; ; ;

Transcription

1 Case: Document: Page: 1 Date Filed: 04/06/ ; ; ; United States Court Of Appeals for the Third Circuit NORTH SOUND CAPITAL LLC; NORTH SOUND LEGACY INTERNATIONAL; NORTH SOUND LEGACY INSTITUTIONAL; UNITED FOOD COMMERCIAL WORKERS LOCAL 1500 PENSION FUND, Plaintiffs-Appellees, - v. - MERCK & CO INC; MERCK SCHERING PLOUGH PHARMACEUTICALS; MSP DISTRIBUTION SERVICES C LLC; MSP SINGAPORE CO LLC; RICHARD T. CLARK; DEEPAK KHANNA, Defendants-Appellants. (See Inside Cover For Continuation of Consolidated Captions) APPEAL PURSUANT TO 28 U.S.C. 1292(b) FROM AN ORDER OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY, ENTERED ON AUGUST 26, 2015 CIVIL ACTION NOS. 3: (FLW); 3: (FLW); 3: (FLW); 3: (FLW) BRIEF OF DEFENDANTS-APPELLANTS PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP Daniel J. Kramer Theodore V. Wells, Jr. Charles E. Davidow Daniel J. Leffell Daniel J. Juceam 1285 Avenue of the Americas New York, New York (212) TOMPKINS, MCGUIRE, WACHENFELD & BARRY LLP William H. Trousdale Brian M. English 3 Becker Farm Road, Fourth Floor Roseland, New Jersey (973) Attorneys for Defendants-Appellants Merck & Co., Inc.; Merck/Schering-Plough Pharmaceuticals; MSP Distribution Services (C) LLC; MSP Singapore Company LLC; Richard T. Clark; Deepak Khanna; Fred Hassan; and Carrie S. Cox

2 Case: Document: Page: 2 Date Filed: 04/06/2016 (Consolidated Captions Continued From Inside Front Cover) GIC PRIVATE LIMITED, Plaintiff-Appellee, - v. MERCK & CO INC; MERCK SCHERING PLOUGH PHARMACEUTICALS; MSP DISTRIBUTION SERVICES (C), LLC; MSP SINGAPORE COMPANY, LLC; RICHARD T. CLARK; DEEPAK KHANNA, Defendants-Appellants. GIC PRIVATE LIMITED, Plaintiff-Appellee, - v. MERCK & CO., INC f/k/a SCHERING-PLOUGH CORPORATION; MERCK SCHERING PLOUGH PHARMACEUTICALS; MSP DISTRIBUTION SERVICES (C) LLC; MSP SINGAPORE COMPANY, LLC; FRED HASSAN; CARRIE COX, Defendants-Appellants. NORTH SOUND CAPITAL, LLC; NORTH SOUND LEGACY INTERNATIONAL; NORTH SOULD LEGACY INTERNATIONAL; NORTH SOUND LEGACY INSTITUTIONAL; UNITED FOOD COMMERCIAL WORKERS LOCAL 1500 PENSION FUND; COLONIAL FIRST STATE INVESTMENT, LTD.; CFSIL-CFS WHOLESALE INDEXED GLOBAL SHARE FUND; COMMONWEALTH BANK OFFICERS SUPERANNUATION CORPORATION AS TRUSTEE FUND OFFICERS SUPERANNUATION FUND WGSS04; CFSIL-COMMONWEALTH GLOBAL SHARES FUND 4; COMMONWEALTH BANK OFFICERS SUPERANNUATION CORPORATION AS TRUSTEE FUND OFFICERS SUPERANNUATION FUND WGSS02; COMMONWEALTH BANK OFFICERS SUPERANNUATION CORPORATION AS TRUSTEE FUND OFFICERS SUPERANNUATION FUND WTRA02; CFSIL-COMMONWEALTH SPECIALIST FUND 13; CFSIL WHOLESALE GEARED GLOBAL SHARED FUND; CFSIL ATF CMLA INTERNATIONAL SHARE FUND; CFSIL-COMMONWEALTH GLOBAL SHARES FUND 6; CFSIL-COMMONWEALTH GLOBAL SHARES FUND 2; CFSIL-CFS WHOLESALE ACADIAN GLOBAL EQUITY FUND; CFSIL-CFS WHOLESALE GLOBAL HEALTH & BIOTECHNOLOGY FUND; CFSIL-CFS WHOLESALE GLOBAL SHARE FUND, Plaintiffs-Appellees, - v. - MERCK & CO, INC., f/k/a SCHERING-PLOUGH CORPORATION; MERCK SCHERING PLOUGH PHARMACEUTICALS; MSP DISTRIBUTION SERVICES (C) LLC; MSP SINGAPORE COMPANY, LLC; FRED HASSAN; CARRIE S. COX, Defendants-Appellants.

3 Case: Document: Page: 3 Date Filed: 04/06/2016 TABLE OF CONTENTS Page TABLE OF AUTHORITIES... iii CORPORATE DISCLOSURE STATEMENT... ix PRELIMINARY STATEMENT... 1 JURISDICTIONAL STATEMENT... 5 STATEMENT OF QUESTIONS PRESENTED... 6 STATEMENT OF THE CASE... 7 SUMMARY OF ARGUMENT STANDARD OF REVIEW ARGUMENT I. THE FEDERAL SECURITIES CLAIMS ARE TIME-BARRED BY FIVE-YEAR STATUTES OF REPOSE A. The Applicable Five-Year Time Bars Are Statutes Of Repose B. Plaintiffs Filed These Actions After The Deadline Mandated By The Five-Year Statutes Of Repose C. Statutes Of Repose Are Fundamentally Different From Statutes Of Limitation II. THE FIVE-YEAR STATUTES OF REPOSE ARE NOT SUBJECT TO TOLLING UNDER AMERICAN PIPE A. American Pipe Tolling Does Not Apply On Its Face B. American Pipe Tolling Is Equitable In Nature C. The District Court Erred In Ruling That American Pipe Tolling Is Legal In Nature i

4 Case: Document: Page: 4 Date Filed: 04/06/2016 III. Page WHETHER LEGAL OR EQUITABLE IN NATURE, AMERICAN PIPE TOLLING CANNOT BE APPLIED TO A STATUTE OF REPOSE UNDER THE RULES ENABLING ACT A. Applying American Pipe Tolling To A Statute Of Repose Would Impermissibly Modify Substantive Rights B. The District Court Erred In Ruling That American Pipe Tolling Of Statutes Of Repose Would Not Modify Substantive Rights C. American Pipe Tolling Does Not Re-Define When An Individual Action Is Filed In Federal Court IV. POLICY ARGUMENTS DO NOT OVERCOME THE DISPOSITIVE EFFECT OF THE STATUTE OF REPOSE A. Applying The Statute Of Repose Is Not Inefficient B. Applying The Statute Of Repose Is Not Unfair CONCLUSION ii

5 Case: Document: Page: 5 Date Filed: 04/06/2016 TABLE OF AUTHORITIES CASES iii Page(s) Albillo-De Leon v. Gonzales, 410 F.3d 1090 (9th Cir. 2005) American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974)...passim Angles v. Dollar Tree Stores, Inc., 494 F. App x. 326 (4th Cir. 2012) Ashcroft v. Iqbal, 556 U.S. 662 (2009) Augustis v. United States, 732 F.3d 749 (7th Cir. 2013) In re Bear Stearns Cos., Inc. Sec., Derivative, & ERISA Litig., 995 F. Supp. 2d 291 (S.D.N.Y. 2014) Bradford-White Corp. v. Ernst & Whinney, 872 F.2d 1153 (3d Cir. 1989) Bridges v. Dep t of Md. State Police, 441 F.3d 197 (4th Cir. 2006) Burlington N. & Santa Fe Ry. Co., Inc. v. Poole Chem. Co., Inc., 419 F.3d 355 (5th Cir. 2005) Casey v. Merck & Co., Inc., 653 F.3d 95 (2d Cir. 2011) Chardon v. Fumero Soto, 462 U.S. 650 (1983) Chesapeake Appalachia, LLC v. Scout Petroleum, LLC, 809 F.3d 746 (3d Cir. 2016)... 6 Cohen v. Telsey, No. 09-cv-2033, 2009 WL (D.N.J. Nov. 2, 2009)... 24

6 Case: Document: Page: 6 Date Filed: 04/06/2016 iv Page(s) Credit Suisse Sec. (USA) LLC v. Simmonds, 132 S. Ct (2012) Crown, Cork & Seal Co., Inc. v. Parker, 462 U.S. 345 (1983)... 40, 41 CTS Corp. v. Waldburger, 134 S. Ct (2014)...passim Del Sontro v. Cendant Corp., 223 F. Supp. 2d 563 (D.N.J. 2002) In re Exxon Mobil Corp. Sec. Litig., 500 F.3d 189 (3d Cir. 2007)...passim Fed. Hous. Fin. Agency v. UBS Ams. Inc., 712 F.3d 136 (2d Cir. 2013) First United Methodist Church of Hyattsville v. U.S. Gypsum Co., 882 F.2d 862 (4th Cir. 1989) Footbridge Ltd. Trust v. Countrywide Fin. Corp., 770 F. Supp. 2d 618 (S.D.N.Y. 2011) Greyhound Corp. v. Mt. Hood Stages, Inc., 437 U.S. 322 (1978) Hinkle by Hinkle v. Henderson, 85 F.3d 298 (7th Cir. 1996) Holland v. Florida, 560 U.S. 631 (2010)... 23, 26 Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736 (2014) Instituto De Prevision Militar v. Merrill Lynch, 546 F.3d 1340 (11th Cir. 2008) Irwin v. Dep t of Veterans Affairs, 498 U.S. 89 (1990) Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015)... 35

7 Case: Document: Page: 7 Date Filed: 04/06/2016 v Page(s) John Hancock Life Ins. Co. (USA) v. JP Morgan Chase & Co., 938 F. Supp. 2d 440 (S.D.N.Y. 2013)... 26, 29 Joosten v. United States, No. 95-cv-2491, 1996 WL (D.N.J. June 5, 1996) Joseph v. Wiles, 223 F.3d 1155 (10th Cir. 2000)... 30, 31 Kincade v. Gen. Tire & Rubber Co., 635 F.2d 501 (5th Cir. 1981) Korwek v. Hunt, 827 F.2d 874 (2d Cir. 1987) Kuwait Inv. Office v. Am. Int l Grp., Inc., No. 11-cv-8403, 2015 WL (S.D.N.Y. Sept. 10, 2015) Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350 (1991)... 3, 13, 17, 25 In re Lehman Bros. Sec. & ERISA Litig., 800 F. Supp. 2d 477 (S.D.N.Y. 2011) Lieberman v. Cambridge Partners, L.L.C., 432 F.3d 482 (3d Cir. 2005)... 3, 21, 33, 40 Lozano v. Montoya Alvarez, 134 S. Ct (2014) Luzadder v. Despatch Oven Co., 834 F.2d 355 (3d Cir. 1987) Margolies v. Deason, 464 F.3d 547 (5th Cir. 2006) Martinez v. Attorney General of U.S., 693 F.3d 408 (3d Cir. 2012) Mayfield v. Barr, 985 F.2d 1090 (D.C. Cir. 1993) McCann v. Hy-Vee, Inc., 663 F.3d 926 (7th Cir. 2011)... 18

8 Case: Document: Page: 8 Date Filed: 04/06/2016 vi Page(s) McKowan Lowe & Co., Ltd. v. Jasmine, Ltd., 295 F.3d 380 (3d Cir. 2002) Merck & Co., Inc. v. Reynolds, 559 U.S. 633 (2010)... 1, 17, 20 Ma v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 597 F.3d 84 (2d Cir. 2010) Norris v. Wirtz, 818 F.2d 1329 (7th Cir. 1987), overruled on other grounds, Short v. Belleville Shoe Mfg. Co., 908 F.2d 1385 (7th Cir. 1990) P. Stolz Family P ship L.P. v. Daum, 355 F.3d 92 (2d Cir. 2004)... 26, 37 In re Petrobras Sec. Litig., No. 15-cv-00093, ECF No. 27 (S.D.N.Y. Nov. 2, 2015) Pinter v. Dahl, 486 U.S. 622 (1988)... 36, 47 Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013), cert. granted, No , 134 S. Ct (Mar. 10, 2014), cert. dismissed as improvidently granted, 135 S. Ct. 42 (Sept. 29, 2014)...passim Premier Elec. Constr. Co. v. Nat l. Elec. Contractors Assoc., Inc., 814 F.2d 358 (7th Cir. 1987) Raie v. Cheminova, Inc., 336 F.3d 1278 (11th Cir. 2003) Ranke v. Sanofi-Synthelabo Inc., 436 F.3d 197 (3d Cir. 2006) In re Shenango Grp. Inc., 501 F.3d 338 (3d Cir. 2007) Simon v. FIA Card Servs., N.A., 732 F.3d 259 (3d Cir. 2013) Smith v. Bayer Corp., 131 S. Ct (2011)... 28

9 Case: Document: Page: 9 Date Filed: 04/06/2016 Page(s) Sperling v. Hoffmann-LaRoche, Inc., 24 F.3d 463 (3d Cir. 1994) State Farm Mut. Auto. Ins. Co. v. Boellstorff, 540 F.3d 1223 (10th Cir. 2008) Vaught v. Showa Denko K.K., 107 F.3d 1137 (5th Cir. 1997) Veltri v. Bldg. Serv. 32B-J Pension Fund, 393 F.3d 318 (2d Cir. 2004) Wade v. Danek Med., Inc., 182 F.3d 281 (4th Cir. 1999) Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 131 S. Ct (2011) Williams v. Wells Fargo Home Mortg., Inc., 410 F. App x 495 (3d Cir. 2011) Young v. United States, 535 U.S. 43 (2002)... 23, 28 Youngblood v. Dalzell, 925 F.2d 954 (6th Cir. 1991) STATUTES 15 U.S.C. 15b U.S.C. 77m U.S.C. 78aa U.S.C. 78j(b)...passim 15 U.S.C. 78t... 5, U.S.C. 78t-1...passim 28 U.S.C. 1292(b)... 1, 6, U.S.C vii

10 Case: Document: Page: 10 Date Filed: 04/06/2016 Page(s) 28 U.S.C U.S.C U.S.C. 1658(b)(1) U.S.C. 1658(b)(2)...passim 28 U.S.C. 2072(b)...passim 28 U.S.C. 2244(d)(2) OTHER AUTHORITIES 4 Charles A. Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE 1056 (4th ed. 2015)... 18, 24 Federal Rule of Appellate Procedure ix Federal Rule of Civil Procedure , 40 Federal Rule of Civil Procedure 12(b)(6) Federal Rule of Civil Procedure 23...passim MANUAL FOR COMPLEX LITIGATION (FOURTH) 31.6 (2004) Mark W. Friedman, Constrained Individualism In Group Litigation: Requiring Class Members To Make A Good Cause Showing Before Opting Out Of A Federal Class Action, 100 YALE L.J. 745 (1990) Note, Statutes of Limitations and Opting Out of Class Actions, 81 MICH. L. REV. 399 (1982) Wendy Gerwick Couture, Class-Action Tolling, Federal Common Law, and Securities Statutes of Repose: A Recommendation, 46 LOY. U. CHI. L.J. 525 (2015) viii

11 Case: Document: Page: 11 Date Filed: 04/06/2016 CORPORATE DISCLOSURE STATEMENT (Federal Rule of Appellate Procedure 26.1) Defendant-Appellant Merck & Co., Inc. is a publicly-traded corporation that has no parent corporation. No publicly-held corporation owns 10% or more of its stock. Effective November 3, 2009, Schering-Plough Corporation changed its name to Merck & Co., Inc. Defendant-Appellant MSP Distribution Services (C) LLC merged with and into Schering Corporation on May 1, Schering Corporation was renamed Merck Sharp & Dohme Corp., which is a direct, wholly-owned subsidiary of Merck & Co., Inc. Defendant-Appellant MSP Singapore Company LLC is a whollyowned subsidiary of MSD International GmbH, which is an indirect wholly-owned subsidiary of Merck & Co., Inc. ix

12 Case: Document: Page: 12 Date Filed: 04/06/2016 Defendants-Appellants respectfully submit this brief in support of their appeal from an Order of the U.S. District Court for the District of New Jersey (Wolfson, J.), denying their motions to dismiss the Complaints. (JA ) On February 11, 2016, this Court granted Defendants-Appellants petition for interlocutory review of the Order under 28 U.S.C. 1292(b). (JA ) PRELIMINARY STATEMENT The District Court s Order should be reversed because the federal securities claims asserted in these cases are time-barred as a matter of law. In November 2013 and January 2014, institutional investors who had opted out from two settled securities class actions filed complaints against Defendants that were mirror images of the class complaints brought in Plaintiffs assert claims under the Securities Exchange Act of 1934 (the Exchange Act ) for alleged misstatements that ended no later than January 30, 2008, and for alleged insider trading that occurred no later than May 1, Those claims are each subject to a statute of repose, which sets forth an unqualified bar on litigation after five years. See Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 650 (2010). It is undisputed that Plaintiffs in each of these cases filed their individual Complaints more than five years after the last alleged securities violation. Nonetheless, the District Court denied Defendants motions to dismiss the Complaints as time-barred, reasoning that the statutes of repose had been tolled 1

13 Case: Document: Page: 13 Date Filed: 04/06/2016 by the class actions under American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974). (JA ) The District Court erred for three principal reasons: First, the American Pipe tolling doctrine is inapplicable on its face. American Pipe allowed courts to toll certain statutes of limitation for members of a putative class who later seek to assert the same claims at issue in the class action. American Pipe invoked a judicial power to toll statutes of limitation on the ground that tolling was: (1) consistent with the purpose of Federal Rule of Civil Procedure 23, as it avoided needless filing of protective actions by class members who fear that class certification may be denied, and (2) not inconsistent with the statute of limitations in the Clayton Act, which is purely procedural and in no way affect[s] the substantive rights of individual litigants. 414 U.S. at & n.29. However, nothing in American Pipe suggests that judicial tolling of the antitrust statute of limitations would extend to the statutes of repose in the Exchange Act. Statutes of limitation are procedural devices that bar a remedy within a period of time after the cause of action accrues, typically based on when the plaintiff should have discovered its injury. By contrast, statutes of repose extinguish the underlying right to bring a cause of action within a period of time after the defendant acted, regardless of whether the plaintiff could have discovered the injury. As this Court has held, the statutes of repose in the Exchange Act 2

14 Case: Document: Page: 14 Date Filed: 04/06/2016 implicate the substantive rights of all parties by allowing defendants to put [even] wrongful conduct behind them and out of the law s reach. In re Exxon Mobil Corp. Sec. Litig., 500 F.3d 189, 200 (3d Cir. 2007); Lieberman v. Cambridge Partners, L.L.C., 432 F.3d 482, 490 (3d Cir. 2005). Although statutes of limitation are presumptively subject to judicial tolling, a statute of repose will not be tolled for any reason. CTS Corp. v. Waldburger, 134 S. Ct. 2175, (2014). See Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 363 (1991) (equitable tolling not applicable to statute of repose in the Securities Act of 1933). The District Court in this case purported to distinguish Lampf on the ground that American Pipe tolling is legal (rather than equitable ) in nature because it serves the purposes of Federal Rule of Civil Procedure 23. But nothing in American Pipe s invocation of judicial tolling as consistent with the purpose underlying Rule 23 makes class action tolling a statutory rule. In fact, Rule 23 says nothing about tolling. Thus, the U.S. Supreme Court, Second Circuit, Fourth Circuit, Sixth Circuit, Eleventh Circuit, and many district courts have characterized American Pipe tolling as judge-made equitable tolling, which is incompatible with a statute of repose. Second, even if American Pipe tolling had a legal derivation in Federal Rule of Civil Procedure 23, the Rules Enabling Act guarantees that the Federal Rules of Civil Procedure shall not be used or interpreted to abridge, 3

15 Case: Document: Page: 15 Date Filed: 04/06/2016 enlarge or modify any substantive right. 28 U.S.C. 2072(b). Because the running of the statute of repose extinguishes a plaintiff s cause of action and confers on defendants the substantive right to put past events behind them, using American Pipe tolling to preserve that cause of action would enlarge Plaintiffs substantive rights and abridge Defendants substantive rights. See Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95, 109 (2d Cir. 2013), cert. granted, No , 134 S. Ct (Mar. 10, 2014), cert. dismissed as improvidently granted, 135 S. Ct. 42 (Sept. 29, 2014). For this independently dispositive reason, the Rules Enabling Act precludes tolling the statutes of repose. The District Court declined to follow the Second Circuit s holding in IndyMac on the ground that the class actions preceding these opt-out cases put Defendants on notice that Plaintiffs might bring suit more than five years after the alleged fraud. This was legal error. The statutes of repose gave Plaintiffs an absolute time limit of five years to bring an action in court. See 28 U.S.C. 1658(b)(2); 15 U.S.C. 78t-1(b)(4). That statutory mandate contains no exception based on notice that a plaintiff might take longer to bring an action. And while notice considerations may be relevant to the objectives of a statute of limitations, judicial implication of a notice exception is antithetical to the statute of repose. Finally, the District Court incorrectly adopted Plaintiffs policy argument that applying the statutes of repose without tolling would undermine the 4

16 Case: Document: Page: 16 Date Filed: 04/06/2016 goal of judicial economy and frustrate the ability of class members to opt out of class action lawsuits. Policy arguments cannot toll a statute of repose. Moreover, the arguments Plaintiffs advance are not sound policy. Even if more institutional investors file individual claims within the five-year statutory window, district courts are well equipped to manage multiple litigations efficiently, such as by consolidating or coordinating individual cases with parallel class actions. It is the institution of lawsuits after the class action has terminated that creates real burdens. Rather than proceed alongside the Vytorin Class Actions from 2008 to 2013 when documents were produced, witnesses were deposed, motions were decided, and trial preparations were completed Plaintiffs now seek to bring four new lawsuits asserting virtually identical claims before a different district judge. If anything threatens the judicial system with duplicative discovery and wasteful motion practice, it is the seriatim litigation that these cases represent. For these reasons and those discussed further below, the District Court s Order denying Defendants motion to dismiss Plaintiffs federal securities claims should be reversed. JURISDICTIONAL STATEMENT These lawsuits assert claims under Sections 10(b), 20(a) and 20A of the Exchange Act, as well as a pendent claim for common law fraud. The District Court had jurisdiction over these actions pursuant to Section 27 of the Exchange Act, 15 U.S.C. 78aa, and 28 U.S.C. 1331, 1337, and

17 Case: Document: Page: 17 Date Filed: 04/06/2016 On January 7, 2016, the District Court certified for interlocutory appeal its August 26, 2015 Order denying Defendants motions to dismiss under 28 U.S.C. 1292(b). (JA ) Eight days later, on January 15, 2016, Defendants filed timely petitions for interlocutory review of the District Court s Order. (Misc. Dkt. Nos , , , (3d Cir.).) This Court granted Defendants petitions to appeal on February 11, (JA ) Accordingly, this Court has jurisdiction to review the certified Order pursuant to the Interlocutory Appeals Act, 28 U.S.C. 1292(b). See, e.g., Chesapeake Appalachia, LLC v. Scout Petroleum, LLC, 809 F.3d 746, (3d Cir. 2016). STATEMENT OF QUESTIONS PRESENTED The central question presented by this appeal is whether a class action tolling principle that applies to certain statutes of limitation may be extended to the five-year statutes of repose that govern claims under the Exchange Act a matter on which the courts of appeals are divided and this Court has never ruled. Pursuant to 28 U.S.C. 1292(b), the District Court certified for immediate appeal, and this Court agreed to consider, two controlling questions of law: (1) Whether the tolling rule set forth in American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) is legal or equitable in nature; and (2) Whether interpreting American Pipe tolling to extend the fiveyear statutes of repose under the Exchange Act would abridge Defendants substantive rights, enlarge Plaintiffs substantive rights, or otherwise modify any 6

18 Case: Document: Page: 18 Date Filed: 04/06/2016 substantive right within the meaning of the Rules Enabling Act, 28 U.S.C. 2072(b). (JA ) STATEMENT OF THE CASE Defendant Merck & Co., Inc. ( Merck ) is a global pharmaceutical company whose principal place of business is located in New Jersey. In November 2009, Merck & Co., Inc. merged with Schering-Plough Corporation ( Schering ). The other defendants are individuals and entities presently or formerly affiliated with Merck or Schering. Plaintiffs are institutional investors that claim to have purchased Merck or Schering stock between January 2007 and March This case concerns a clinical trial that was designed to test the efficacy of a cholesterol-lowering drug, Vytorin, in reducing the thickness of the carotid arteries. Vytorin was developed and marketed by a joint venture between Schering and Merck. One of the clinical trials conducted with respect to Vytorin, known as the ENHANCE trial, examined the effectiveness of Vytorin relative to another cholesterol-lowering drug (Zocor), in reducing the intima-media thickness of the carotid arterial wall in a select group of patients See JA ( North Sound Schering Cmplt. ), at 1, 18-24, Exs. A-C; JA ( GIC Schering Cmplt. ), at 1, 18-22; JA ( GIC Merck Cmplt. ), at 1, 5, 21-25; JA ( North Sound Merck Cmplt. ), at 1, 5, 21-26, Exs. A-B. See North Sound Schering Cmplt. 5, 41; GIC Schering Cmplt. 5, 39; GIC Merck Cmplt. 37, 48, 55, 57, 59; North Sound Merck Cmplt. 38, 49, 56, 58, 60. 7

19 Case: Document: Page: 19 Date Filed: 04/06/2016 On January 14, 2008, Defendants published a news release disclosing (among other things) that there was no statistically significant difference between treatment groups on the primary endpoint of the ENHANCE trial i.e., that Vytorin did not reduce or slow the progression of the thickness in the walls of the carotid arteries significantly more than Zocor alone. 3 On March 30, 2008, the ENHANCE results were presented and debated at a scientific conference. 4 After the price of Merck and Schering stock dropped on March 31, 2008, private plaintiffs filed class action lawsuits alleging that their losses were not part of the risk properly borne by shareholders, but rather the result of fraud. The class action cases were litigated in the District of New Jersey before Judge Dennis M. Cavanaugh from 2008 to A settlement of the Vytorin Class Actions was publicly announced on February 14, 2013, and approved by Judge Cavanaugh in judgments entered on October 1, See North Sound Schering Cmplt. 118, 298, 313; GIC Schering Cmplt. 116, 296, 311; GIC Merck Cmplt. 171, 311; North Sound Merck Cmplt. 172, 312. See North Sound Schering Cmplt. 140, 307, 319; GIC Schering Cmplt. 138, 305, 317; GIC Merck Cmplt. 15, ; North Sound Merck Cmplt. 15, See In re Schering-Plough Corporation/ENHANCE Sec. Litig., No. 08-cv-397 (D.N.J.) ( Schering Vytorin Class Action ), JA ; In re Merck & Co., Inc. Vytorin/Zetia Sec. Litig., No. 08-cv-2177 (D.N.J.) ( Merck Vytorin Class Action ), JA See Schering Vytorin Class Action, ECF No. 440; Merck Vytorin Class Action, ECF No

20 Case: Document: Page: 20 Date Filed: 04/06/2016 On November 14, 2013, Plaintiffs who opted out of the Schering Vytorin Class Action settlement brought the two present actions against Schering, with Merck named as successor. On January 14, 2014, Plaintiffs who opted out of the Merck Vytorin Class Action settlement brought the two present actions against Merck directly. (JA 0009, , 0045, 0050, ) The four opt-out Complaints are virtual carbon copies of the consolidated complaints filed in the Vytorin Class Actions. 7 As in the Vytorin Class Actions, Plaintiffs assert claims under Sections 10(b), 20(a), and 20A of the Exchange Act. Based on the same factual allegations, they also add a claim for common-law fraud under New Jersey law. (JA 0009.) Other than the handful of institutional investors who are parties to this appeal, no other shareholder of Merck or Schering opted out of the class settlements and filed an individual lawsuit concerning Vytorin or the ENHANCE trial. The following chart summarizes the timeline of relevant key events: May 1, 2007 November 19, 2007 January 14, 2008 Schering Defendants last alleged insider trade. Schering Defendants last alleged misrepresentation to investors. Merck and Schering publicly disclose the failure of the ENHANCE trial to meet its primary endpoint. 7 See Schering Vytorin Class Action, ECF No. 52; Merck Vytorin Class Action, ECF No The opt-out Complaints were marked as related to the Vytorin Class Actions, but assigned to Judge Freda L. Wolfson in light of Judge Cavanaugh s retirement. (JA 0231, JA , JA 0610, JA 0807.) 9

21 Case: Document: Page: 21 Date Filed: 04/06/2016 January 18, 2008 The first putative class action complaint is filed against Schering. January 30, 2008 Merck Defendants last alleged misrepresentation to investors. March 30, 2008 The ENHANCE results are debated at a scientific conference, causing Merck and Schering stock prices to drop. May 5, 2008 The first putative class action complaint is filed against Merck The Vytorin Class Actions are litigated before Judge Cavanaugh. Millions of pages of documents are produced; dozens of witnesses are deposed; motions to dismiss, discovery motions, class certification motions, and summary judgment motions are decided; joint pre-trial statements, proposed jury instructions, verdict forms, and other trial preparations are completed. February 14, 2013 Proposed settlements of the Vytorin Class Actions are publicly announced, only weeks before a scheduled trial. October 1, 2013 Judge Cavanaugh gives final approval to the Vytorin Class Action Settlements and enters Final Judgments. November 14, 2013 Plaintiffs-Appellees file two copycat Complaints against Merck as successor to Schering, nearly six years after the last alleged securities violation. The Schering opt-out cases are assigned to Judge Freda Wolfson. January 14, 2014 Plaintiffs-Appellees file two copycat Complaints against Merck, nearly six years after the last alleged securities violation. The Merck opt-out cases are assigned to Judge Freda Wolfson. 10

22 Case: Document: Page: 22 Date Filed: 04/06/2016 On November 17, 2014, Defendants served motions to dismiss the opt-out Complaints as barred by the five-year statutes of repose that govern claims under Sections 10(b), 20(a), and 20A of the Exchange Act. Defendants also moved to dismiss the common-law fraud claim for failure to plead the element of reliance required under New Jersey law. Plaintiffs served oppositions to those motions on January 9, The motions were fully briefed and filed in the District Court on January 30, (JA , , , 0053.) On August 26, 2015, Judge Wolfson denied Defendants motions to dismiss. The District Court ruled that the five-year limitations periods that govern Plaintiffs federal securities claims are statute[s] of repose. See JA (citing 28 U.S.C. 1658(b)(2); 15 U.S.C. 78t-1(b)(4)). The District Court also recognized that Plaintiffs federal securities claims would be time-barred but for the application of American Pipe tolling to the statutes of repose. (JA ) However, the District Court made two legal rulings that, taken together, led it to accept Plaintiffs federal securities claims as timely: (1) class action tolling under American Pipe represents a form of legal, rather than equitable, tolling, and (2) applying American Pipe tolling to extend the five-year statutes of repose would not abridge, enlarge, or modify any substantive right under the Rules Enabling Act. (JA ) The District Court also concluded that Plaintiffs had adequately 11

23 Case: Document: Page: 23 Date Filed: 04/06/2016 pled the element of reliance for purposes of surviving a motion to dismiss the common-law fraud claim. (JA ) On September 30, 2015, Defendants asked the District Court to certify the statute of repose question to this Court under 28 U.S.C. 1292(b). (JA 0036, 0042, 0047, 0052.) After full briefing, the District Court granted Defendants motion for Section 1292(b) certification on January 7, (JA ) On January 15, 2016, Defendants petitioned this Court for leave to file an interlocutory appeal. On January 28, 2016, Plaintiffs filed an Answer opposing Defendants petition. On February 11, 2016, this Court granted permission for Defendants to appeal pursuant to 28 U.S.C. 1292(b). (JA ) SUMMARY OF ARGUMENT The federal securities claims asserted in these cases are time-barred. As the District Court properly determined, each of those claims is subject to a fiveyear statute of repose, and Plaintiffs filed their individual Complaints more than five years after completion of the alleged fraud. The District Court erred, however, in holding that the statutes of repose were tolled by the pendency of the Vytorin Class Actions under American Pipe. That case merely decided that class action tolling was consistent with a particular statute of limitations. The Supreme Court has never extended American Pipe tolling to a statute of repose, which provides certainty for litigants and courts that claims not asserted within a fixed statutory window are beyond the law s 12

24 Case: Document: Page: 24 Date Filed: 04/06/2016 reach. In fact, the Supreme Court has held that a statute of repose cannot be tolled for any reason. Because American Pipe tolling is a form of judicial tolling, it cannot apply to the statutes of repose at issue here. The District Court, like some other lower courts, ruled that American Pipe provides a form of legal tolling that applies even to statutes of repose. The Supreme Court has not used the term legal tolling to designate situations in which a statute of repose may be properly tolled, such as where a statute expressly provides for tolling. Instead, the Supreme Court has explained that a statute of repose is a judgment that defendants should be free from liability after the legislatively determined period of time, beyond which liability will no longer exist and will not be tolled for any reason. Waldburger, 134 S. Ct. at 2183; see also Lampf, 501 U.S. at 363 (A period of repose is inconsistent with tolling, and we hold that tolling principles do not apply to that period. ). Moreover, even if American Pipe tolling had a legal basis in Federal Rule of Civil Procedure 23, the Rules Enabling Act mandates that procedural rules shall not abridge, enlarge or modify any substantive right. 28 U.S.C. 2072(b). It is well established that a statute of repose extinguishes the plaintiff s cause of action and confers on defendants substantive rights to put past events behind them. Using American Pipe tolling to preserve or revive an otherwise expired cause of 13

25 Case: Document: Page: 25 Date Filed: 04/06/2016 action would abridge Defendants substantive rights and enlarge Plaintiffs substantive rights, in violation of the Rules Enabling Act. Finally, public policy arguments cannot override the statute of repose. In any event, as this case illustrates, Plaintiffs are wrong when they contend that it would be inefficient and unfair to enforce the statute of repose as written. Rather than filing suit within the five-year repose period and coordinating their cases with the discovery and briefing in the class actions, Plaintiffs now seek to start over with four new cases before a different district judge. Seriatim litigation of the kind represented by these lawsuits would burden the entire judicial system with inefficiency, and unfairly deprive defendants of their statutory right to repose. STANDARD OF REVIEW On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a district court is required to accept as true the well-pleaded allegations in the complaint. See Simon v. FIA Card Servs., N.A., 732 F.3d 259, 264 (3d Cir. 2013). To survive such a motion, the complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). Courts will dismiss cases on statute of repose grounds where it is clear from the face of the complaints that the claims are time-barred. See, e.g., Ranke v. Sanofi- Synthelabo Inc., 436 F.3d 197, (3d Cir. 2006) (affirming dismissal of complaint where claims were time-barred under statute of repose). 14

26 Case: Document: Page: 26 Date Filed: 04/06/2016 This appeal of the District Court s Order denying Defendants motions to dismiss the Complaints as time-barred raises pure questions of law. Questions of law are subject to de novo plenary review. See Martinez v. Attorney General of U.S., 693 F.3d 408, 411 (3d Cir. 2012) ( We review de novo questions of law. ); In re Shenango Grp. Inc., 501 F.3d 338, 346 (3d Cir. 2007) (noting appropriate role of [the] Court to review de novo pure questions of law ). ARGUMENT I. THE FEDERAL SECURITIES CLAIMS ARE TIME- BARRED BY FIVE-YEAR STATUTES OF REPOSE Plaintiffs federal securities claims are time-barred as a matter of law. Each of those claims is subject to a five-year statute of repose under the Exchange Act, and it is clear from the face of the Complaints that Plaintiffs waited more than five years after completion of the alleged fraud to file these lawsuits. A. The Applicable Five-Year Time Bars Are Statutes Of Repose The timeliness of Plaintiffs claims under Sections 10(b) and 20(a) of the Exchange Act is governed by 28 U.S.C. 1658(b), which provides: [A] private right of action that involves a claim of fraud, deceit, manipulation, or contrivance in contravention of a regulatory requirement concerning the securities laws [defined to include the Exchange Act]... may be brought not later than the earlier of (1) 2 years after the discovery of the facts constituting the violation; or (2) 5 years after such violation. 15

27 Case: Document: Page: 27 Date Filed: 04/06/2016 This statutory structure pairs a two-year limitations period containing a built-in discovery rule, with a five-year statute of repose providing an outer bound on the time to bring a private right of action. The juxtaposition of those two time bars one flexible, the other fixed reflects a deliberate legislative cutoff of liability five years after the defendant acted, regardless of whether the plaintiff could have discovered the cause of action. While the two-year period runs from a plaintiff s discovery of the alleged violation, the five-year period runs from a specified time since the defendant acted. In re Exxon Mobil Corp. Sec. Litig., 500 F.3d 189, 194 n.6 (3d Cir. 2007). 8 As this Court has held, the two-year period under Section 1658(b)(1) is a statute of limitations, and the five-year period under Section 1658(b)(2) is a statute of repose. Exxon Mobil, 500 F.3d at 195, (recognizing a twoyear statute of limitations and a five-year statute of repose ). The U.S. Supreme Court has recently confirmed that Congress prescribed an unqualified bar on 8 Congress enacted a parallel structure in Section 13 of the Securities Act of 1933, which contains a one-year statute of limitations and a three-year statute of repose. See 15 U.S.C. 77m ( No action shall be maintained to enforce any liability created under section 77k or 77l(a)(2) of this title unless brought within one year after the discovery of the untrue statement or the omission, or after such discovery should have been made by the exercise of reasonable diligence.... In no event shall any such action be brought to enforce a liability created under section 77k or 77l(a)(1) of this title more than three years after the security was bona fide offered to the public, or under section 77l(a)(2) of this title more than three years after the sale. ). 16

28 Case: Document: Page: 28 Date Filed: 04/06/2016 actions instituted 5 years after [the] violation, 1658(b)(2), giving defendants total repose after five years. Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 650 (2010). Plaintiffs also assert a claim under Section 20A of the Exchange Act. That statute provides: No action may be brought under this section more than 5 years after the date of the last transaction that is the subject of the violation. 15 U.S.C. 78t-1(b)(4). This categorical cutoff, like the one applicable to Section 10(b) and 20(a) claims, is a statute of repose. Thus, the Supreme Court has referred to it as the 5-year statute of repose specified in 20A of the 1934 Act. Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 355 (1991). B. Plaintiffs Filed These Actions After The Deadline Mandated By The Five-Year Statutes Of Repose Whereas a statute of limitations runs from the date a claim accrues, a repose period runs from the date of the defendants last culpable act or omission regardless of whether the plaintiffs injury has been discovered or has even occurred. See CTS Corp. v. Waldburger, 134 S. Ct. 2175, 2182, 2187 (2014). In In re Exxon Mobil Corp. Securities Litigation, this Court explained that statutes of limitation begin to run when all elements of a cause of action have occurred and a reasonable person should have discovered that claim, while statutes of repose start upon the occurrence of a specific event and may expire before a plaintiff 17

29 Case: Document: Page: 29 Date Filed: 04/06/2016 discovers he has been wronged or even before damages have been suffered at all. 500 F.3d at Thus, the repose period under 28 U.S.C. 1658(b)(2) begins to run on the date of the [last] alleged misrepresentation. Exxon Mobil, 500 F.3d at 200; see also McCann v. Hy-Vee, Inc., 663 F.3d 926, 932 (7th Cir. 2011) ( violation that triggers the statute of repose under Section 1658(b) is the alleged misrepresentation). Under section 20A, the transaction that is the subject of the violation is purchasing or selling a security while in possession of material, nonpublic information. 15 U.S.C. 78t-1(a), (b)(4). Here, the last misrepresentation alleged in the Schering Complaints occurred on November 19, 2007, and the last misrepresentation alleged in the Merck Complaints occurred on January 30, (JA 0007, 0025.) The last alleged insider trade was made on May 1, (JA 0007, 0026.) Thus, the statute of repose expired on November 19, 2012 for the misrepresentation claims against Schering, on January 30, 2013 for the misrepresentation claims against Merck, and on May 1, 2012 for the insider trading claims. Plaintiffs, however, did 9 See also 4 Charles A. Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE 1056 (4th ed. 2015) ( Although the commencement date for the applicable statute of limitations may be deferred and hinge upon the injured party s discovery of the existence of the cause of action, the point of commencement for the applicable statute of repose is commonly the date of the last act or omission that caused the plaintiff s injury. ). 18

30 Case: Document: Page: 30 Date Filed: 04/06/2016 not file their Complaints against Merck as successor to Schering until November 14, 2013, and did not file their Complaints against Merck in its own right until January 14, 2014 a year late for the misrepresentation claims, and 18 months late for the insider trading claims. Indeed, even assuming that the statute of repose began to run when Plaintiffs allege the fraud was completely corrected and the full and detailed ENHANCE results were revealed to the public March 30, 2008 Plaintiffs still commenced these actions seven to nine months beyond the five-year time limit. 10 C. Statutes Of Repose Are Fundamentally Different From Statutes Of Limitation Statutes of limitation create an affirmative defense in cases where the plaintiff fails to bring suit within a period of time after the cause of action accrued. As such, statutes of limitation are procedural devices that bar a legal remedy. See Ma v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 597 F.3d 84, 88 n.4 (2d Cir. 2010); Margolies v. Deason, 464 F.3d 547, 551 (5th Cir. 2006); Bradford-White Corp. v. Ernst & Whinney, 872 F.2d 1153, 1161 (3d Cir. 1989). A statute of repose by contrast is substantive. It extinguishes any right to bring any type of cause of action against a party, regardless of whether 10 See North Sound Schering Cmplt. 1, 11, 38, 42, 45, 67, 71, , 138, 140, 307, ; GIC Schering Cmplt. 1, 11, 36, 40, 43, 65, 69, , 136, 138, 305, ; GIC Merck Cmplt. 15, 162, 196, , 449; North Sound Merck Cmplt. 15, 163, 197, ,

31 Case: Document: Page: 31 Date Filed: 04/06/2016 such action has accrued. Augustis v. United States, 732 F.3d 749, (7th Cir. 2013). See also Albillo-De Leon v. Gonzales, 410 F.3d 1090, 1097 & n.5 (9th Cir. 2005) ( A statute of repose, like a jurisdictional prerequisite, extinguishes a cause of action after a fixed period of time. ); Hinkle by Hinkle v. Henderson, 85 F.3d 298, 301 (7th Cir. 1996) ( This Court has stated that statutes of limitations are procedural, barring only the remedy, while statutes of repose are substantive, extinguishing the right to bring a cause of action. ). In Police & Fire Retirement System of the City of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013), the Second Circuit explained that a statute of repose unlike a statute of limitations is an absolute cut-off that extinguishes a plaintiff s cause of action and creates a substantive right [for defendants] to be free from liability after a legislatively-determined period of time. Id. at 106 (emphasis in original). Because statutes of repose affect the underlying right, not just the availability of remedies, they run without interruption once the necessary triggering event has occurred. Id. (internal quotation marks omitted). The Second Circuit s observation in IndyMac was squarely within the teachings of the U.S. Supreme Court that, after a date certain, statutes of repose entitle the defendant to put past events behind him by providing a fresh start or freedom from liability. Waldburger, 134 S. Ct. at 2183; see also Reynolds, 559 U.S. at 650 (five-year time limit under the Exchange Act gives defendants total repose ). 20

32 Case: Document: Page: 32 Date Filed: 04/06/2016 The Second Circuit s understanding of the nature of statutes of repose is also consistent with that of this Court. For example, in concluding that federal securities fraud claims had been extinguished by a statute of repose, this Court recognized that statutes of repose affect substantive rights of plaintiffs and defendants alike. Lieberman v. Cambridge Partners, L.L.C., 432 F.3d 482, (3d Cir. 2005). By their nature, statutes of repose may impose on plaintiffs the hardship of having a claim extinguished before it is discovered, or perhaps before it even exists. Luzadder v. Despatch Oven Co., 834 F.2d 355, 358 (3d Cir. 1987) (quoting William Keeton, et al., PROSSER AND KEETON ON THE LAW OF TORTS 30, at 168 (5th ed. 1984)). Likewise, statutes of repose reflect a legislative judgment that there comes a time when allowing defendants to put their wrongful conduct behind them and out of the law s reach is more important than providing those wronged with a legal remedy, even if the victims never had the opportunity to pursue one. Exxon Mobil, 500 F.3d at II. THE FIVE-YEAR STATUTES OF REPOSE ARE NOT SUBJECT TO TOLLING UNDER AMERICAN PIPE Plaintiffs nonetheless argue and the District Court agreed that the five-year statutes of repose under the Exchange Act were tolled by the Vytorin Class Actions under American Pipe. This is incorrect for two threshold reasons. First, American Pipe tolling does not apply on its face because that case concerned 21

33 Case: Document: Page: 33 Date Filed: 04/06/2016 a particular statute of limitations, and its holding does not extend to statutes of repose. Second, American Pipe invoked judicial tolling, and a statute of repose cannot be tolled without express statutory license. It is undisputed on this appeal that no statutory text tolls the five-year repose period. A. American Pipe Tolling Does Not Apply On Its Face In American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974), the U.S. Supreme Court held that the filing of a class action complaint tolled a statute of limitations for members of a putative class who later sought to intervene by asserting the same antitrust claims at issue in the class action. American Pipe addressed a particular time bar, the Clayton Act s four-year statute of limitations, which runs from the date the cause of action accrued, 15 U.S.C. 15b, and is suspended during related suits brought by the federal government, id. 16(b), recodified as amended at 15 U.S.C. 16(i) (Pub. L. No (1974), Pub. L. No (1976)). Neither the four-year statute of limitations following accrual, nor the suspension provision tolling that statute of limitations for a government action, reflects a repose period that runs from the date the defendant acted. Citing legislative history that the Clayton Act s statute of limitations was strictly a procedural limitation that would in no way affect the substantive rights of individual litigants, the American Pipe court concluded that tolling during the pendency of a class action was not inconsistent with the legislative scheme set forth in the Clayton Act. American Pipe, 414 U.S. at & n

34 Case: Document: Page: 34 Date Filed: 04/06/2016 Importantly, American Pipe interpreted a particular statute of limitations, considered whether tolling was consistent with that statute of limitations, and expressly limited its holding to the statute of limitations. See, e.g., 414 U.S. at 558 (invoking a judicial power to toll statutes of limitation ); id. at 554 ( the commencement of a class action suspends the applicable statute of limitations ); id. at 559 ( the statute of limitations is tolled under certain circumstances not inconsistent with the legislative purpose ). In each case, the Court explained, the ultimate question is whether tolling the limitation in a given context is consonant with the legislative scheme. Id. at 558. Wholly unlike the statute of limitations at issue in American Pipe, tolling is antithetical to the statute of repose at issue here, and thus would not be consonant with the legislative scheme of the Exchange Act. As American Pipe illustrates, courts presume that tolling applies to a statute of limitations. See Lozano v. Montoya Alvarez, 134 S. Ct. 1224, 1232 (2014). 11 By contrast, courts prohibit tolling a statute of repose. See, e.g., IndyMac, 721 F.3d at 106 (A statute of repose is subject only to legislatively created exceptions, and not to judgemade tolling.); First United Methodist Church of Hyattsville v. U.S. Gypsum Co., 882 F.2d 862, 866 (4th Cir. 1989) (As substantive grants of immunity, statutes of 11 See also Holland v. Florida, 560 U.S. 631, (2010) (A nonjurisdictional federal statute of limitations is presumptively subject to equitable tolling.); Young v. United States, 535 U.S. 43, (2002) (A statute of limitations is customarily subject to equitable tolling.). 23

35 Case: Document: Page: 35 Date Filed: 04/06/2016 repose will not [be] tolled for any reason because to do so would upset the economic balance struck by the legislative body. ); In re Bear Stearns Cos., Inc. Sec., Derivative, & ERISA Litig., 995 F. Supp. 2d 291, (S.D.N.Y. 2014) ( [T]olling is never consonant with a statute of repose because tolling would violate a defendant s substantive rights. ); Cohen v. Telsey, No. 09-cv-2033, 2009 WL , at *9 (D.N.J. Nov. 2, 2009) ( [T]olling principles do not apply to the five-year statute of repose. ); 4 Charles A. Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE 1056 (4th ed. 2015) ( [A] repose period is fixed and its expiration will not be delayed by estoppel or tolling. ). As the U.S. Supreme Court recently reaffirmed, after the legislatively determined period of time for a statute of repose, liability will no longer exist and will not be tolled for any reason. Waldburger, 134 S. Ct. at 2183 (emphasis added). This result is consistent with the statutes of repose that govern Plaintiffs federal securities claims: the text of the five-year statutes of repose provides an absolute outer limit on the time for bringing a private right of action, and the legislative history confirms that the outer limit cannot be tolled. See 28 U.S.C. 1658(b)(2) (codifying Section 804(a) of the Sarbanes-Oxley Act of 2002, Pub. L. No , 804(a), 116 Stat. 745, 801 (2002)); S. Rep. No , at 29 (2002) ( Where there is a bifurcated limitations period, with an inner limit running from the time when the fraud was or should have been discovered, the 24