November 25, 2003

Did Congress Intend To Revive Time-Barred Claims?

In Roberts v. Dean Witter Reynolds Inc., 2003 WL 1936116 (M.D. Fla. March 31, 2003), the court found that the legislative history of the Sarbanes-Oxley Act of 2002, which extended the statute of limitations for federal securities fraud claims to the earlier of two years after the discovery of the facts constituting the violation or five years after such violation, revealed Congress's intent to revive claims that had already expired as of the date of the legislation's enactment (July 30, 2002). The court, however, primarily relied on floor statements made by a single senator and a few sentences in a congressional analysis of the legislation in reaching this conclusion. It also certified an interlocutory appeal.

The Fulton County Daily Report has coverage of the oral argument in Roberts before the U.S. Court of Appeals for the 11th Circuit. The panel apparently expressed skepticism about the lower court decision, including Chief Judge Edmonson's comment that to establish Congress meant to revive time-barred claims: "You're going to have to show me something with neon light and underlined by Congress." The 11th Circuit will be the first federal court of appeals to rule on this issue.

Quote of note: "[Visiting 9th Circuit Senior Judge] Farris later chimed in that Congress knows how to use the word 'revive,' suggesting that if Congress had wanted Sarbanes-Oxley to be able to revive previously expired claims, it could have done so. 'They didn't,' Farris added."

The 10b-5 Daily has previously posted about the recent district court decisions (including Roberts) addressing the retroactivity of the new statute of limitations.

Posted by Lyle Roberts at November 25, 2003 6:58 PM | TrackBack
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