Levy v. BASF Metals Ltd.
917 F.3d 106
2d Cir.2019Background
- Susan Levy, a pro se attorney, lost her investment in platinum futures after a market crash in August 2008 and alleges the market was manipulated.
- Levy sued in 2015 asserting claims under the Commodities Exchange Act (CEA), RICO, the Sherman Act, and New York law, accusing multiple banks and firms of conspiring to fix platinum prices.
- She previously sued different defendants in 2012 and settled that suit in 2014 without full recovery; she received a 2014 class-action complaint alleging similar misconduct before filing the 2015 suit.
- Defendants moved to dismiss Levy’s second amended complaint; the district court dismissed her federal claims as time barred and declined supplemental jurisdiction over state claims.
- The Second Circuit affirmed, but issued a separate opinion clarifying when a CEA claim accrues: when the plaintiff discovers the CEA injury (the loss), not when the plaintiff learns the scheme or defendants’ identities.
Issues
| Issue | Levy's Argument | Defendants' Argument | Held |
|---|---|---|---|
| When does a CEA claim accrue for statute of limitations purposes? | Accrual should be when she learned of the alleged manipulation and the defendants (2014). | Accrual occurs when plaintiff discovered the injury (the 2008 loss). | Accrual occurred in 2008 when Levy suffered and discovered her loss; CEA two-year period expired before 2015 suit. |
| Whether inquiry notice (constructive knowledge) controls accrual here | Argued she was not on notice until the 2014 class action disclosed the scheme. | Defendants: her 2008 loss put her on actual or inquiry notice earlier. | Court found actual knowledge of injury in 2008; not an inquiry-notice case. |
Key Cases Cited
- Rotella v. Wood, 528 U.S. 549 (U.S. 2000) (discovery accrual rule: statute starts when plaintiff discovers injury, not discovery of all claim elements)
- Muto v. CBS Corp., 668 F.3d 53 (2d Cir. 2012) (de novo review of statute-of-limitations interpretation)
- Koch v. Christie's Int'l PLC, 699 F.3d 141 (2d Cir. 2012) (application of discovery accrual rule)
- Cancer Found., Inc. v. Cerberus Capital Mgmt., LP, 559 F.3d 671 (7th Cir. 2009) (statute begins when harm is discovered; plaintiff need not know claim is actionable)
- Kronisch v. United States, 150 F.3d 112 (2d Cir. 1998) (claim accrues when plaintiff knows enough facts of injury and causation to seek counsel)
- Benfield v. Mocatta Metals Corp., 26 F.3d 19 (2d Cir. 1994) (inquiry notice may arise where circumstances would prompt a reasonable person to investigate)