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GUTMAN v. EQUIDYNE EXTRACTIVE INDUS. 1980

November 23, 1992

ERNEST GUTMAN, JOSEPH KARLIN, EDWARD J. KINEKE, THOMAS R. CASEY, ROBERT DOWNING, EFREM HIAN, MICHAEL R. TONGEL, NORMAN WALL, RALPH A. JESSAR, SALVATORE J. VERNACE, ELLIOT A. HELLER, AHMAD HASHEMIYOON, ALF ABRAHAMSEN, MICHAEL A. GOLD, BARRY JAY KAYE, ALAN H. KOTZ, JOSEPH V. COOPER, HARRIS TRUST AND SAVINGS BANK, as Executor of the Estate of LLOYD V. CONANT, and NOVICK BROS. a Pennsylvania Partnership, as Investors who Purchased the Securities of Equidyne Extractive Industries 1980 Petro/Coal Program I and also Derivatively on behalf of Equidyne 1980 Gas and Oil Associates I, a Limited Partnership, Plaintiffs,
v.
EQUIDYNE EXTRACTIVE INDUSTRIES 1980 PETRO/COAL PROGRAM I, EQUIDYNE 1980 GAS AND OIL ASSOCIATES I, EQUIDYNE 1980 COAL VENTURE, EQUIDYNE EXTRACTIVE INDUSTRIES, INC., EQUIDYNE CORPORATION, EASTLAND DRILLING CORPORATION, EASTERN MINING SYSTEMS, EASTLAND INDUSTRIES, INC., STUART R. ROSS, JOEL I. BEELER, ROBERT H. LIEBMANN, ROBSON, MILLER & OSSERMAN, and MARKS SHRON AND COMPANY, Defendants. ROBSON, MILLER & OSSERMAN, Third-Party Plaintiff, v. JOEL I. BEELER, Third-Party Defendant.


DUFFY


The opinion of the court was delivered by: KEVIN THOMAS DUFFY

MEMORANDUM & ORDER

KEVIN THOMAS DUFFY, D.J.:

 The history of this action reflects the evolving status of the law of statutes of limitations in securities cases. Hopefully this is the last time that I will have to address it at length in this case.

 On November 17, 1987, Robson moved to dismiss federal and pendent state claims. By order dated July 25, 1990, I dismissed claims founded upon Sections 17(a) and (a)(2) and legal malpractice against Robson. In addition, I dismissed the complaint against defendant accounting firm, Marks Shron & Co. The only claims which remained as against Robson were claims pursuant to Section 10(b) and Rule 10b-5 and state claims pendent thereto.

 On January 25, 1991, Robson moved pursuant to Fed. R. Civ. P. 15(a) to amend its answer to include an affirmative statute of limitations defense as to the federal claims. In the event that I granted that motion, Robson further moved pursuant to Fed. R. Civ. P. 56(c) to dismiss all remaining federal claims as time barred and to dismiss the state claims for incomplete diversity and lack of pendent jurisdiction. By memorandum and order dated May 8, 1991, I granted Robson's motion to amend its answer to include a statute of limitations defense, but denied the attendant motion for summary judgment.

 Robson then moved, on June 14, 1991, pursuant to Local Rule 3(j) of the Civil Rules for the Southern District of New York, to reargue that portion of the May 8, 1991 order which denied summary judgment. Less then one week later, however, on June 20, 1991, the United States Supreme Court issued a decision in Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, U.S. , 111 S. Ct. 2773, 115 L. Ed. 2d 321, (1991), adopting a one year/three year statute of limitations for causes of action arising under § 10(b) of the '34 Act. That same day, in James B. Beam Distilling Co. v. Georgia et al., U.S. , 111 S. Ct. 2439, 115 L. Ed. 2d 481 (1991), the Court held that "it is error to refuse to apply a rule of federal law retroactively after the case announcing the rule has already done so." Id. at 2446. By memorandum opinion and order dated September 29, 1991, I applied Lampf in accordance with Beam, and dismissed the federal securities claims herein as time barred, thereby granting Robson's motion for reargument and their attendant summary judgment motion. Additionally, I dismissed the pendant state claims for lack of diversity.

 In an apparent attempt to ease the inevitable harshness occasioned by the retroactive application of the statute of limitations announced in Lampf, Congress, on December 19, 1991, enacted § 27A of the '34 Act. Section 27A(b) provides:

 any private civil action implied under section 78(b) [10(b)] of this title that was commenced on or before June 19, 1991--

 (1) which was dismissed as time barred subsequent to June 19, 1991, and

 (2) which would have been timely filed under the limitation period provided by the laws applicable in the jurisdiction, including principles of retroactivity, as such laws existed on June 19, 1991,

 shall be reinstated on motion by the plaintiff not later than 60 days after Dec. 19, 1991.

 Securities and Exchange Act of 1934, § 27A(b)(1) & (2), 15 U.S.C. § 78aa-1(b)(1) & (2) (1991). Thus, on January 16, 1992, Gutman et al. moved pursuant to § 27A for an order reinstating their complaint.

 Robson does not contest reinstatement as to the four plaintiffs who reside in New York. Robson, however, does contest reinstatement as to the remaining fifteen plaintiffs. Additionally, Robson argues that, should I grant reinstatement of the complaint to any extent, it should be reinstated to the position it occupied on June ...


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