 3

Heading: The Section 11 and Section 12(2) Claims.

Text: 9 Sections 11 and 12(2) of the 1933 Act, 15 U.S.C.A. §§ 77k and 77l (2) (a portion of Count III, Count IV and Count V), however, are governed by the limitation period contained in § 13 of the 1933 Act, 15 U.S.C.A. § 77m, which provides: 10 No action shall be maintained to enforce any liability created under § 77k or § 77l (2) of this title unless brought within one year after the discovery of the untrue statement or the omission, or after such discovery should have been made by the exercise of reasonable diligence, .... In no event shall any such action be brought to enforce a liability created under § 77k ... of this title more than three years after the security was bona fide offered to the public, or under § 77l (2) of this title more than three years after the sale. 11 The district court held that the passage of more than three years between the alleged wrongful act and the commencing of this action is an absolute bar to the claims under §§ 11 and 12(2), i. e., the normal rules of tolling do not apply after three years. Appellant does not seriously contest this ruling and it is consistent with a view of the majority of the courts to consider the question. See Brown v. Producers Livestock Loan Co., 469 F.Supp. 27 (D.Utah 1978); Turner v. First Wisconsin Mortgage Trust, 454 F.Supp. 899 (E.D.Wis.1978); Cowsar v. Regional Recreations, Inc., 65 F.R.D. 394 (M.D.La.1974). The Tenth Circuit has interpreted the almost identical language in the Interstate Land Sales Full Disclosure Act to constitute an absolute bar. Aldrich v. McCulloch Properties, Inc., 627 F.2d at 1042-43. But see In re Home-Stake Production Co. Securities Litigation, 76 F.R.D. 337 (N.D.Okl.1975). The court in Turner v. First Wisconsin Mortgage Trust, supra, rejected the plaintiff's argument that the three-year period could be tolled by the defendant's concealment of the claim. Otherwise (§ 13) would create a limitation period for all suits of one year from the time discovery of the untrue statements or omissions should have been made, and the three-year provision would serve no purpose at all. 454 F.Supp. at 911. We find this reasoning convincing. We hold that the normal tolling rules are not applicable to toll the three-year period. Accordingly, we hold that appellant's claims under § 11 and § 12(2) are absolutely barred and affirm the district court's dismissal of those claims. 12