The US District Court for the Eastern District of New York recently dismissed a class action claim, determining the reasserted claim violated the applicable statute of repose that requires all claims be brought within three years after the cause of action accrues. In April 2010, plaintiffs filed a class action alleging the Registration Statement and Proxy disseminated by defendant in connection with a merger contained material misstatements and omissions. In September 2011, the District Court determined that plaintiffs lacked standing to bring a claim under Section 14(a) of the Securities and Exchange Act of 1934, alleging a material misstatement in the Proxy because plaintiffs were unable to vote on the merger. On May 2, 2013, plaintiffs moved to reassert the Proxy claim with a new plaintiff in the class action.
The District Court determined that the reasserted claim was time-barred because it violated the one- and three-year framework of the applicable statute of repose. Plaintiffs argued that the new claim did not violate the three-year statute of repose because the reasserted claim related back to the original complaint. The District Court disagreed, holding that Federal Rule of Civil Procedure 15(c), which governs claims relating back, applied to a statute of limitations but not to a statute of repose, and granted defendant’s motion to dismiss.
Bensinger v. Denbury Resources Inc., No. 10-cv-1917 (JG) (VVP) (E.D.N.Y. July 14, 2014).