Document: 501 U.S. 350 111 S.Ct. 2773 115 L.Ed.2d 321 LAMPF, PLEVA, LIPKIND, PRUPIS & PETIGROW, Petitionerv.John GILBERTSON et al. No. 90-333. Argued Feb. 19, 1991. Decided June 20, Rehearing Denied Sept. 13, See U.S., 112 S.ct. 27. Syllabus During 1979 through 1981, plaintiff-respondents purchased units in seven Connecticut limited partnerships, with the expectation of realizing federal income tax benefits. Among other things, petitioner, a New Jersey law firm, aided organizing partnerships and prepared opinion letters addressing consequences investing. The failed, and, subsequently, Internal Revenue Service disallowed claimed In 1986 1987, filed complaints Federal District Court for Oregon, alleging that they were induced to invest by misrepresentations offering memoranda petitioner others, violation of, inter alia, § 10(b) Securities Exchange Act 1934 Rule 10b-5, asserting became aware alleged only 1985. court granted summary judgment defendants on ground not timely filed, ruling claims governed Oregon's 2-year limitations period fraud claims, most analogous forum-state statute; had been notice possibility as early 1982; there no grounds sufficient toll statute limitations. Appeals also selected period, but reversed, finding unresolved factual issues when should have discovered fraud. Held: is reversed. 895 F.2d 1416, 1417, 1418 (CA9 1990), Justice BLACKMUN delivered respect Parts I, II-B, II-C, III, IV, concluding that: 1. Litigation instituted pursuant 10b-5 must be commenced within one year after discovery facts constituting three years such violation, provided 1933. State-borrowing principles applied where, here, claim asserted implied under containing an express cause action its own time limitation. contemporaneously enacted number remedial provisions actually designed accommodate balance interests very similar at stake this litigation. And periods all causes include some variation 1-year combined 3-year repose. Moreover, adopting Act, Congress amended 1933 same structure each action. Neither 5-year contained Act's insider-trading provision, which was added 1988, nor state-law provides closer analogy 10(b). Pp. 358-362. 2. subject doctrine equitable tolling. begins making tolling unnecessary, limit repose inconsistent P. 363. 3. As dispute earliest plaintiff-respondents' more than petitioner's misrepresentations, untimely. 364. BLACKMUN, J., REHNQUIST, C.J., WHITE, MARSHALL, SCALIA, JJ., joined, Part II-A, WHITE joined. concurring part judgment. STEVENS, dissenting opinion, SOUTER, O'CONNOR, KENNEDY, Theodore B. Olson, Washington, D.C., petitioner. F. Gordon Allen, Portland, Or., respondents. Court, except II-A. 1 litigation we determine applicable private suit brought 1934, 48 Stat. 891, 15 U.S.C. 78j(b), Commission 17 CFR 240.10b-5 (1990), promulgated thereunder. 2 * controversy arises from sale formed purpose purchasing leasing computer hardware software. Petitioner Lampf, Pleva, Lipkind, Prupis Petigrow West Orange, N.J., firm additional legal services, including preparation investing partnerships. several or during 1981 benefits therefrom. 3 due technological obsolescence their wares. late 1982 1983, received United States investigating IRS subsequently because overvaluation partnership assets lack profit motive. 4 On November 3, 1986, 4, respective naming others involved memoranda, among 10b-5. said assurances investments would entitle purchasers substantial benefits; software packages generate profit; readily marketable; certain equipment appraisals accurate reasonable. Plaintiff-respondents 1985 following disallowance claimed. 5 After consolidating actions pretrial proceedings, filed. App. Pet. Cert. 22A. Following precedent controlling court, see, e.g., Robuck v. Dean Witter Co., 649 641 1980), ruled securities state determined Ore.Rev.Stat. 12.110(1) (1989). found reports detailing declining financial status allegations misconduct made known general partners put "inquiry notice" October 1982. 43A. distribution fiscal installation partner previously associated did constitute fraudulent concealment Applying Oregon underlying complaint barred. 6 Ninth Circuit reversed remanded cases. Reitz Leasing Consultants Associates, (1990) (judgment entry). unpublished precluded Then, it period. so doing, implicitly rejected argument apply claims. 8A. view divergence Circuits regarding proper claims,1 certiorari address important issue. --- ----, 242, 201 (1990). II 7 maintain correctly identified common-law source derived. They submit policies practicalities do justify departure traditional practice "borrowing" statutes Petitioner, hand, argues appropriate, contending look "1-and-3-year" 13 1933, 84, amended, 77m, see §§ 78i(e), 78r(c), 78cc(b).2 Solicitor General, appearing behalf Commission, agrees use indicated, urges application specified 20A 78t-1(b)(4), Insider Trading Fraud Enforcement 102 4681. said, accords "Congress's recent views accommodation competing interests, closest analogy, promises yield best practical policy results litigation." Brief Amicus Curiae 8. For reasons discussed below, agree uniform hold Acts provide source. 8 It usual rule has failed action, "borrows" "absorbs" local limitation case hand. Wilson Garcia, 471 261, 266-267, 105 1938, 1941-1942, 85 254 (1985); Auto Workers Hoosier Cardinal Corp., 383 696, 704 (1966); Campbell Haverhill, 155 610, 617, 217, 220, 39 L.Ed. 280 (1895). This practice, derived Rules Decision 28 1652, enjoyed longevity may assume that, enacting legislation, ordinarily "intends silence borrow law." Agency Holding Corp. Malley-Duff Inc., 483 143, 147, 107 2759, 2762, 97 121 (1987). 9 rule, however, without exception. We recognized legislature rarely enacts mind, Occidental Life Ins. Co. EEOC, 432 355, 367, 2447, 2454-2455, 53 402 (1977), operation frustrate embraced enactment, looked suitable See, DelCostello Teamsters, 462 151, 103 2281, 76 476 (1983); supra; McAllister Magnolia Petroleum 357 221, 224, 78 1201, 1203-1204, 1272 (1958). These departures state-borrowing motivated Court's conclusion "inappropriate conclude choose adopt rules odds substantive DelCostello, 161, S.Ct., 2289. 10 Rooted expectations Congress, "state-borrowing doctrine" lightly abandoned. described borrowing "a closely circumscribed exception," "only 'when elsewhere clearly available statutes, make significantly appropriate vehicle interstitial lawmaking.' " Reed Transportation Union, 488 319, 324, 109 621, 625, 665 (1989), quoting 172, 2294. 11 Predictably, determination delicate one. Recognizing, selected,3 our cases guidance whether suited consideration. From these are able distill hierarchical inquiry ascertaining where set brought. 12 First, selected. Where tends "encompass numerous diverse topics subtopics," 273, 1945, single consistently jurisdiction, concluded predictability judicial economy counsel adoption source, class sources, purposes. Id., 273-275, 1945-1946. ultimately result selection supra, variety actions. Garcia (characterizing 42 1983 personal injury action). Second, assuming decide judgment, accord particular weight geographic character claim: 14 "The multistate nature [the issue] indicates desirability With multiple limitations, present danger forum shopping least, 'virtually guarante[e] . complex expensive over what straightforward matter.' 154, 2766, Report Ad Hoc Civil RICO Task Force ABA Section Corporation, Banking Business Law 392 (1985). Finally, even considerations borrowing, aforementioned presumption requires truly affords "closer fit" issue does any Although pertinent will necessarily vary depending upon analogues, factors commonality similarity elements relevant. B 16 litigation, task complicated nontraditional origins text claims.4 Such creation, having nearly half century. Kardon National Gypsum 69 F.Supp. 512 (ED Pa.1946), cited Ernst Hochfelder, 425 185, 196, n. 16, 96 1375, 1382, 47 668 (1976). repeatedly validity Blue Chip Stamps Manor Drug Stores, 421 723, 730, 95 1917, 1922-1923, 44 539 (1975); Affiliated Ute Citizens States, 406 128, 150-154, 92 1456, 1470-1472, 31 741 (1972); Superintendent Insurance Bankers Cas. 404 6, 9, 165, 169, 30 128 (1971), pretense Congress' design remedy afforded. Ernst, 1382 ("[T]here indication contemplated remedy.") (footnotes omitted). therefore surprise provision contains this, faced awkward discerning intended courts really never knew existed. Fortunately, drafters guidance. 18 limitation, first origin ascertain can imagine clearer how balanced implicit struck limiting related protections. 171, 2294; Parcel Service, Inc. Mitchell, 451 56, 69-70, 101 1559, 1567-1568, 67 732 (1981) (opinion judgment). When comparable provisions, usually end. Only counterpart then proceed principles. 19 doubt represent here—a is, fact, lawsuit apt suggested parallels." 2293. explicit restrictive exception,5 includes repose.6 73d 1-and-3-year therein.7 20 78i, pertaining willful manipulation security prices, 18, 78r, relating misleading filings, target precise dangers focus Each integral element web regulations. facilitate central goal: "to protect investors against stock prices regulation transactions exchanges over-the-counter markets, impose regular reporting requirements companies whose listed national exchanges." 195, citing S.Rep. 792, Cong., 2d Sess., 1-5 (1934). C 21 reject Commission's contention 20A, original provisions. 50 focuses specific problem, namely, "purchasing selling [of] while possession material, nonpublic information," 78t-1(a), "insider trading." Recognizing unique difficulties identifying evidence activities, 100th adopted measures greater deterrence, detection punishment violations insider H.R.Rep. 100-910, p. (1988). There sought extend enhanced protection Act. Indeed, contrary. 20A(d) states: "Nothing section shall construed condition right person bring enforce requirement chapter availability chapter." 78t-1(d). 22 further conduct violative actionable based two different But prohibits activities violate sections periods. language makes clear alter remedies trading cases, inconsistency. 23 contends inclusion, broad range suggests congressional sufficient. Ceres Partners GEL 918 349, 363 (CA2 1990). 24 Thus, every called 20A. Partners, Short Belleville Shoe Mfg. 908 1385 (CA7 cert. pending, 90-526; re Data Access Systems Litigation, 843 1537 (CA3), denied sub nom. Vitiello I. Kahlowsky 849, 131, 25 Necessarily, assertion analytical framework above consideration alternatives unnecessary correlative enactment.8 III 26 whatever note, correctly, "[t]ime suits customarily 'equitable tolling.' Irwin Veterans Administration, 453, 457, 435 Hallstrom Tillamook County, 493 110 304, 237 case, "where party injured remains ignorance fault want diligence care his part, bar begin run until discovered, though special circumstances efforts committing conceal knowledge party." Bailey Glover, Wall. 342, 348, 636 (1874); Holmberg Armbrecht, 327 392, 396-397, 66 582, 584-585, 90 743 (1946). Notwithstanding venerable principle, evident fundamentally structure. 27 terms, unnecessary. One commentator explains: "[T]he inclusion three-year significance context outside limit." Bloomenthal, Statute Limitations Claims: A Study Judicial Lassitude, 60 U.Colo.L.Rev. 235, 288 Committee Regulation Securities, Implied Actions 645, 655 (1986) (advancing "the inescapable intend laws"). Because serve cutoff, IV violation.9 untimely.10 29 ordered. 32 I accept stare decisis effect decisions continue disagree methodology recently purposes those decisions. my view, absent congressionally created govern, or, if act, exists. 157-170, 2767-2775, (1987) (Justice judgment), 334, 630-631, (1989) 33 presents distinctive difficulty involves so-called "implied" decades, prone discover in—or, accurately, create reliance upon—federal legislation. Thompson Thompson, 484 174, 190, 108 513, 521-522, 98 (1988) Raising up them function courts, tribunals. id., 191-192, 522-523; Cannon University Chicago, 441 677, 730-749, 99 1946, 1974-1985, 560 (1979) (Powell, dissenting). done so, thus question applies suit. opportunity (since itself action) consider content prefer craft rule. That particularly apparent since enacted. 78p(b), 78r(c); 77m. 34 confronted situation, thing applying ordinary (and pre-1983 traditional) unintended possibly irrational certainly deter invention unworthy goal, pursue fashion highly unjust who litigate past inventions. An alternative approach say ought "imply" well. just enough, too lawless imagined. seems me responsible approach, enactment occasion creation that. imagining here. "[w]e protections." Ante, ----. 35 join II-A opinion. 36 whom SOUTER joins, dissenting. 37 undertaken lawmaking properly performed Congress. Starting premise violating out whole cloth judiciary, concludes judiciary authority page history explain why both flawed. 38 Pa.1946). recognizing Judge Kirkpatrick merely well-settled law. true history, presumed benefit members statute. Texas Pacific R. Rigsby, 241 33, 39-40, 482, 484-485, 874 (1916).1 "new law" he traded interstate commerce. ensuing four decades administering settled find governing timeliness Del-Costello International Brotherhood 172-173, 2294-2295, (1983) (STEVENS, dissenting).2 decided better kind. System Security (CA3). preferable often chaotic looking believe, rather responsibility determinations required rejecting long choosing new rules.3 can—and does—specify effective date extent pending 104 5114, quoted ante, 364, ventures into arena, inevitably raises questions concerning retroactivity difficult arguably neutral, non-policy role judge. Chevron Oil Hudson, 97, 296 (1971); Access, F.2d, 1551 (Seitz 40 rejection silent justified prior Despite majority's recognition effectively repudiates holding [within statute] principles." 359. principal justification took supra. registered dissent today. nothing lead believe depart 171-173, 2294-2295. Likewise leads us overrule established 41 primarily relies, (1987), distinguishable case. Holding, involve change forty years. Furthermore intent pattern Clayton antitrust remedy. four-year reasonably inferred wanted statutes. 1-and-3 360-361. choices today well wise—even recommendation Executive Branch—but between 1946 1988 impliedly authorized statutory construction acquires clarity "is simply beyond peradventure." Herman MacLean Huddleston, 459 375, 380, 683, 686, 74 548 (1983). observe principle occasional today's refusal comply e.g. Shearson/American Express Mcmahon, 482 268, 2332, 2539, 185 Accordingly, respectfully dissent. 43 KENNEDY stated write separately disagreement decision respondent's time-barred exist before today, departs drastically inflicts injustice declines unprecedented decision, acknowledge unusual character. 45 Respondents, plaintiffs 1986. Everyone time, mandated solid wall binding dating back years.1 353. proceeded almost changed; remained limitations.2 respondents' entirely now holds dismissed untimely respondents announced today—four-and-one-half Quite simply, shuts courthouse door unable predict future. 46 might get impression matter-of-fact handling standard practice. comprises, all, sentences: sentence sets 1- rule; second states failure Surely, think, doing anything ordinary, comment fact. Apparently not. has, occasions, Until retroactively precedent. Our instead evaluate hand old reserving future prime example Huson, (1971). At initiated, governed. changed declined announced. recognized, sensibly, overruled line Appeals' respondent relied, 107, 355-356; retroactive using 107-108, inequitable pretend 'slept rights' when, reality, complied fully existed could foreseen change. 108, 356. 49 followed precisely course later Saint Francis College Al-Khazraji, 481 604, 2022, 582 specifying precedent, manner. relied expressly analysis Oil, prospectively overrules statute, "manifestly inequitable." College, 608-609, 2025-2026. fundamental notions process. reflect earlier violates process thereby deprive arbitrarily heard court. Iseminger, 55, 62, 573, 804 (1902); Brinkerhoff-Faris Trust Savings Hill, 281 673, 681-682, 451, 454-455, 1107 (1930). Not surprisingly, then, generated Court: joined Justice, reach question; unanimous. 51 last Term, eight Justices reaffirmed common-sense prospectively. American Trucking Associations, Smith, 496 2323, 148 presented Court—striking down unconstitutional highway scheme retroactively. explaining retroactively, plurality heavily cases: 52 "When considering applicability newly defining focused taken usually, filing litigant held suit." 2339. Four Justices, disagreeing 's contexts, explicitly "most [hold] [a] plaintiff ha[s] ' "slept rights" neither defendant case." 2353 dissenting), 54 Trucking, continued vitality is—or irrefutable; James Beam Distilling Georgia, 2439, ---- (1991), alters indistinguishable denied. All met. precedent; admits much. explains interes[t] predictability" demands standard. 357. agree, surely cannot favor foreseen. Third, obvious. spending four-and-one-half tens thousands dollars attorney's fees, 55 Earlier observed serves profoundly system." California Acevedo, 1982, 1991, (1991). If understand brand discussing relevant acknowledging issue, follow mention Brinkerhoff-Faris. 56 cursory treatment oversight. parties briefed Court. Respondents 45-48; Reply 18-20. addition, amicus curiae brief addressed explicitly, urging remand lower instance. Nevertheless, unknown unexplained, chooses ignore visiting unfairness 57 Even agreed dictate instance lawsuit. 58 O'CONNOR 59 am full agreement precedents, 1-year-from-discovery employed various note disagreement, simultaneous absolute time-bar conflicts fraud-based actions, frustrates usefulness protecting defrauded investors, imposes severe become essential component gives unlawful practices. recognizes, absence matter rare all. apply, "when lawmaking." 2295, looks rights believes mode analysis; given sense 68, 1567, (1981). relieve us, obligation "frustrate interfere policies." Reed, 327, 627. determining give careful aggrieved establishing violation. Ibid.; 1942-1943, 61 identifies follows terms. Rather, separate distinct references rejects outright references, purports two. 78r(c). latter employ 1-year, schemes establishes wording. identify controlling, engage close gramatical 62 importance relate rationale differ refers strict liability used L. Loss, Fundamentals 920 (2d ed. 1988). relates scope coverage Nor either rest common model 63 significant protections practices markets. Intended comprehensive antifraud operating laws application, connection purchase "any manipulative deceptive device contrivance" rules. 78j. gave primary enforcing section, "an tool enforcement requirements," Basic Levinson, 485 231, 978, 983, 194 (1988), 'a necessary supplement action.' Batemen Eichler, Hill Richards, Berner, 472 299, 310, 2622, 2628, 86 215 (1985) (quoting J.I. Case Borak, 377 426, 432, 84 1555, 1560, 423 (1964)). facilitating "suppor[t] embodied Act" combating forms Basic, 245, 990. 64 obstacles bringing significant. Once jurisdiction established, prove proof false statement material omission, Santa Fe Industries, Green, 430 462, 1292, 480 thereon, 243, 989; cf. 990 (reliance proving "fraud-on-themarket"), damages caused wrongdoing, Randall Loftsgaarden, 478 647, 663, 106 3143, 3152-3152, 525 (1986), scienter defendant, Given complexity modern prove. 65 real burden initial discovering occurred victims classic fraud-like "[C]oncealment inherent cases." Bar Association, Actions, Bus.Lawyer 654 extensive corrupt allowed Ponzi schemes, example, illusion profit-making enterprise years, sophisticated perpetration. 656. gone undetected revealed broker's suicide note. 189, 1378-1379. indeed simple business life, "thwart legislative creating remedy" By repose, dead letter conceivable fairness practicality expected file occurred. turns short vast majority victim's Shapiro Blauner, Aftermath Re England L.Rev. 537, 549-550 small minority constrain typically permit least five Fla. 95.11(4)(e) (1991) (5-year repose); Ky. 413.120(12) (10-year Mo. 516.120(5) repose). granting reasonable prepare perpetrators. Interstate Land Sales Full Disclosure 1711(a)(2) (action violation); 78t-1(b)(4) violation). merits. sometimes easier discovered. important, promote fairness. "Just fact passage memories witnesses faded lost." Wilson, 271, 1944. considerations, realities ensure fair legitimate yet preventing stale extreme moreover, extraordinary length, laches unfair claim. 162, 2289; tips scale far wrongdoers. 68 forecloses means recovery investor mistake concealed unforgiving markets serious concern, corrected. prompt taken, avail caught here basis respect, instructions event, litigants rely setting O'CONNOR's full. Nesbit McNeil, 896 380 1990) (applying fraud); Bath Bushkin, Gaims, Gaines Jonas, 913 817 (CA10 (same); O'Hara Kovens, 625 (CA4 denied, 449 1124, 939, blue sky period); Forrestal Village, Graham, 179 U.S.App.D.C. 225, 551 411 (1977) (establishing 90-526 (same). identical language, imposed (1977). No 10(b), intent. provides: "It person, directly indirectly, instrumentality commerce mails, facility exchange— "(b) To employ, contrivance contravention regulations prescribe public interest investors." 1942, commerce, mails exchange, "(a) device, scheme, artifice defraud, untrue omit order statements made, light misleading, "(c) operates operate deceit "in security." 16(b), disgorgement profits differs 16(b) 9(e) "No maintained unless violation." 78i(e). 18(c) accrued." 77k 77l (2) title exercise dilligence, (1) title, based. event bona fide offered public, sale." one-year accompanying one-and-three-year represents indivisible cutoff point disserve sever support portion comes type policymaking avoid. notes, slightly terminology. distinctions significant, select 313(a) Improvements 1990, reads: "Except otherwise law, civil arising accrues." 313(c) "amendments accruing [December 1, 1990] Act." obviously (1916) unanimous presumption: "A disregard command wrongful damage especial enacted, recover default implied, according maxim, Ubi jus ibi remedium." 484. judges 'borrowed' directed 1652. dissenting); 157-165, 2767-2772, (SCALIA, concurring). perfectly capable need uniformity treble 1955, 4B 283, 15b. 641, 644 (1980); Williams Sinclair, 529 1383, 1387 (1976); Douglass Glenn E. Hinton Investments, 440 912, 914-916 Hecht Harris, Upham 1202, 1210 (1970); Royal Air Properties, 312 210, 214 (1962); Fratt Robinson, 203 627, 634-635 (1953). Davis Birr, 839 1369, 1369-1370 1988); Volk D.A. Davidson 816 1406, 1411-1412 1987); Semegen Weidner, 780 727, 733 1985); SEC Seaboard 677 1301, 1308-1309 1982).

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