US SUPREME COURT DECISIONS

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 in organizing the partnerships and prepared opinion letters addressing the tax consequences of investing. The partnerships failed, and, subsequently, the Internal Revenue Service disallowed the claimed tax benefits. In 1986 and 1987, plaintiff-respondents filed complaints in the Federal District Court for the District of Oregon, alleging that they were induced to invest in the partnerships by misrepresentations in offering memoranda prepared by petitioner and others, in violation of, inter alia, § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and asserting that they became aware of the alleged misrepresentations only in 1985. The court granted summary judgment for the defendants on the ground that the complaints were not timely filed, ruling that the claims were governed by Oregon's 2-year limitations period for fraud claims, the most analogous forum state statute; that plaintiff-respondents had been on notice of the possibility of fraud as early as 1982; and that there were no grounds sufficient to toll the statute of limitations. The Court of Appeals also selected Oregon's limitations period, but reversed, finding that there were unresolved factual issues as to when plaintiff-respondents should have discovered the alleged fraud.

Held: The judgment is reversed.

895 F.2d 1416, 1417, and 1418, reversed.

JUSTICE BLACKMUN delivered the opinion of the Court with respect to Parts I, II-B, II-C, III, and IV, concluding that:

1. Litigation instituted pursuant to § 10(b) and Rule 10b-5 must be commenced within one year after the discovery of the facts constituting the violation and within three years after such violation, as provided in the 1934 Act and the Securities Act of 1933. State borrowing principles should not be applied where, as here, the claim asserted is one implied under a statute also containing an express cause of action with its own time limitation. The 1934 Act contemporaneously enacted a number of express remedial provisions actually designed to accommodate a balance of interests very similar to that at stake in this litigation. And the limitations periods in all but one of its causes of action include some variation chanrobles.com-redchanrobles.com-red

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of a 1-year period after discovery combined with a 3-year period of repose. Moreover, in adopting the 1934 Act, Congress also amended the 1933 Act, adopting the same structure for each of its causes of action. Neither the 5-year period contained in the 1934 Act's insider trading provision, which was added in 1988, nor state law fraud provides a closer analogy to § 10(b). Pp. 501 U. S. 358-362.

2. The limitations period is not subject to the doctrine of equitable tolling. The 1-year period begins after discovery of the facts constituting the violation, making tolling unnecessary, and the 3-year limit is a period of repose inconsistent with tolling. P. 501 U. S. 363.

3. As there is no dispute that the earliest of plaintiff-respondents complaints was filed more than three years after petitioner's alleged misrepresentations, plaintiff-respondents' claims were untimely. P. 501 U. S. 364.

BLACKMUN, J., delivered the opinion of the Court with respect to Parts I, II-B, II-C, III, and IV, in which REHNQUIST, C.J., and WHITE, MARSHALL, and SCALIA, JJ., joined, and an opinion with respect to Part II-A, in which REHNQUIST, C.J., and WHITE and MARSHALL, JJ., joined. SCALIA, J., filed an opinion concurring in part and concurring in the judgment, post, p. 501 U. S. 364. STEVENS, J., filed a dissenting opinion, in which SOUTER, J., joined, post, p. 501 U. S. 366. O'CONNOR, J., filed a dissenting opinion, in which KENNEDY, J., joined, post, p. 501 U. S. 369. KENNEDY, J., filed a dissenting opinion, in which O'CONNOR, J., joined, post, p. 501 U. S. 374. chanrobles.com-redchanrobles.com-red

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