The opinion of the court was delivered by: LAWRENCE M. MCKENNA
By Orders dated July 8, 1992, this Court dismissed as time-barred the federal causes of action asserted in two out of three purported class actions previously consolidated for pretrial proceedings pursuant to Fed. R. Civ. P. 42: Harold Menowitz v. David F. Brown et al. ("Menowitz"), and Stanton Sprizler v. David F. Brown et al. ("Sprizler"), and declined to exercise supplemental jurisdiction over non-federal claims asserted in those actions. As indicated in the Court's Memorandum and Order of July 8, 1992 (hereinafter the "July Memorandum"), both Menowitz and Sprizler were originally filed in the Southern District of New York; Harry Drooker v. PaineWebber, Inc., et al. ("Drooker), the third action affected by the pre-trial consolidation, was originally filed (on or about March 12, 1991) in the Southern District of Florida, and was transferred here in August 1991, by order of the Judicial Panel on Multidistrict Litigation.
The Court's analysis of the limitations period applicable to the Menowitz and Sprizler plaintiffs' claims under Section 10(b) of the Securities Exchange Act of 1934 (the "1934 Act"), 15 U.S.C. § 78j(b), is set forth in the July Memorandum, familiarity with which is assumed. At page 15 of the July Memorandum appears a footnote reading, in pertinent part, as follows:
The parties are directed to brief the issue of whether the law that determines the timeliness of the Drooker Plaintiffs' claims under Section 10(b) of the 1934 Act is the law that existed in this or another jurisdiction on June 19, 1991. Any party taking the position that the applicable law is not that of the Second Circuit is further directed to set forth "the limitation period provided by the laws applicable in the [relevant] jurisdiction, including principles of retroactivity, as such laws existed on June 19, 1991."
(July Mem. at 15 n.6) (citation omitted). In this Memorandum and Order, the Court addresses memoranda of law submitted by the parties in response to the Court's request for supplemental briefs, as set forth immediately above.
The parties' agreement on the foregoing point notwithstanding, the applicability of Eleventh Circuit law to the assessment of the Drooker Plaintiffs' Section 10(b) claims--and the timeliness of those claims measured by that standard--are very much in dispute. For the reasons that follow, the Court concludes that the timeliness of the Drooker Plaintiffs' Section 10(b) claims is governed not by the Eleventh Circuit's two- and five-year period, but rather by the one- and three-year period announced in Ceres Partners v. GEL Associates, 918 F.2d 349 (2d Cir. 1990). Accordingly, evaluation of arguments addressed to the time-bar analysis under Eleventh Circuit law is unnecessary here.
The question that the Court has directed briefed arises out of the combined effect of Drooker's transfer from the Southern District of Florida, pursuant to 28 U.S.C. § 1407, and Congress' enactment of the Federal Deposit Insurance Corporation Improvement Act of 1991 (hereinafter the "F.D.I.C. Improvement Act"), of which Section 476 provides that "the limitation period for any private civil action implied under section 10(b) of [the 1934 Act] that was commenced on or before June 19, 1991, shall be the limitation period provided by the laws applicable in the jurisdiction, including principles of retroactivity, as such laws existed on June 19, 1991." Pub. L. No. 102-242, § 476, 1991 U.S.C.C.A.N. (105 Stat.) 2236. As the Court noted in the July Memorandum, Section 476 precludes full retroactive application of the Supreme Court's decision in Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 115 L. Ed. 2d 321, 111 S. Ct. 2773 (1991), and it also operates to reinstate certain actions dismissed under Lampf that were filed before the date of that decision and were timely under the statute of limitations then in effect.
Like the Menowitz and Sprizler actions, the Drooker action was commenced before June 19, 1991, and the quoted provision of the F.D.I.C. Improvement Act squarely applies. Unlike either of the other two actions with which it has been consolidated, however, Drooker was commenced by the filing of a complaint in a jurisdiction outside of the Second Circuit, and the assessment of its timeliness as measured by the "limitation period provided by the laws applicable in the jurisdiction . . . as such laws existed on June 19, 1991," therefore requires a more careful parsing of the statute than would otherwise be called for: in the context of a transferred multi-district action such as Drooker, the question (which appears to be one of first impression in this Circuit) is whether the quoted language of the F.D.I.C. Improvement Act is to be understood to refer to laws applicable in the transferor or in the transferee jurisdiction as of June 19, 1991. Defendants' proffered answer to this question has the appeal of relative simplicity. Defendants urge that resolution of the statutory ambiguity in favor of Second Circuit law is required by the teaching of In re Pan American Corp., 950 F.2d 839, 847 (2d Cir. 1991), and bolstered by the D.C. Circuit's discussion in In Re Korean Air Lines Disaster, 829 F.2d 1171, 1175-76 (D.C. Cir. 1987), aff'd on other grounds sub nom. Chan v. Korean Air Lines, Ltd., 490 U.S. 122, 104 L. Ed. 2d 113, 109 S. Ct. 1676 (1989), to which the decision in Pan American refers. As Defendants would have it, this Circuit's concurrence in the emerging view that matters of federal law should be decided by a federal transferee court in accordance with its own interpretation of the ideally "single body of [federal] law," H.L. Green Co. v. MacMahon, 312 F.2d 650, 652 (2d Cir. 1962), cert. denied, 372 U.S. 928, 83 S. Ct. 876, 9 L. Ed. 2d 736 (1963), without deference to any contrary interpretation of a transferor circuit, compels the reading of the F.D.I.C. Improvement Act Defendants favor. Because this Court is competent to undertake analysis of the Drooker Plaintiffs' federal securities law claims, Defendants reason, the measure of the timeliness of Drooker's Section 10(b) claims is the one- and three-year period provided by the laws in effect in this jurisdiction on June 19, 1991, which operated to bar the Section 10(b) claims in Menowitz and Sprizler.
Plaintiffs urge a contrary construction of the language of the F.D.I.C. Improvement Act in the multi-district transfer context, arguing that a limitations period--where unprescribed by federal statute, and thus non-inherent in a federal claim--is traditionally "borrowed" by the federal court from an analogous state statute and retains its state law character. In this view, the rule of Van Dusen v. Barrack, 376 U.S. 612, 11 L. Ed. 2d 945, 84 S. Ct. 805 (1964)--whether or not applicable to questions of purely federal law--is squarely implicated by a choice of limitations periods in the context of a transferred federal claim such as the one at issue here: "where a federal statutory claim has no prescribed limitations period, the choice of a limitations period is a state law question, and Van Dusen binds the transferee court to apply the limitations laws of the transferor state." (Pls.' Mem. at 3.)
Plaintiffs' position finds some support in case law and in commentary. Rejecting a petitioner's contention that the transfer of his Section 10(b) claim would bar his suit--on statute of limitations grounds--in the transferee district, the Second Circuit in H.L. Green declined to set aside a transfer pursuant to 28 U.S.C. § 1404. Although a litigant is entitled to no particular interpretation of the federal laws governing his cause of action, the Circuit noted, transfer from one judicial district to another should not affect the privileges--including state law-derived limitations periods--that appropriately follow from a plaintiff's initial choice of venue.
The Court's analysis in H.L. Green is not extensive, and its conclusion that "the statute of limitations of the transferor state should continue to apply" to a federal cause of action after transfer pursuant to 28 U.S.C. § 1404(a) apparently follows from a premise not explicit in the text of the opinion--the premise, that is, that a private cause of action judicially implied under Section 10(b) of the 1934 Act necessarily is governed by a limitations period adopted from an analogous state statute, and that the period so derived is thus also necessarily a creature of state law. To similar effect is the brief analysis in Berry Petroleum Co. v. Adams & Peck, 518 F.2d 402 (2d Cir. 1975), an action transferred from the Northern District of Texas pursuant to an order of the Judicial Panel on Multidistrict Litigation. "As there is no federal statute of limitations that applies [to Section 10(b) of the 1934 Act]," the Berry Court wrote, "a district court must look to state law to ...