In York County v. HP, Inc., the U.S. Court of Appeals for the Ninth Circuit further clarified national standards governing the two-year statute of limitations applicable to private claims under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Joining the Second Circuit (and others), the Court held that the statute of limitations begins to run when a “reasonably diligent plaintiff” would have discovered the “facts constituting the violation” (including scienter), and that occurs when such a plaintiff can plead those facts “with sufficient detail and particularity to survive a 12(b)(6) motion to dismiss.” York contributes to a growing consensus among the circuits on the standards applicable to the two-year Section 10(b) statute of limitations. It also advances the law by articulating a framework for courts to assess when, on the pleadings alone, a Section 10(b) claim may be dismissed as untimely (i.e., when the complaint fails to plead that a “necessary” Section 10(b) “fact” became discoverable within two years of the complaint’s filing). While York is an important addition to jurisprudence on Section 10(b) limitations periods, questions remain, including the full gamut of “facts constituting the violation” that a reasonably diligent plaintiff must discover for the clock to start ticking.
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