Opinion ID: 77735
Heading Depth: 2
Heading Rank: 4

Heading: Timeliness of Filing Suit

Text: After requesting the district judge to establish the cause of inquiry notice and when it occurred, we next asked him to determine when the plaintiff class would have acquired sufficient information to file suit. Tello, 410 F.3d at 1294. Dean Witter has produced a plethora of articles about the plummet in the price of e-Net stock that were available from 1998 through 2000 to interested investors. The Washington Post article notes that 900 postings regarding the sharp drop in e-Net stock value could have been located through the Internet on Yahoo alone. Significantly, Tello testified that he and Roberts knew from the Washington Post article that Dean Witter's short squeeze as to e-Net stock was the reason for the drastic drop in its value. The Washington Post article also referenced other articles, such as the Internet article on TheStreet.com, which discussed the e-Net securities fraud in more detail. Prior to 2000, there w[ere] 13 lawsuits, arbitrations, filed against Dean Witter and Mr. Rodgers alleging fraud, unauthorized trading, and violations of the securities laws. Second Supp. R. at 32. These actions regarding e-Net stock were proceeding in 1998 and 1999. Yet, Roberts waited until November 15, 2002, before filing this class-action case. To state a claim for relief under federal notice pleading, a complaint need contain only a short and plain statement of the basis for relief. Fed.R.Civ.P. 8(a)(2). Fraud must be pled with particularity. Fed.R.Civ.P. 9(b); see also Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(b)(2). The application of Rule 9(b), however, `must not abrogate the concept of notice pleading.' Ziemba v. Cascade Int'l, Inc., 256 F.3d 1194, 1202 (11th Cir. 2001) (quoting Durham v. Business Mgmt. Assocs., 847 F.2d 1505, 1511 (11th Cir. 1988)); see Brooks v. Blue Cross & Blue Shield of Florida, Inc., 116 F.3d 1364, 1371 (11th Cir. 1997) (per curiam) (recognizing that `Rule 9(b) must be read in conjunction with Rule 8(a)' (citations omitted)). Rule 9(b) is satisfied if the complaint set forth (1) precisely what statements were made in what documents or oral representations or what omissions were made, and (2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) same, and (3) the content of such statements and the manner in which they misled the plaintiff, and (4) what the defendants obtained as a consequence of the fraud. Ziemba, 256 F.3d at 1202 (quoting Brooks, 116 F.3d at 1371). While [a]llegations of date, time or place satisfy the Rule 9(b) requirement that the circumstances of the alleged fraud must be pleaded with particularity, we have acknowledged that alternative means are also available to satisfy the rule in substantiating fraud allegations. Durham, 847 F.2d at 1511. Roberts, whose knowledge inures to Tello, who replaced him as class representative, could have acquired sufficient information to have met the requirements of Rule 8(a)(2) and Rule 9(b) to have filed the class-action complaint within a year, assessed from inquiry notice in September 1998, after the Washington Post article was published. Other similar actions regarding Dean Witter's conduct with respect to e-Net stock had been based on sufficient information to proceed before 2000, and Ratkovich's case concerning his e-Net stock was filed on May 16, 1999, by the same counsel representing Tello in this case. [16] Moreover, Roberts and Tello, because of their friendship with Ratkovich, the second largest shareholder of e-Net stock, had specific knowledge through him and his similar e-Net lawsuit regarding Dean Witter's short squeeze as to e-Net stock. The former statute of limitations for federal securities actions provided that a case must be brought within one year after discovery of the facts constituting the violation and within three years of the violation. 15 U.S.C. § 78i(e). The undisputed time period for the securities fraud at issue in this case was from January 1, 1998, until August 19, 1998. Following the Washington Post article about e-Net stock in September 1998, Roberts had sufficient time within a year, or by September 1999, to have filed this case on behalf of the plaintiff class. With all of the information that was available as to e-Net stock, which was imputed to him, whether he read it or not, he had sufficient knowledge of Dean Witter's alleged securities fraud to meet the requirements of Rule 8(a)(2) and Rule 9(b). With regard to time needed to file this case, we asked the district judge: Specifically, without the SEC Order, could plaintiffs have been alerted to Dean Witter's fraudulent conduct concerning e-Net stock independently to enable them to file suit before issuance of the SEC order evidencing securities fraud by Dean Witter regarding plaintiffs' investments? Tello, 410 F.3d at 1294. Had the judge reviewed Tello's deposition, and thereby known that the Washington Post article provided inquiry notice, the answer would have been Yes, as we have explained based on the evidence produced on limited remand. Similarly, review of the evidence produced on limited remand, particularly Tello's deposition, would have shown that the class-action complaint could have been filed within the former statute of limitations period, after inquiry notice had been established by the end of September 1998.