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Posts Tagged ‘inquiry notice’

The Supreme Court heard argument today in the securities class action case, Merck & Co., Inc. v. Reynolds, No. 08-905 (U.S.).  The case involves allegations that the defendant defrauded investors by making false  statements about the health risks associated with the drug Vioxx.  The issue in the case, courtesy of SCOTUS Wiki, is

Whether under the “inquiry notice” standard applicable to federal securities fraud claims, the statute of limitations does not begin to run until an investor receives evidence of scienter.

Tony Mauro of the National Law Journal quotes remarks from Justices Ginsberg, Scalia, and Kennedy in concluding that the Court appeared skeptical of the defendant’s arguments that information available in the public domain in 2001 should have given investors sufficient knowledge to start the statute of limitations running.  Mauro’s article is available at Law.com.

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This month’s edition of BNA, Inc.’s Class Action Litigation Reporter (available by subscription) tipped me off to three interesting class action-related cases pending before the United States Supreme Court:

1) Morrison v. National Australia Bank, No. 08-1191 (cert pending).  The Court invited the Solicitor General to submit a brief expressing the U.S. government’s views on a petition for certoriari to review the Second Circuit Court of Appeals’ well-publicized “foreign-cubed” class action decision.  (For more on the lower court’s decision in Morrison, see this October 28, 2008 CAB entry).

2) Herz v. Corporation v. Friend, No. 08-1107 (cert granted).  This case involves an issue that is the subject to a split among the Circuit Courts of Appeals regarding the proper test for establishing a corporation’s principal place of business for diversity purposes under 28 U.S.C. 1332, as amended by the Class Action Fairness Act (CAFA). 

3) Merck & Co. v. Reynolds, No. 08-905 (cert granted).  This appeal involves the standard for triggering the statute of limitations in a securities fraud case and the question of whether, for purposes of “inquiry notice” sufficient to trigger the limitations period, an investor has a duty to investigate prior to receiving actual knowledge of both a misrepresentation and the defendant’s wrongful intent.

The cert petitions and briefs for these cases are available for download at the SCOTUSblog.

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