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Plaintiff-appellant Stanley Block filed a class action in November 1986 against defendants-appellees First Blood Associates ("First Blood"), A. Frederick Greenberg and Richard M. Greenberg (collectively "the Greenbergs"), and against defendants Anabasis Investments, N.V. ("Anabasis") and Carolco Pictures, Inc. ("Carolco") after purportedly relying to his detriment on allegedly false statements made in a private placement memorandum issued by First Blood. In his complaint, Block alleged that all the defendants committed securities fraud, in violation of section 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78j(b) (1988), and Rule 10b-5 of the Securities and Exchange Commission, 17 C.F.R. § 240.10b-5 (1992), and committed the common law torts of fraud and deceit. Also alleged in the complaint was a breach of contract claim against First Blood.

In July of 1988 the district court denied Block's motion for class certification but granted him leave to renew upon a showing that a "meaningful number" of other investors shared with him an "identity of interest." See Block v. First Blood Assocs., 691 F.Supp. 685, 695-96 (S.D.N.Y.1988) ("Block II"). Block's second motion for class certification was filed in December 1988 and denied by the district court three months later. See Block v. First Blood Assocs., 125 F.R.D. 39 (S.D.N.Y.1989) ("Block III").

In July of 1989 Block and twenty-nine other investors (collectively "the Investors") filed an amended complaint against the original defendants: First Blood; the Greenbergs; Anabasis; and Carolco; and added the following as defendants: Touche Ross & Co. ("Touche Ross"); the law firm of Goldschmidt, Fredericks & Oshatz; and its partners, Barry Fredericks, Henry Goldschmidt, Michael Oshatz, Leonard A. Messinger, Sanford Schlesinger, Edward Sussman and Mark Meyer.[1] In his amended complaint, Block reiterated the allegations in his first complaint, except the breach of contract claim against First Blood, and further alleged: section 10(b) and common law fraud and deceit against the newly added defendants; negligence and malpractice against the newly added defendants; breach of contract against Anabasis and Carolco; breach of fiduciary duty against First Blood and the Greenbergs; and negligent misrepresentation against all the defendants. The district court ordered that discovery be completed by November 14, 1990, and that a final pretrial order be submitted two weeks later.

On November 5, 1990, First Blood and the Greenbergs filed an amended answer, raising a statute of limitations defense for the first time. Three days later, we decided Ceres Partners v. GEL Associates, 918 F.2d 349 (2d Cir.1990), holding that section 10(b) claims must be brought within one year of discovery of the fraud but no more than three years after the fraud occurred. On November 19, First Blood and the Greenbergs moved for summary judgment 347*347 to dismiss the Investors' action as time barred. On April 30, 1991, the district court granted the defendants' motion and dismissed the action. See Block v. First Blood Assocs., 763 F.Supp. 746 (S.D.N.Y. 1991) ("Block V"). The district court construed defendants' summary judgment motion as including a motion to amend their answer pursuant to Fed.R.Civ.P. 15(a) to plead a statute of limitations defense. See id. at 747-48. After granting the defendants leave to amend, see id. at 748-50, the district court found that the Investors' claims were time barred under the preCeres statute of limitations because their action accrued in 1982 — the date when the last plaintiff purchased shares in First Blood — and all the acts complained of took place at or before the purchase of the shares. See id. at 750-51. The district court also determined, upon applying retroactively the new limitations period announced in Ceres, that the Investors' action was time barred. See id. at 751-52. Finally, the district court dismissed the Investors' state law claims, apparently for lack of pendent jurisdiction. See id. at 752.

The Investors appeal from the district court's dismissal of their claims, and Block appeals from the district court's refusal to grant his motion for class certification.


988 F.2d 344 (1993) Stanley B. BLOCK; John C. Blazier; Joseph A. Clements; Dan W. Deloney; Wyatt C. Deloney; Ralph Diorio; Robert A. Epstein; Charles B. Filleman; Glenna Goodacre; Robert Goodacre; Joe E. Goodwin; Sarah Grace; Edmond J. Harris; Wesley H. Hocker; Roman Hought; W.R. Jacobsen; Robert L. Jordan; Ted Kotcheff; Frank H. Kush; David Laman; Hurdle H. Lea; David D. Maytag; Doyle E. Montgomery; Henry Nobel; Ron Maller; William H. Plummer; Edward E. Rottenberry; G. Walter Rottenberry; Michael J. Scarfia; Bill R. Sparks; Lewis F. Wood, Plaintiffs-Appellants, v. FIRST BLOOD ASSOCIATES; A. Frederick Greenberg; Richard M. Greenberg; Anabasis Investments, N.V.; Carolco Pictures, Inc.; Goldschmidt, Fredericks & Oshatz; Henry J. Goldschmidt; Lawrence E. Goldschmidt; Michael P. Oshatz; Leonard A. Messinger; Sanford J. Schlesinger; Edward I. Sussman; Mark A. Meyer; Touche Ross & Co., Defendants. FIRST BLOOD ASSOCIATES; A. Frederick Greenberg; Richard M. Greenberg, Defendants-Appellees, v. UNITED STATES of America, Intervenor. No. 90, Docket 91-7558. United States Court of Appeals, Second Circuit.

Argued November 24, 1992. Decided March 15, 1993.