Supreme Court of the United States

No. 14-379

IN THE Supreme Court of the United States

NOMURA HOME EQUITY LOAN, INC., ET AL., Petitioners, v.

NATIONAL CREDIT UNION ADMINISTRATION BOARD, Respondent.

On Petition for a Writ of Certiorari to the United States Court of Appeals for the Tenth Circuit

BRIEF FOR BUSINESS ROUNDTABLE AS AMICUS CURIAE SUPPORTING PETITIONERS

MARIA GHAZAL WILLIAM M. JAY BUSINESS ROUNDTABLE Counsel of Record 300 New Jersey Ave., N.W. GOODWIN PROCTER LLP Suite 800 901 New York Ave., N.W. Washington, DC 20001 Washington, DC 20001 [email protected] (202) 346-4000

JOSHUA M. DANIELS GOODWIN PROCTER LLP Exchange Place Boston, MA 02109

Counsel for Business Roundtable

November 3, 2014

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...... ii INTEREST OF THE AMICUS CURIAE ...... 1 SUMMARY OF ARGUMENT ...... 2 ARGUMENT ...... 4 I. Certainty Is The Key Value That Statutes Of Repose Implement ...... 5 A. Statutes Of Repose And Statutes Of Limitations Serve Distinct Purposes...... 5 B. Statutes Of Repose Promote Certainty And Predictability By Ensuring That Defendants Know When Liability Ends ...... 6 C. The Certainty That Statutes Of Repose Provide Is A Key Part Of Many Statutory Liability Frameworks ...... 10 II. Reading An Ambiguous Law To Turn A Statute Of Repose Into A Statute Of Limitations Is Contrary To This Court’s Longstanding Interpretive Principles ...... 14 III. The Question Presented Here Is Broadly Significant, And Forum-Shopping May Thwart Further Review ...... 18 CONCLUSION ...... 22

TABLE OF AUTHORITIES

Page(s) FEDERAL CASES

Arizona v. Inter Tribal Council of Ariz., Inc., 133 S. Ct. 2247 (2013) ...... 17 Bd. of Trustees of Leland Stanford Jr. Univ. v. Roche Molecular Sys., 131 S. Ct. 2188 (2011) ...... 15 Bowen v. City of New York, 476 U.S. 467 (1986) ...... 8 Cada v. Baxter Healthcare Corp., 920 F.2d 446 (7th Cir. 1990) ...... 8 CTS Corp. v. Waldburger, 134 S. Ct. 2175 (2014) ...... passim Fed. Hous. Fin. Agency v. HSBC N. Am. Holdings Inc., Nos. 11cv6189, 11cv6201 (DLC), 2014 WL 4276420 (S.D.N.Y. Aug. 28, 2014) ...... 20 Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604 (2013) ...... 7 Herman & MacLean v. Huddleston, 459 U.S. 375 (1983) ...... 10 In re Exxon Mobil Corp. Sec. Litig., 500 F.3d 189 (3d Cir. 2007) ...... 8 Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89 (1989) ...... 7 Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350 (1991) ...... 2

iii

McCann v. Hy-Vee Inc., 663 F.3d 926 (7th Cir. 2011) ...... 6, 9, 10 Merck & Co., Inc. v. Reynolds, 559 U.S. 633 (2010) ...... 7, 11 Morton v. Mancari, 417 U.S. 535 (1974) ...... 15 Nat’l Ass’n of Homebuilders v. Defenders of Wildlife, 551 U.S. 644 (2007) ...... 15 Norfolk Redev. & Hous. Auth. v. Chesapeake & Potomac Tel. Co., 464 U.S. 30 (1983) ...... 15 Norris v. Wirtz, 818 F.2d 1329 (7th Cir. 1987) ...... 10 Pelman ex rel. Pelman v. McDonald’s Corp., 396 F.3d 508 (2d Cir. 2005) ...... 13 Pinter v. Dahl, 486 U.S. 622 (1988) ...... 10 Posadas v. Nat’l City Bank of N.Y., 296 U.S. 497 (1936) ...... 15 Reg’l Rail Reorg. Act Cases, 419 U.S. 102, 134 (1974) ...... 16 Rehberg v. Paulk, 132 S. Ct. 1497 (2012) ...... 15 Rodriguez de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. 477 (1989) ...... 19 Rodriguez v. United States, 480 U.S. 522 (1987) ...... 17

Silver v. N.Y. Stock Exch., 373 U.S. 341 (1963) ...... 15

OTHER CASES

Commonwealth v. Fremont Inv. & Loan, 897 N.E.2d 548 (Mass. 2008) ...... 13 FDIC v. Rhodes, No. 59309, 2014 WL 5486681 (Nev. Oct. 30, 2014)...... 20, 21 Foster’s Case, 77 Eng. Rep. 1222 (K.B. 1614) ...... 15 State ex rel. Miller v. Pace, 677 N.W.2d 761 (Iowa 2004) ...... 13

FEDERAL STATUTES

12 U.S.C. § 1821(d)(14) ...... 20 12 U.S.C. § 1787(b)(14) ...... 4 12 U.S.C. § 4617(b)(12) ...... 20 15 U.S.C. § 77m ...... 1, 10 15 U.S.C. § 77v(a) ...... 19 15 U.S.C. § 1635(f) ...... 12 15 U.S.C. § 1691e(f) ...... 12 28 U.S.C. § 1658(b)(2) ...... 11 Pub. L. No. 73-22, 48 Stat. 74, 84 (1933) ...... 11 Securities Exchange Act of 1934 § 10(b), 15 U.S.C. § 78j(b) ...... 11

OTHER STATUTES

CAL. CORP. CODE § 25506(b) ...... 12

GA. CODE § 51-1-11(b)(2) ...... 11

MASS. GEN. LAWS ch. 260, § 2B ...... 11

MICH. COMP. LAWS § 600.5838b(1)(b) ...... 12 NEB. REV. STAT. § 25-223 ...... 11

TENN. CODE § 28-3-104(c)(2) ...... 12

TENN. CODE § 47-18-110 ...... 12

TEX. REV. CIV. STAT. art. 581, § 33(H)(2)(b) ...... 12

WIS. STAT. § 425.307(1) ...... 12

OTHER AUTHORITIES

1 CALVIN W. CORMAN, LIMITATION OF ACTIONS § 1.1 (1991) ...... 5, 10 73 Cong. Rec. 8668 (1934) ...... 11 Cass. R. Sunstein, Interpreting Statutes in the Regulatory State, 103 HARV. L. REV. 405, 475 (1989) ...... 16 Developments in the Law— Statutes of Limitations, 63 HARV. L. REV. 1177, 1185 (1950) ...... 6

BRIEF FOR BUSINESS ROUNDTABLE AS AMICUS CURIAE SUPPORTING PETITIONERS ______

INTEREST OF THE AMICUS CURIAE1 The Business Roundtable (BRT) is an associa- tion of chief executive officers of leading U.S. companies that together have $7.4 trillion in annual reve- nues and more than 16 million employees. The BRT’s member companies comprise more than a third of the total value of the U.S. stock market and pay more than $200 billion in dividends to shareholders. The BRT was founded on the belief that businesses should play an active and effective role in the for- mation of public policy, and participate in litigation as amici curiae where important business interests are at stake. This case concerns the venerable statute of repose that limits liability under the Securities Act of 1933, by providing that “[i]n no event” may a plaintiff sue more than three years after an objectively knowable date. 15 U.S.C. § 77m. As the Court explained earlier this year, statutes of repose place “an outer limit on the right to bring a civil action,” and thus “an ‘absolute … bar’ on a defendant’s temporal liability.” CTS

1 The amicus gave at least 10 days’ notice to all parties of its intent to file this brief, and has submitted letters of consent from all parties to the Clerk. No counsel for a party authored any part of this brief; no party or party’s counsel made a monetary contribution intended to fund the preparation or submission of this brief; and no person other than amicus curiae, its members, or its counsel made a monetary contribution to the brief’s preparation or submission.

Corp. v. Waldburger, 134 S. Ct. 2175, 2182-83 (2014) (quoting 54 C.J.S. LIMITATIONS OF ACTIONS § 7, at 24 (2010)). The Securities Act’s statute of repose is no exception: it “serve[s] as a cutoff” that may not be tolled. Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 363 (1991). The question presented is whether Congress has made an exception to these principles when the plaintiff is a conservator or receiver of a failed financial institution. The BRT’s members—including companies from across the American economy, not only financial services—regularly make business decisions in reliance on the certainty and finality that statutes of repose provide. Accordingly, the BRT has a strong interest in ensuring that statutes of repose are correctly interpreted by reference to those values of certainty and finality, and are not incorrectly conflated with other statutory time limits that are different in purpose and in kind.

SUMMARY OF ARGUMENT As this Court made plain in CTS Corp. just this past June, statutes of repose are fundamentally different from statutes of limitations in both their purpose and effect. Statutes of repose give controlling weight to certainty: their central goal is to ensure that defendants can confidently ascertain the date on which their exposure to potential liability will come to an end. Because defendants generally do not and cannot know the circumstances of individual plaintiffs and their reasons for delaying suit, statutes of repose are absolute—they may not be equitably tolled, for example. E.g., Lampf, 501 U.S. at 363. That protection for defendants often serves to coun-

3 terbalance other, highly plaintiff-friendly features of the statutory scheme (such as the Securities Act’s provision exposing anyone who signs a registration statement to strict liability). The court of appeals’ decision gave short shrift to the distinct purposes that statutes of repose are de- signed to serve. Instead, faced with a statute that clearly displaces certain statutes of limitations with a new set of time limits, but concededly is ambiguous as to its treatment of statutes of repose, the court below concluded that Congress meant to sweep aside all otherwise-applicable statutory time limits whenever the plaintiff happens to be a federal conservator or receiver asserting the claims of a failed financial institution. That result, which effectively allows the plaintiff’s individual circumstances—when it was appointed as a conservator or liquidating agent—to override every statute of repose that might otherwise bar the failed credit unions’ claims, is contrary to the very “legislative judgment” that statutes of repose embody. CTS Corp., 134 S. Ct. at 2183. The court of appeals’ conclusion also disregards this Court’s careful instructions concerning how to harmonize new statutes with existing ones. Over and over, this Court has said that federal courts are to proceed cautiously, and only on the basis of clear and manifest legislative intent, before concluding that a new law impliedly repeals or eviscerates an old one. In particular, courts are not to glibly assume that Congress meant to jettison prior law merely because doing so might be thought to advance the new law’s apparent purpose. Rather, this Court has instructed, courts must be cognizant that the old law likely was enacted for important purposes of its own, and those

4 purposes are not to be abandoned unless Congress has made it clear that that is in fact what it has de- cided to do. The Tenth Circuit failed to pay heed to these instructions here. In doing so, it has made itself an especially attractive forum for respondent and other federal agencies that play a similar role—and the highly permissive venue provisions of the Securities Act will do little to prevent respondent from litigat- ing there. The decision below therefore threatens to cast a long shadow over the Nation’s financial indus- try—and other businesses too, for the effects of the Tenth Circuit’s mistaken view will not be cabined to that sector. The extender statute at issue here, 12 U.S.C. § 1787(b)(14), may well be read to nullify a whole range of federal and state repose periods that would otherwise bar the claims. In sum, the decision below threatens to create great mischief. The time for this Court to correct it is now.

ARGUMENT The purpose of a statute of repose is to provide certainty: a specified date after which the threat of litigation and liability is at an end. The Tenth Circuit’s decision has now injected significant uncertainty into this area of the law, by insisting on applying to a statute of repose principles that properly belong in the realm of statutes of limitations. The court of appeals’ decision diverges from what was previously settled law and calls for this Court’s immediate review. The question presented is potentially significant for all statutes of repose, and even a single ju-

5 risdiction following this misguided rule potentially opens a loophole for plaintiffs to pursue litigation that should be categorically barred. This Court should grant the petition for a writ of certiorari to review this important issue.

I. Certainty Is The Key Value That Statutes Of Repose Implement A. Statutes Of Repose And Statutes Of Limitations Serve Distinct Purpos- es As this Court acknowledged in CTS Corp., 134 S. Ct. at 2182-83, statutes of repose stand apart from other types of time limits that Congress or state legislatures may place on the right to pursue a claim in court. Statutes of repose “seek to attain different purposes and objectives,” id. at 2182, and they also operate differently in practice. See, e.g., 1 CALVIN W. CORMAN, LIMITATION OF ACTIONS § 1.1, at 4-5 (1991) (discussing differences between statutes of repose and statutes of limitations). Most fundamentally, statutes of limitations measure time from the plaintiff’s perspective; statutes of repose, from the defendant’s. That is because statutes of repose provide not just finality, but certainty and predictability as well, by setting a specific period after which potential defendants no longer need to worry about getting sued on stale claims. Thus, while “time is the controlling factor” in barring suit under either a statute of repose or a statute of limitations, 134 S. Ct. at 2182, the similarity ends there. Statutes of repose serve “a distinct purpose” from ordinary statutes of limitation. As Judge Posner has

6 explained, the “distinct purpose” of a statute of repose is to cut off liability after a predetermined point in time, lest “business planning [be] impeded.” McCann v. Hy-Vee Inc., 663 F.3d 926, 930 (7th Cir. 2011). Instead of allowing “contingent liabilities that linger indefinitely,” id., statutes of repose “effect a legislative judgment that a defendant should ‘be free from liability after the legislatively determined period of time,’” so that he may “put past events behind him.” CTS Corp., 134 S. Ct. at 2183 (quoting 54 C.J.S., LIMITATIONS OF ACTIONS § 7, at 24 (2010)). The aim of a statute of repose is nothing less than providing the defendant with “freedom from liability,” a “fresh start” akin to “a discharge in bankrupt- cy,” which forever wipes the slate clean. Id.; accord Developments in the Law— Statutes of Limitations, 63 HARV. L. REV. 1177, 1185 (1950) (“There comes a time when [the defendant] ought to be secure in his reasonable expectation that the slate has been wiped clean of ancient obligations, and he ought not to be called on to resist a claim….”). B. Statutes Of Repose Promote Cer- tainty And Predictability By Ensur- ing That Defendants Know When Liability Ends Certainty comes from the way statutes of repose operate—and from the way statutes of repose differ from statutes of limitations. Statutes of repose aim to allow defendants to ascertain with absolute confidence the specific date on which their exposure to liability arising from a particular act or transaction will come to an end. By contrast, the standard features of a statute of limitations—precisely the features that a statute of repose does not share—leave

7 it ill-equipped to generate a certain and reliable an- swer to the question when liability exposure termi- nates. “As a general matter, a statute of limitations be- gins to run when the cause of action ‘accrues’—that is, when ‘the plaintiff can file suit and obtain relief.’” Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604, 610 (2013) (quoting Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Febar Corp. of Cal., Inc., 522 U.S. 192, 201 (1997)). But the plaintiff’s particular circumstances, such as an individual lack of knowledge, may delay the time of accrual until well after the action that is the basis of the claim. See, e.g., Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 644-45 (2010). Or even if the claim accrues, obstacles that prevent an individual plaintiff from filing suit may constitute grounds for equitable tolling— effectively making the statute of limitations much longer than the time period set out in the statute. See, e.g., Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 96 (1989). And because these tolling decisions are so fact-sensitive, it is difficult for even the plaintiff to know in advance whether the time is running or has run: until a court looks at the plaintiff’s individual circumstances, the outcome is never certain Statutes of repose, by contrast, impose temporal limits that generally are “measured … from the date of the last culpable act or omission of the defendant.” CTS Corp., 134 S. Ct. at 2182. That is because statutes of repose are “targeted at a different actor,” the defendant, and employ “a different emphasis” in shaping the parties’ behavior. CTS Corp., 134 S. Ct. at 2183. The running of a repose period is untethered to when the individual plaintiff’s claim accrues; it is

8 irrelevant when the plaintiff may have discovered the injury or even when it was suffered. See id. (“[T]he injury need not have occurred, much less have been discovered.” (quoting 54 C.J.S., supra, § 7, at 24)); Cada v. Baxter Healthcare Corp., 920 F.2d 446, 451 (7th Cir. 1990) (recognizing that the “very purpose [of a statute of repose] is to set an outer limit unaffected by what the plaintiff knows”). Additionally, statutes of repose (unlike statutes of limitations) “generally may not be tolled, even in cases of extraordinary circumstances beyond a plaintiff’s control.” CTS Corp., 134 S. Ct. at 2183. As this Court has observed, this “central distinction” between the two types of time limits “underscores their differing purposes.” Id. Statutes of repose ultimately do not assess timeliness by reference to the circumstances of each and every plaintiff, even where dis- missal of the lawsuit might raise individualized “fairness concerns” for a particular plaintiff. See Bowen v. City of New York, 476 U.S. 467, 480 n.12 (1986). As a different court has put it, statutes of repose “strike a stronger defendant-friendly balance” in promoting finality. In re Exxon Mobil Corp. Sec. Litig., 500 F.3d 189, 199-200 (3d Cir. 2007). It is because statutes of repose do not focus on the plaintiff’s individual circumstances that they are able to supply defendants with the certainty that statutes of limitations cannot. With only a statute of limitations for protection, a defendant cannot know ex ante when his potential exposure to liability will end. Although the defendant may know when a particular security was sold, when a building was sub- stantially completed, etc., often there will be no way of knowing when the plaintiff was injured by that act

9 until the defendant has already been served with the complaint. In addition, the defendant generally will not know whether some plaintiffs have a characteris- tic, such as minority or mental incompetency, that prevents a statute of limitations from running. Still less will the defendant have any way of knowing when each plaintiff learned or should have learned of the injury (in cases where the plaintiff asserts that the discovery rule applies), or whether some special circumstance prevented the plaintiff from filing within the limitations period (in cases where equitable tolling is requested). Thus, a defendant in those circumstances could not say with any confidence when the “contingent liabilit[y]” that the plaintiff’s claim represents will terminate, which may well “im- pede[ ]” the defendant’s ability to move forward. McCann, 663 F.3d at 930. When faced with claims that are subject to a statute of repose, by contrast, the defendant can predict with absolute certainty the precise date on which the plaintiff’s claims will expire. From the particular date on which the defendant sold a security, or erect- ed a building, or sold a product, the defendant can know that exposure to potential claims ends once the statutory period, measured from that date, runs out, since no claims may be prosecuted after that “cutoff” has passed. CTS Corp., 134 S. Ct. at 2183 (quoting Lampf, 501 U.S. at 363). It matters not who the plaintiff is, when the alleged injury was suffered, what the plaintiff knew, or when it was known. Nor will any special allowance be made on account of her individual circumstances should the plaintiff fail to file on time. Id. And because the defendant is thus provided with a date certain on which potential ex-

10 posure to liability for a particular act will cease, the defendant is left free to proceed with future plans. McCann, 663 F.3d at 930. C. The Certainty That Statutes Of Re- pose Provide Is A Key Part Of Many Statutory Liability Frameworks Whereas statutes of limitations tend to be viewed merely as procedural, in the sense that they act upon the availability of the plaintiff’s judicial remedies, but not on the parties’ underlying legal rights, see 1 CORMAN, supra, § 1.1, at 4, statutes of repose are ad- dressed to the parties’ substantive legal rights, see id. at 4-5, and to their primary behavior beyond the courtroom. Legislatures enact such statutes to provide assurance to would-be defendants that there is a firm limit on the extent to which their ordinary business activities may come back to haunt them, so that they will be encouraged to continue contributing to the economic health of the Nation without fear of fac- ing stale, ancient claims. That was in fact the major purpose which motivat- ed Congress in 1934 to set the outer limit on liability under the Securities Act for claims that, like respondent’s, allege that the defendant made mis- statements in registration statements or prospectus- es. See 15 U.S.C. § 77m. Early on, Congress recognized that some absolute cutoff was a necessary counterweight to the in terrorem effect of claims under Sections 11 and 12 of the Act. See Pinter v. Dahl, 486 U.S. 622, 646 (1988); Herman & MacLean v. Huddleston, 459 U.S. 375, 381-82 (1983); Norris v. Wirtz, 818 F.2d 1329, 1332-33 (7th Cir. 1987) (noting that statute of repose’s purpose is “to deal with prob-

11 lems of proof—and the invitation to file claims easier to advance than to refute”). The outer limit that orig- inally applied when the Securities Act was passed in 1933 was ten years, see Pub. L. No. 73-22, 48 Stat. 74, 84 (1933), but Congress soon was inundated with “criticisms and complaints … that [such was] too drastic, and [was] interfering with business.” 78 Cong. Rec. 8668 (1934). In shortening the repose period to its present length—three years, and no longer—Congress recognized the need to “give greater assurance to the honest officials of a corporation,” lest they be “deter[red] … from serving on boards of directors” at all. Id. at 8200, 10,186.2 Similar aims are served by statutes of repose that state legislatures enact, which typically are encoun- tered in areas such as construction-defect litigation,3 product-defect litigation,4 professional-malpractice

2 Similar purposes have animated Congress to enact statutes of repose that apply with respect to claims asserted under different portions of the federal securities laws, such as securities fraud under Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b). See 28 U.S.C. § 1658(b)(2); Merck, 559 U.S. at 650 (noting that the statute of repose “giv[es] defendants total repose,” thereby “diminish[ing] th[e] fear” of being “subject … to liability for acts taken long ago”).

3 E.g., MASS. GEN. LAWS ch. 260, § 2B (six-year statute of repose for tort claims “arising out of any deficiency or neglect in the design, planning, construction, or general administration of an improvement to real property”); NEB. REV. STAT. § 25-223 (providing ten-year repose period for similar claims).

4 E.g., GA. CODE § 51-1-11(b)(2) (ten-year repose period).

12 cases,5 consumer-protection or unfair-and-deceptive- practice litigation,6 and state securities laws.7 The reasons why statutes of repose are needed under the federal securities laws obviously are no less applicable to state securities laws. As for construction- and product-defect cases, it is common knowledge that buildings last for decades, and some products last many years as well. If the threat of liability lasted as long as the building or product existed, it might well discourage many from participating in the construction or manufacturing industries altogether. Similar- ly, statutes of repose in the consumer-protection and professional-malpractice spheres assuage fears on the part of those who would enter key professions such as medicine, law and accountancy, or who

5 E.g., MICH. COMP. LAWS § 600.5838b(1)(b) (six-year statute of repose for legal malpractice claims); TENN. CODE § 28-3- 104(c)(2) (five-year repose period for claims against accountants or attorneys “except where there is fraudulent concealment on the part of the defendant, in which case the action or suit shall be commenced within one (1) year after discovery”). For similar reasons—reducing the disincentive to participate in business that the prospect of lingering liabilities creates—statutes of repose also limit the temporal scope of defendants’ liability under many federal consumer-protection schemes as well. See, e.g., 15 U.S.C. §§ 1635(f) (Truth in Lending Act), 1681p(2) (Fair Credit Reporting Act), 1691e(f) (Equal Credit Opportunity Act).

6 E.g., TENN. CODE § 47-18-110 (five-year statute of repose for consumer protection act claims); WIS. STAT. § 425.307(1) (six- year statute of repose for statutory consumer-protection claims asserted in an affirmative, rather than defensive, posture).

7 E.g., CAL. CORP. CODE § 25506(b) (five-year statute of repose for private state securities law claims); TEX. REV. CIV. STAT. art. 581, § 33(H)(2)(b) (same).

13 would choose to start a business and sell goods or services to the public at large. In addition, statutes of repose in these contexts may also serve to add important balance to otherwise plaintiff-friendly legal frameworks, much as they do in the federal-securities-law context. For example, state consumer-protection statutes, like the Securi- ties Act of 1933, may not require the plaintiff to prove traditional tort-law elements like intent to deceive or reliance; it is enough, under these statutory schemes, that the plaintiff was proximately injured by conduct that is “unfair” or “deceptive,” terms that can be a struggle to define with precision. See, e.g., Pelman ex rel. Pelman v. McDonald’s Corp., 396 F.3d 508, 511 (2d Cir. 2005) (applying N.Y. GEN. BUS. LAW § 349, which “does not require proof of reliance”); State ex rel. Miller v. Pace, 677 N.W.2d 761, 771 (Io- wa 2004) (“[I]t is not necessary … to prove that the violator acted with an intent to deceive, as is re- quired for common law fraud.”); see also Common- wealth v. Fremont Inv. & Loan, 897 N.E.2d 548, 556 (Mass. 2008) (Massachusetts’s consumer-protection statute “mak[es] conduct unlawful which was not unlawful under the common law or any prior statute,” and “does not define unfairness, recognizing that ‘[t]here is no limit to human inventiveness in this field.’” (citations omitted)). A State operating with such a scheme might well choose to temper it by including a statute of repose, in its sound “legislative judgment.” See CTS Corp., 134 S. Ct. at 2183.

II. Reading An Ambiguous Law To Turn A Statute Of Repose Into A Statute Of Limi- tations Is Contrary To This Court’s Longstanding Interpretive Principles As these differences illustrate, adopting a statute of repose is a significant policy choice. Such a statute embodies a “legislative judgment” that after the pre- scribed period of time has elapsed, the plaintiff’s right to seek relief must yield to the defendant’s need for peace, without exception. CTS Corp., 134 S. Ct. at 2183. Statutes of limitations share none of those qualities. Yet here the court of appeals insisted on reading a congressional extension of statutes of limitations as also extending statutes of repose, where the statutory text concededly did not compel that result. And it did so for reasons that disserve certainty and have no proper place in the repose analysis. Ex- tending a statute of limitations based on who the plaintiff is, based on the plaintiff’s individual circumstances, is unremarkable. But extending a statute of repose on that basis is contrary to this Court’s teachings and, indeed, to the very function that statutes of repose serve in our economy. As the court of appeals itself recognized, what is left is no statute of repose at all. Pet. App. 20a. That result disregards this Court’s teachings, not only those explaining the fundamental attributes of statutes of repose, but also those cautioning against unnecessarily reading ambiguous statutory text in a way that would gratui- tously undo those fundamental attributes. This Court should step in to correct that error. As this Court has explained in numerous contexts, statutes are interpreted in light of “background principles of construction,” including the principle that

Congress generally intends not to make certain changes unless it says so expressly. If Congress wants to make a “sea change” in “one of the fundamental precepts” of existing law, it does so “clearly— not obliquely through an ambiguous [statutory] defi- nition.” Bd. of Trustees of Leland Stanford Jr. Univ. v. Roche Molecular Sys., 131 S. Ct. 2188, 2198-99 (2011). Similarly, repeals of or amendments to prior statutes by implication alone are disfavored. See, e.g., Nat’l Ass’n of Homebuilders v. Defenders of Wildlife, 551 U.S. 644, 662-64 & n.8 (2007); Morton v. Mancari, 417 U.S. 535, 551 (1974); Silver v. N.Y. Stock Exch., 373 U.S. 341, 357 (1963); Posadas v. Nat’l City Bank of N.Y., 296 U.S. 497, 503 (1936).8 Similar presumptions apply to established rules of the common law. See, e.g., Rehberg v. Paulk, 132 S. Ct. 1497, 1502 (2012) (presuming that Section 1983 “was not meant to effect a radical departure from ordinary tort law”); Norfolk Redev. & Hous. Auth. v. Chesapeake & Potomac Tel. Co., 464 U.S. 30, 35-36 (1983) (presuming that statutes do not impliedly repeal principles of the common law). That principle is animated by concerns about avoiding the unintended displacement of pre- enactment law, in recognition of the reality that most laws tend to be enacted for good reasons. “Presuma- bly Congress had given serious thought to the earlier

8 The principle traces its origin at least as far back as Lord Coke, if not earlier. See Foster’s Case, 77 Eng. Rep. 1222, 1232 (K.B. 1614) (“[F]orasmuch as Acts of Parliaments are established with such gravity, wisdom and universal consent of the whole realm, for the advancement of the commonwealth, they ought not by any constrained construction out of the general and ambiguous words of a subsequent Act, to be abrogated….”).

16 statute,” and “[b]efore holding that the result of the earlier consideration has been repealed or qualified, it is reasonable for a court to insist on the legisla- ture’s using language showing that it has made a considered determination to that end.” Reg’l Rail Re- org. Act Cases, 419 U.S. 102, 134 (1974) (quoting In re Penn Cent. Transp. Co., 384 F. Supp. 895, 943 (Sp. Ct. R. R. R. A. 1974)). Put differently, the canon reflects the “belief that Congress, focused as it usually is on a particular problem, should not be understood to have eliminated without specific consideration an- other program that was likely the product of sus- tained attention.” Cass. R. Sunstein, Interpreting Statutes in the Regulatory State, 103 HARV. L. REV. 405, 475 (1989). Yet that is precisely what the court of appeals has done here. It has read a term in the extender statute—a term that the court itself concluded was ambiguous—essentially to transform a statute of repose into a statute of limitations. And it has done so based on considerations that have no place in the analysis. Given the important role that a statute of repose serves whenever it is a part of any legislative scheme, courts should not blithely assume, without strong evidence, that Congress meant to alter those time limits. Even where it is clear that Congress’s purpose was to alter ordinary statutes of limitations at the federal or state level, that reasoning does not necessarily translate to the “different” and “distinct” statutes of repose. Where state-law statutes of repose are concerned, an assumption that Congress likely meant to run roughshod over a State’s carefully bal- anced statutory scheme via “ambiguous or imprecise language” would fail to recognize the respect that the

17 legislative branch affords to the independent, sover- eign status of the States in our federal system. See Arizona v. Inter Tribal Council of Ariz., Inc., 133 S. Ct. 2247, 2261 (2013) (Kennedy, J., concurring) (“Er- ror [in construing the preemptive scope of the federal statute] may put at risk the validity and effective- ness of laws that Congress did not intend to disturb and that a State has deemed important to its scheme of governance.”). Likewise, where preexisting federal statutes of repose are at issue, to assume that Con- gress meant to alter them along with statutes of limitations fails to appreciate that the legislative process inherently reflects careful and hard-fought com- promises between competing objectives. As this Court succinctly put it in Rodriguez v. United States, 480 U.S. 522, 526 (1987), “[d]eciding what competing values will or will not be sacrificed to the achieve- ment of particular objectives is the very essence of legislative choice,” and courts do no honor to Con- gress’s choices by presuming that a statute which speaks only of altering statutes of limitations necessarily also “sacrifice[s]” the “distinct purpose[s]” which statutes of repose are meant to achieve. CTS Corp., 134 S. Ct. at 2183. In this case, the court of appeals adopted a reading that would fundamentally disserve the basic purposes of the Securities Act’s statute of repose. Rather than provide defendants with certainty, the Tenth Circuit held, the extender statute chooses instead to provide the respondent federal agency with a guaran- teed length of time in which to sue. The court based that reasoning on its perception that the statute of repose is a “burden” on respondent that Congress would have wanted to ease, to give respondent “the

18 time it needs to do its work.” Pet. App. 41a. But that shift in focus from defendants to plaintiffs is anti- thetical to what statutes of repose are. And within the scheme of the Securities Act—which provides for unusually severe strict-liability causes of action— that decision has the effect of creating liability where Congress wanted there to be none. This Court’s cases show that, before adopting a construction so fundamentally at war with preexisting law, courts must proceed carefully, and only on the basis of clearly expressed congressional intent. Where Congress speaks only of altering the applicable statute of limitations, with no mention of statutes of repose, courts should view the omission as “in- structive.” CTS Corp., 134 S. Ct. at 2185. Without clear proof, Congress should not be read to subject statutes of repose to the type of elemental transfor- mation proposed here. III. The Question Presented Here Is Broadly Significant, And Forum-Shopping May Thwart Further Review For several reasons, the Tenth Circuit’s divergence from the principles set forth above is important and calls for this Court’s review. The issue threatens to recur under numerous other statutes. And even if that were not the case, the decision below alone may be enough to create a magnet for claims like these— claims that properly should be held barred by a statute of repose. First, the particular decision here illustrates how claims under the Securities Act can readily be brought into a jurisdiction seen as having favorable law, especially by a conservator or receiver that rep-

19 resents multiple institutions. The Securities Act has a highly permissive venue provision: a claim can be brought anywhere a defendant transacts business, and service of process may be effected anywhere in the United States. 15 U.S.C. § 77v(a); see Rodriguez de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. 477, 482 (1989) (describing the Securities Act’s venue provision as “broad”). Respondent predicated venue in this case on the fact that one of the failed credit unions was headquartered in Kansas; the other credit union was from California, and respondent never mentioned that it had any connection whatsoever to Kansas. See Compl. ¶¶ 11-20, No. 11-CV-2649 (D. Kan. filed Nov. 28, 2011). Now that the Tenth Circuit has flung wide the door, respondent and others in a position to invoke an extender statute may prefer simply to litigate in that circuit rather than take their chances on this issue somewhere else. And because of the final- judgment rule, interlocutory review of a future decision within the Tenth Circuit will be hard to obtain: a denial of a motion to dismiss based on the statute of repose will be denied, and interlocutory appeal would seem difficult to obtain given the circuit prec- edent. The time to take up this issue is now, while a suitable vehicle places it before the Court. Second, extender statutes have the potential to in- tersect with a wide variety of federal and state statutes of repose. Whenever respondent steps into the shoes of a failed credit union, respondent will be asserting the right to bring any claim that a financial institution can bring, And many such claims may be subject to a statute of repose under federal or state law—anything from defects in the construction of a

20 credit union’s branch offices to malpractice claims against its auditors to state blue-sky laws. See pp. 10-13, supra. Third, and relatedly, extender statutes are not lim- ited to the credit-union context. Indeed, the extender statute at issue here is virtually identical to others which apply to the Federal Deposit Insurance Corpo- ration (FDIC) and the Federal Housing Finance Au- thority (FHFA). See 12 U.S.C. §§ 1821(d)(14), 4617(b)(12). As a result, the decision in this case will have ripple effects across the financial sector of the Nation’s economy. Already, the reasoning of the court of appeals below is being cited to support similar decisions by other courts presiding over those agencies’ lawsuits. See Fed. Hous. Fin. Agency v. HSBC N. Am. Holdings Inc., Nos. 11cv6189, 11cv6201 (DLC), 2014 WL 4276420, at *2-3 (S.D.N.Y. Aug. 28, 2014). Even in the few weeks since the petition was filed, the importance of the question presented to federal and state statutes of repose has grown. Just days ago, the Nevada Supreme Court concluded that the materially identical extender statute that applies to the FDIC displaces state statutes of repose—even one that benefits borrowers that get into disputes with financial institutions. FDIC v. Rhodes, No. 59309, 2014 WL 5486681, at *5 (Nev. Oct. 30, 2014). Nevada has a six-month time limit on actions for a “deficiency judgment”—attempts by a secured credi- tor to recover what the debtor still owes after a foreclosure sale of the collateral. See id. at *1 (citing NEV. REV. STAT. § 40.455(1)). The Nevada trial court held that the time limit is a period of repose, giving borrowers peace of mind six months after their prop-

21 erty is auctioned off. Id. at *2. But by a 4-3 vote, the Nevada Supreme Court held that when the FDIC takes over a failed bank, the FDIC gets six years rather than six months to pursue the debtor for addi- tional money. Id. at *2-8. (This even though the FDIC itself conducted the foreclosure, because it had already been appointed receiver for the bank. Id. at *2.) As the dissenters in Rhodes explained, such decisions fail to follow this Court’s teaching in CTS Corp. that “statutes of repose are distinct from statutes of limitation.” Id. at *8 (Gibbons, C.J., dissenting). The decision below exhibits the same failure. And as Rhodes illustrates, the issue is likely to undermine the certainty available to defendants under federal and state statutes of repose—unless and until this Court steps in. * * * * Congress passed a law relieving respondent from compliance with statutes of limitations for a period of time. Nothing in the extender statute mentions statutes of repose, and the principles the extender statute embodies are completely contrary to the values that underlie a statute of repose. To apply those principles here, and essentially turn the statute of repose into a statute of limitations, is contrary to this Court’s teachings. That is especially true given the harsh form of strict liability available under the Se- curities Act: the statute of repose is one means by which Congress sought to mitigate that harshness, but the statute of repose is now largely neutralized. Whether Congress meant to sweep away otherwise-applicable statutes of repose is a question of vi-

22 tal importance not only to these parties, but to federal courts across the country, to federal legislators in Congress, and to state governments whose policy judgments stand in danger of being swept aside, per- haps even unintentionally, as a result of poorly cho- sen statutory language. The Court should take this opportunity to offer its guidance here, by answering that question. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted.

JOSHUA M. DANIELS GOODWIN PROCTER LLP Exchange Place Boston, MA 02109

November 3, 2014