Alan Schmidt v. John Skolas
2014 U.S. App. LEXIS 19889
| 3rd Cir. | 2014Background
- Genaera dissolved in June 2009; assets placed in a liquidating trust with Argyce as trustee.
- Schmidt filed suit on June 8, 2012, on behalf of former shareholders against multiple defendants.
- Alleged fiduciary breaches: insider sales of assets at fire-sale prices, self-dealing, and improper asset transfers via related entities.
- District Court dismissed all counts as untimely under a two-year statute of limitations, rejecting tolling by Pennsylvania’s discovery rule.
- Appellate court reverses for certain assets (Aminosterol, IL9, Pexiganan) on discovery-rule tolling, and remands related claims; remainder affirmed.
- Dissent criticizes the majority for re-litigating the scope of the discovery rule and urges affirmance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 12(b)(6) dismissal based on statute of limitations was proper. | Schmidt maintains only complaint and integral documents should be considered; discovery rule may toll. | District Court correctly relied on untimely dates and imperfect diligence. | No; dismissal premature; discovery rule could toll under fiduciary context. |
| Whether Pennsylvania’s discovery rule tolls the two-year period for fiduciary-related claims. | Fiduciary relationship warrants relaxed diligence and delayed discovery of injury. | Plaintiff must plead and prove diligence; reliance on outside records insufficient. | Not evident on face of record that discovery rule applies; remanded for further consideration. |
| Whether Aminosterol, IL9, and Pexiganan claims are or are not time-barred. | Dates show potential tolling; discovery rule may apply. | Claims barable for Aminosterol and IL9; Pexiganan uncertain due to missing sale date. | Aminosterol and IL9 claims not facially time-barred; Pexiganan also not conclusively time-barred; discovery-rule analysis required. |
| Whether the district court’s prejudice dismissal of related counts was proper. | Reversed; preexisting discovery-rule considerations control; other counts reinstated. |
Key Cases Cited
- In re Mushroom Transp. Co., 382 F.3d 325 (3d Cir.2004) (directed discovery-rule standards in fiduciary cases)
- Barefoot Architect, Inc. v. Bunge, 632 F.3d 822 (3d Cir.2011) (discovery rule pleading requirements; not pleading around defenses)
- In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir.1997) (integral documents exception and motion to dismiss standard)
- Haugh v. Allstate Ins. Co., 322 F.3d 227 (3d Cir.2003) (when limitations begin to run; general rule for discovery rule timing)
- USPPS, Ltd. v. Avery Dennison Corp., 676 F.3d 1341 (Fed.Cir.2012) (acceptance of discovery-rule tolling where not facially evident on complaint)