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Subject: 90-333 -- DISSENT, LAMPF v. GILBERTSON




    SUPREME COURT OF THE UNITED STATES


No. 90-333



LAMPF, PLEVA, LIPKIND, PRUPIS & PETIGROW, PETITIONER v. JOHN GILBERTSON et
al.

on writ of certiorari to the united states court of appeals for the ninth
circuit

[June 20, 1991]



    Justice Stevens, with whom Justice Souter joins, dissenting.

    In my opinion the Court has undertaken a lawmaking task that should
properly be performed by Congress.  Starting from the premise that the
federal cause of action for violating MDRV 10(b) of the Securities Exchange
Act of 1934, 48 Stat. 891, 15 U. S. C. MDRV 78j(b), was created out of
whole cloth by the judiciary, it concludes that the judiciary must also
have the authority to fashion the time limitations applicable to such an
action.  A page from the history of MDRV 10(b) litigation will explain why
both the premise and the conclusion are flawed.
    The private cause of action for violating MDRV 10(b) was first
recognized in, Kardon v. National Gypsum Co., 69 F. Supp. 512 (ED Pa.
1946).  In recognizing this implied right of action, Judge Kirkpatrick
merely applied what was then a wellsettled rule of federal law.  As was
true during most of our history, the federal courts then presumed that a
statute enacted to benefit a special class provided a remedy for those
members injured by violations of the statute.  See Texas and Pacific R. Co.
v. Rigsby, 241 U. S. 33, 39-40. (1916). {1}  Judge Kirkpatrick did not make
"new law" when he applied this presumption to a federal statute enacted for
the benefit of investors in securities that are traded in interstate
commerce.
    During the ensuing four decades of administering MDRV 10(b) litigation,
the federal courts also applied settled law when they looked to state law
to find the rules governing the timeliness of claims.  See Del Costello v.
International Brotherhood of Teamsters, 462 U. S. 151, 172-173 (1983)
(Stevens, J., dissenting). {2}  It was not until 1988, that a federal court
decided that it would be better policy to have a uniform federal statute of
limitations apply to claims of this kind.  See In re Data Access System
Security Litigation, 843 F. 2d 1537 (CA3).  I agree that such a uniform
limitations rule is preferable to the often chaotic traditional approach of
looking to the analogous state limitation.  I believe, however, that
Congress, rather than the federal judiciary, has the responsibility for
making the policy determinations that are required in rejecting a rule
selected under the doctrine of state borrowing, long applied in MDRV 10(b)
cases, and choosing a new limitations period and its associated tolling
rules. {3}  When a legislature enacts a new rule of law governing the
timeliness of legal action, it can -- and usually does -- specify the
effective date of the rule and determine the extent to which it shall apply
to pending claims.  See e. g., 104 Stat. 5114, quoted ante, at 13, n. 8.
When the Court ventures into this lawmaking arena, however, it inevitably
raises questions concerning the retroactivity of its new rule that are
difficult and arguably inconsistent with the neutral, non-policy making
role of the judge.  See Chevron Oil Co. v. Hudson, 404 U. S. 97 (1971); In
re Data Access, 843 F. 2d, at 1551 (Seitz J., dissenting).
    The Court's rejection of the traditional rule of applying a state
limitations period when the federal statute is silent is not justified by
this Court's prior cases.  Despite the majority's recognition of the
traditional rule, ante, at 4-5, it effectively repudiates it by holding
that "only where no analogous counterpart [within the statute] is available
should a court then proceed to apply state-borrowing principles."  Ante, at
8.  The Court's principal justification for this departure is that it took
similar action in Del Costello, supra.  I registered my dissent in that
case for reasons similar to those I express today.  In that case there was
nothing in the statute to lead me to believe that Congress intended to
depart from our settled practice of looking to analogous state limitations.
Id., at 171-173.  Likewise in this case, I can find nothing in the
Securities Act of 1934 that leads me to believe that Congress intended us
to depart from our traditional rule and overrule four decades of
established law.
    The other case on which the Court primarily relies, Agency Holding
Corp. v. Malley-Duff & Associates, 483 U. S. 143 (1987), is distinguishable
from this case.  Agency Holding, did not involve a change in a rule of law
that had been settled for forty years.  Furthermore in that case, the Court
found an explicit intent to pattern the RICO private remedy after the
Clayton Act's private antitrust remedy.  The remedy in the Clayton Act was
subject to a four-year statute of limi tations, and the Court reasonably
inferred that Congress wanted the same limitations period to apply to both
statutes.  The Court has not found a similar intent to pattern MDRV 10 of
the 1934 Securities Act after those sections subject to a 1-and-3 year
limitation.  See ante, at 9-10.
    The policy choices that the Court makes today may well be wise -- even
though they are at odds with the recommendation of the Executive Branch --
but that is not a sufficient justification for making a change in what was
well-settled law during the years between 1946 and 1988 governing the
timeliness of action impliedly authorized by a federal statute.  This Court
has recognized that a rule of statutory construction that has been
consistently applied for several decades acquires a clarity that "is simply
beyond peradventure."  Herman & MacLean v. Huddleston, 459 U. S. 375, 380
(1983).  I believe that the Court should continue to observe that principle
in this case.  The Court's occasional departure from that principle does
not justify today's refusal to comply with the Rules of Decision Act.  See
e. g. Shearson/American Express v. Mcmahon, 482 U. S. 220, 268 (1987)
(Stevens, J., dissenting).  Accordingly, I respectfully dissent.







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1
    In Texas & Pacific R. Co. v. Rigsby, 241 U. S. 33 (1916) a unanimous
Court stated this presumption:
    "A disregard of the command of the statute is a wrongful act, and where
it results in damage to one of the class for whose especial benefit the
statute was enacted, the right to recover the damages from the party in
default is implied, according to a doctrine of the common law. . . .  This
is but an application of the maxim, Ubi jus ibi remedium."  Id., at 39-40.

2
    Federal judges have `borrowed' state statutes of limitations because
they were directed to do so by the Congress of the United States under the
Rules of Decision Act, 28 U. S. C. 1652.  Del Costello v. International
Brotherhood of Teamnsters, 462 U. S. 151, 172-3 (1983) (Stevens, J.,
dissenting); See also Agency Holding Corp. v. Malley-Duff & Associates, 483
U. S. 143, 157-165 (1987) (Scalia, J., concurring).

3
    Congress is perfectly capable of making these decisions.  When
confronted with the same need for uniformity in treble damages litigation
under the antitrust laws in 1955, it enacted MDRV 5 of the Clayton Act to
provide a four-year period of limitations.  See 69 Stat. 283, 15 U. S. C.
MDRV 15b.