501 U.S. 350 (U.S. Supreme Court 1991)
Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson is a cornerstone in securities litigation because it resolved a longstanding circuit split over how to time-bar private actions under §10(b) of the Securities Exchange Act and SEC Rule 10b-5.
What is the proper statute of limitations for private §10(b)/Rule 10b-5 securities-fraud actions, and is the outer period subject to equitable tolling? Additionally, should the rule be applied to the parties before the Court (and, by implication, retroactively to pending cases)?
For private actions implied under §10(b) and Rule 10b-5, the uniform federal limitations period is one year after the plaintiff discovers (or should have discovered) the facts constituting the violation, but in no event more than three years after the violation. The three-year period is a statute of repose not subject to equitable tolling. The Court applies this rule to the case before it.
The Supreme Court held that private §10(b)/Rule 10b-5 actions must be filed within one year of discovery and no more than three years after the violation; the three-year period is a repose period that cannot be equitably tolled. Applying this rule to the case, respondents' claims were time-barred. The judgment of the Ninth Circuit was reversed.
Lampf unified the statute of limitations for private §10(b)/Rule 10b-5 suits nationwide, curbing forum shopping and providing predictable time bars for investors and market participants. Its most enduring contribution is the classification of the outside three-year cutoff as a statute of repose, a concept later echoed and reinforced in decisions addressing other securities regimes. The immediate practical impact was dramatic: many pending 10b-5 cases were dismissed as untimely when measured against the newly uniform rule applied retroactively. Congress quickly reacted by enacting Section 27A of the Exchange Act to mitigate the retroactive effect for certain pending cases and, a decade later, by extending the limitations to two years after discovery and five years after the violation for private securities-fraud actions under 28 U.S.C. §1658(b) (Sarbanes–Oxley Act of 2002). Even with those statutory changes, Lampf remains pivotal for its federal-borrowing analysis, its emphasis on uniformity, and its clear demarcation between statutes of limitations and statutes of repose in securities litigation.