na fide offered to the public"); Sowell, 1987 WL 10712, at *8 (accepting first-offered test without discussion); Waterman v. Alta Verde Indus., Inc., 643 F.Supp. 797, 808 (E.D.N.C. 1986) (adopting first-offered test based on weight of authority); In re National Mortgage Equity Corp. Mortgage Pool Certificates Sec. Litig., 636 F.Supp. 1138, 1167 (C.D.Cal. 1986) (same); Slagell v. Bontrager, 616 F.Supp. 634, 636-37 (W.D.Pa. 1985) (adopting first-offered test for § 12(a)(1) violations involving unregistered securities); Morley v. Cohen, 610 F.Supp. 798, 815-16 (D.Md. 1985) ("[T]he court is persuaded that the three-year statute of limitations commences to run on the date the securities were first bona fide offered to the public."); LeCroy v. Dean Witter Reynolds, Inc., 585 F.Supp. 753, 760-61 (E.D.Ark. 1984) (adopting, in what may be dictum, the first-offered test, but expressing "some degree of disquietude"); Morse, 445 F.Supp. 619 (applying first-offered test in context of § 11 claims); Fischer v. Int'l Tel. Tel. Corp., 391 F.Supp. 744, 747-48 (E.D.N.Y. 1975) ("From every indication in the authorities, the crucial date, i.e., the date when a security is first offered to the public within the meaning of § 77m of Title 15, is not earlier than the effective date of last amendment to the registration statement and not later than the date when the prospectus is released to, or other solicitation is made of, the public."); Kramer v. Scientific Control Corp., 352 F.Supp. 1175, 1176 (E.D.Pa. 1973) (accepting, in § 11 and § 12(a)(2) context, first-offered test without discussion); Osborne v. Mallory, 86 F.Supp. 869, 873 (S.D.N.Y. 1949) (applying first-offered test without discussion); cf. Ingenito v. Bermec Corp., 376 F.Supp. 1154, 1173 (S.D.N.Y. 1974) (dismissing case for failing to plead compliance with three year repose period by not indicating the date on which security was first offered to the public).
The three-year limitation in the 1933 Act, 15 U.S.C. § 77m, has been held to be an absolute bar, notwithstanding allegations of fraudulent concealment. See Brick v. Dominion Mortgage Realty Trust, 442 F. Supp. 283, 291 (W.D.N.Y. 1977); Fischer v. International Telephone Telegraph Corp., 391 F. Supp. 744, 748 (E.D.N.Y. 1975); Shonts v. Hirliman, 28 F. Supp. 478, 486 (S.D.Cal. 1939); Cowsar v. Regional Recreations, Inc., 65 F.R.D. 394, 399 (M.D.La. 1974). 627 F.2d at 1043.
The three-year limitation in the 1933 Act, 15 U.S.C. § 77m, has been held to be an absolute bar, notwithstanding allegations of fraudulent concealment. See Brick v. Dominion Mortgage Realty Trust, 442 F. Supp. 283, 291 (W.D.N.Y. 1977); Fischer v. International Telephone Telegraph Corp., 391 F. Supp. 744, 748 (E.D. N.Y. 1975); Shonts v. Hirliman, 28 F. Supp. 478, 486 (S.D.Cal. 1939); Cowsar v. Regional Recreations, Inc., 65 F.R.D. 394, 399, (M.D.La. 1974). Finally, finding the ILSFDA to contain an absolute bar is consistent with later congressional action.
The majority of courts have held "that the three-year period begins to run from the date the security is first offered to the public." Waterman v. Alta Verde Indus., 643 F. Supp. 797, 808 (E.D.N.C. 1986) (emphasis in original); accord Fischer v. International Tel. Tel. Corp., 391 F. Supp. 744, 747 (E.D.N.Y. 1975). This period is an absolute outer limitation.
However, the majority of courts that have addressed this question have ruled otherwise, holding that the three-year period begins to run from the date the security is first offered to the public.See, e.g., Morley v. Cohen, 610 F. Supp. 798, 815 (D.Md. 1985); Slagell v. Bontrager, 616 F. Supp. 634, 636 (W.D.Pa. 1985), aff'd, 791 F.2d 921 (3d Cir. 1986); LeCroy v. Dean Witter Reynolds, Inc., supra; Brick v. Dominion Mortgage Realty Trust, 442 F. Supp. 283, 291-92 (W.D.N.Y. 1977); Fischer v. International Telephone and Telegraph Corporation, 391 F. Supp. 744, 747 (E.D.N.Y. 1975); Ingenito v. Bermec Corporation, 376 F. Supp. 1154 (S.D.N Y 1974); Osborne v. Mallory, 86 F. Supp. 869, 873 (S.D.N.Y. 1949); see also III L. Loss, Securities Regulation, p. 1742 (2d Ed. 1961). As the clear weight of authority supports this interpretation, the court is constrained to agree that plaintiff's a federal securities action is barred by the three-year limitation period set out in 15 U.S.C. § 77m. Consequently, his motion for summary judgment on this claim must be denied.
See also Hayden v. McDonald, 742 F.2d 423, 436-37 (8th Cir. 1984), (doctrine is inapplicable to statute of limitations under the Minnesota Blue Sky Act). Given that section 10 is broader in scope than either section 11 or section 12(2), Goodman v. Epstein, supra, 582 F.2d at 414, and given the strict construction typically afforded section 13, see Fischer v. International Telephone and Telegraph Corp., 391 F. Supp. 744 (E.D.N.Y. 1975), expansion of the law to permit application of the "integrated offering doctrine" to this case is inappropriate. "The integration theory, although appropriate to determine whether the seller's total effect on the marketplace merits any governmental regulation, should not be used to alter the statute of repose on private legal actions which flow from that governmental regulation once properly imposed."
Several other courts have also adopted the "first offered" interpretation of section 13. See Campito v. McManus, 470 F. Supp. 986, 995 (E.D.N.Y. 1979); Fischer v. Int'l Telephone and Telegraph Corp., 391 F. Supp. 744, 747 (E.D.N Y 1975); Ingenito v. Bermec Corp., 376 F. Supp. 1154, 1173 (S.D.N.Y. 1974); Kramer Harrison v. Scientific Control Corp., 352 F. Supp. 1175, 1176 (E.D.Pa. 1973); Osborne v. Mallory, 86 F. Supp. 869, 873 (S.D.N.Y. 1949). Apparently, only one court has specifically addressed the issue and adopted the "last offered" approach.
Otherwise 15 U.S.C. § 77m would create a limitation period for all suits of one year from the time discovery of the untrue statements or omissions should have been made, and the three-year provision would serve no purpose at all. See Cowsar v. Regional Recreation, Inc., 65 F.R.D. 394, 397 (M.D.La. 1974); Burkardt v. Liberty, 394 F. Supp. 1296, 1298-1299 (W.D.Pa. 1975); Fisher v. International Telephone Telegraph Corporation, 391 F. Supp. 744, 747-748 (E.D.N.Y. 1975). Kramer v. Loewi Co., Inc., 357 F. Supp. 83, 87 (E.D.Wis. 1973), is not strictly on point, because it involves the state statute of limitations applicable to a § 10(b) action.
In Fischer v. International Telephone Tel. Corp., 391 F. Supp. 744 (E.D.N.Y. 1975), plaintiff alleged that defendants' registration statement was false and misleading and omitted material facts in violation of section 11. Plaintiff's complaint was filed three years and two days after the date when, according to the court's determination, the stock in question had been bona fide offered to the public.
More than three years have elapsed between June 26, 1970, and the time of filing this suit, and therefore, the plaintiff's claims under Section 12 must be dismissed as having been asserted too late. See also Fischer v. International Telephone Telegraph Corp., 391 F. Supp. 744 (E.D.N.Y. 1975). Similarly, plaintiff's claims under Section 15, 15 U.S.C. § 77 o, must also be dismissed.