Winkelman v. Blyth & Co., Inc.
| Decision Date | 10 June 1975 |
| Docket Number | No. 74-1203,74-1203 |
| Citation | 518 F.2d 530 |
| Parties | Blue Sky L. Rep. P 71,276, Fed. Sec. L. Rep. P 95,218 Walter E. WINKELMAN and Paul F. Becker, Plaintiffs-Appellants, v. BLYTH & CO., INC., a Delaware Corporation, Defendant-Respondent. Elmer G. ANDERSON et al., Plaintiffs-Appellants, v. BLYTH EASTMAN DILLON & CO. (Blyth & Co., Inc.), a Delaware Corporation, et al., Defendants-Respondents. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Before KOELSCH and ELY, Circuit Judges, and VOORHEES, * District Judge.
In these actions for violations of the federal securities laws and for common law fraud, the District Court for the District of Oregon (1) ruled that Oregon's two-year statute of limitations, Ore.Rev.Stat. § 12.110(1), and not the State's six-year statute, Ore.Rev.Stat. § 12.080, was applicable to the federal and common law claims; (2) concluded as a matter of law that the alleged fraud or deceit upon which the actions were based had been discovered by plaintiffs more than two years before the actions were filed; and hence (3) granted the summary judgments in favor of defendants from which this appeal is taken. We affirm based on the well reasoned opinion of the court below, 394 F.Supp. 994 (D.Ore., 1973).
On appeal plaintiffs vigorously argue that summary judgment was improper because it cannot be said as a matter of law that the statute of limitations ran as to the defendants' alleged failure to disclose they were market makers and the extent to which they were financially interested in the consummation of the stock sales. We disagree. As recognized in Chasins v. Smith, Barney & Co., 438 F.2d 1167, 1172 (2d Cir. 1970), the significance of such nondisclosures arises from their probable impact on an investor's assessment of the broker's representations regarding the worth of the stock and of his recommendation to buy or sell. 1 Here, the statute of limitations began to run when plaintiffs discovered the falsity of defendants' representations as to the worth of the stock, and thus the unreliability of defendants' initial recommendation to purchase; under the circumstances, that discovery gave plaintiffs sufficient notice that they had been defrauded or deceived to commence the running of the statute as to the actions in their entirety. The mere fact that plaintiffs had not then discovered defendants' alleged undisclosed interests did not toll the statute...
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