Opinion ID: 2743434
Heading Depth: 3
Heading Rank: 5

Heading: Count 10: punitive damages;

Text: 6. Count 11: rescission of the sale of the Aminosterol Assets to Ohr; and 7. Count 12: rescission of the sale of Pexiganan to Dipexium. Several of those counts also charge other defendants with aiding and abetting. All of the defendants except SCO moved to dismiss on statute of limitations grounds. Schmidt agreed to dismiss counts 4-8 without prejudice before the District Court rendered its decision. The District Court dismissed all counts of the complaint with prejudice. In relevant part, it held that Schmidt filed the breach of fiduciary duty and corporate waste claims after the applicable two-year statute of limitations had expired, and that the discovery rule did not save the claims. Specifically, the District Court held that Schmidt had “not met his burden of demonstrating that the discovery rule should apply here.” App. at 28a. In doing so, the District Court noted that “by May 2010, all of the relevant transactions had occurred and been publicly announced, through a combination of updates from [Genaera Liquidating Trust], public SEC filings, and press releases from the acquiring companies.” Id. at 27a. It dismissed the rescission and punitive damages claims because they cannot stand without their underlying claims, and dismissed counts 4-8 with prejudice, even though Schmidt had previously agreed to dismiss those claims without prejudice. 12 The District Court’s decision did not cite, and the parties did not call to its attention, this court’s opinion in In re Mushroom Transportation Co., 382 F.3d 325, 343 (3d Cir. 2004), which bears on this appeal because it provides standards for applying the discovery rule in cases involving the statute of limitations applicable to fiduciary defendants. Schmidt timely appeals. While he concedes that a two-year statute of limitations applies and acknowledges that the relevant transactions occurred more than two years before he filed his suit, he argues that the District Court erred in considering materials outside of the complaint in evaluating the defendants’ motions to dismiss, and that material factual disputes exist as to whether Pennsylvania’s discovery rule tolled the limitations period.