Credit Suisse Securities (Usa) LLC v. Simmonds
132 S. Ct. 1414
| SCOTUS | 2012Background
- Simmonds filed numerous §16(b) actions in 2007 alleging IPO aftermarket inflation and undisclosed ownership changes by petitioners.
- §16(b) requires disgorgement of short-swing profits realized within six months, with suits must be brought within two years after profit realization.
- Ninth Circuit held §16(b) tolls until §16(a) disclosure is filed, citing Whittaker v. Whittaker Corp.
- District Court dismissed complaints as untimely; Ninth Circuit reversed, adopting Whittaker tolling rule.
- Court granted certiorari; issue focused on whether the 2-year period can be extended and, if so, whether tolling occurs until §16(a) filing.
- Court remanded to apply ordinary equitable tolling rules
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §16(b)’s two-year period is tolled until §16(a) filing. | Simmonds argues Whittaker tolls until §16(a) filing. | Petitioners contend no tolling or different tolling rule should apply. | Not tolled until §16(a) filing; remanded for tolling analysis under equitable standards. |
| If tolling applies, what form of tolling governs? | Equitable tolling should apply, delaying start of the clock. | A bright-line rule should apply; Whittaker is improper. | Equitable tolling may apply; Whittaker rule rejected; remand for application of ordinary tolling principles. |
| Does Lampf’s “period of repose” status foreclose tolling? | Lampf supports no extension for discovery of facts. | Not dispositive; tolling analysis still open. | Not deciding repose issue; assumes possible extension but rejects Whittaker approach. |
| Is Whittaker's tolling rule consistent with equitable-tolling doctrine? | Whittaker serves Congress’s aims to curb short-swinging by insiders. | Rule creates perpetual tolling and is inequitable. | Whittaker rule rejected as inconsistent with equitable tolling and general limitation goals. |
| Should lower courts apply ordinary equitable tolling after decision? | Apply equitable tolling as facts warrant. | Apply standard, bright-line approach if possible. | Case remanded to apply usual equitable tolling rules to the facts. |
Key Cases Cited
- Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U. S. 350 (1991) (two-year period of repose concept discussed)
- Whittaker v. Whittaker Corp., 639 F.2d 516 (9th Cir. 1981) (tolls §16(b) until §16(a) filing per circuit rule)
- Pace v. DiGuglielmo, 544 U. S. 408 (2005) (equitable tolling requires diligence and extraordinary circumstances)
- John R. Sand & Gravel Co. v. United States, 552 U. S. 130 (2008) (tolling must align with statutory purpose; avoid stale claims)
- American Pipe & Construction Co. v. Utah, 414 U. S. 538 (1974) (class-action tolling; efficiency of litigation)
- Gollust v. Mendell, 501 U. S. 115 (1991) (§16(b) liability is strict, disgorgement irrespective of intent)
- Ruth v. Unifund CCR Partners, 604 F.3d 908 (6th Cir. 2010) (equitable tolling considerations in federal actions)
- Santos ex rel. Beato v. United States, 559 F.3d 189 (3d Cir. 2009) (equitable tolling context in tolling analysis)
- Meyer v. Holley, 537 U. S. 280 (2003) (Congress’ silence cannot imply unusual modifications to rules)