Case: 13-3750 Document: 003111781804 Page: 1 Date Filed: 10/31/2014 No. 13-3750 _______________________________________________________________ IN THE United States Court of Appeals for the Third Circuit _______________ ALAN W. SCHMIDT Plaintiff-Appellant, v. JOHN A. SKOLAS; LEANNE KELLY; JOHN L. ARMSTRONG, JR.; ZOLA B. HOROVITZ, Ph. D.; OSAGIE O. IMASOGIE; MITCHELL D. KAYE; ROBERT F. SHAPIRO; PAUL K. WOTTON; ROBERT DELUCCIA; DAVID LUCI; STEVE ROUHANDEH; JEFFREY DAVIS; MARK ALVINO; GENAERA LIQUIDATING TRUST; BIOTECHNOLOGY VALUE FUND, INC.; LIGAND PHARMACEUTICALS, INC.; XMARK CAPITAL PARTNERS, LLC; ARGYCE LLC; OHR PHARMACEUTICAL; JOHN L. HIGGINS; GENAERA CORP.; SCO FINANCIAL GROUP; DIPEXIUM PHARMACEUTICALS, LLC; MACROCHEM CORP.; ACCESS PHARMACEUTICALS, INC.; MARK N. LAMPERT Defendants-Appellees. ______________________ On Appeal from a Judgment of the United States District Court for the Eastern District of Pennsylvania ______________ PETITION FOR PANEL REHEARING AND REHEARING EN BANC ______________ Case: 13-3750 Document: 003111781804 Page: 2 Date Filed: 10/31/2014 Michael L. Kichline Sabrina Reliford Katherine Unger Davis DECHERT LLP Cira Centre 2929 Arch Street Philadelphia, PA 19104-2808 Tel: (215) 994-4000 (main) Fax: (215) 994-2222 (main) Counsel for Appellees John Skolas; Leanne Kelly; John Armstrong; Zola Horovitz; Osagie Imasogie; Robert Shapiro; Paul Wotton; Genaera Liquidating Trust; Argyce LLC Additional counsel and parties appear on the signature page. Case: 13-3750 Document: 003111781804 Page: 3 Date Filed: 10/31/2014 TABLE OF CONTENTS I. INTRODUCTION ............................................................................................... 1 II. FACTUAL HISTORY AND PROCEDURAL BACKGROUND ..................... 3 III. ARGUMENTS IN SUPPORT OF REHEARING .............................................. 5 A. The Majority Opinion Contradicts United States Supreme Court Authority Requiring a Plaintiff to Plead Facts Sufficient to State a Claim to Relief That is “Plausible on its Face” ................................................... 5 B. Contrary to Supreme Court and Third Circuit Precedent, the Majority Opinion‟s Application of the Discovery Rule Fails to Adhere to Governing Pennsylvania State Law .......................................................... 9 C. To the Extent the Majority Analyzed Whether Schmidt Exercised Reasonable Diligence, It Did So In Error ...............................................12 D. The Majority‟s Ruling That the Claims Against the D&Os Are Subject to the Discovery Rule Conflicts with Third Circuit Authority – and the Majority‟s Own Analysis ........................................................................14 IV. CONCLUSION .................................................................................................15 i Case: 13-3750 Document: 003111781804 Page: 4 Date Filed: 10/31/2014 TABLE OF AUTHORITIES CASES Page(s) Ashcroft v. Iqbal, 556 U.S. 662 (2009) .....................................................................................passim Barefoot Architect, Inc. v. Bunge, 632 F.3d 822 (3d Cir. 2011) ................................................................................. 8 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) .....................................................................................passim Bruffett v. Warner Commc’ns, Inc., 692 F.2d 910 (3d Cir. 1982) ............................................................................... 14 Byrnes v. DeBolt Transfer Inc., 741 F.2d 620 (3d Cir. 1984) ............................................................................. 2, 8 Ciccarelli v. Carey Canadian Mines, Ltd., 757 F.2d 548 (3d Cir. 1985) ................................................................................. 9 Crouse v. Cyclops Indus., 745 A.2d 606 (Pa. 2000) ..................................................................................... 13 Dalrymple v. Brown, 701 A.2d 164 (Pa. 1997) ..................................................................................... 12 Erlich v. Ouellette, Labonte, Roberge & Allen, P.A., 637 F.3d 32 (1st Cir. 2011) ................................................................................... 6 Fine v. Checcio, 870 A.2d 850 (Pa. 2005) ........................................................................... 2, 10, 11 Fox v. Byrne, 525 A.2d 428 (Pa. Super. Ct. 1987) ...................................................................... 8 Gleason v. Borough of Moosic, 15 A.3d 479 (Pa. 2011) ................................................................................. 12, 13 Goodman v. Mead Johnson & Co., 534 F.2d 566 (3d Cir. 1976) ................................................................................. 9 ii Case: 13-3750 Document: 003111781804 Page: 5 Date Filed: 10/31/2014 Henderson v. Reid, 371 F. App‟x 51 (11th Cir. 2010) ......................................................................... 6 In re marchFIRST Inc., 589 F.3d 901 (7th Cir. 2009) ................................................................................ 7 In re Mushroom Transportation Co., 382 F.3d 325 (3d Cir. 2004) ............................................................................... 11 Johnson v. Marrs, No. 4706 JULY.TERM 2002 010380, 2005 WL 957631, at *1 (Pa. Com. Pl. Apr. 20, 2005) ................................................................................................ 12 Logan v. Wilkins, 644 F.3d 577 (7th Cir. 2011) ................................................................................ 6 Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154 (3d Cir. 2001) ................................................................................. 9 NYLife Distribs., Inc. v. Adherence Grp., Inc., 72 F.3d 371 (3d Cir. 1995) ................................................................................... 9 Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380 (3d Cir. 1994) ............................................................................. 2, 7 Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192 (3d Cir. 1993) ............................................................................... 9 Pension Trust Fund for Operating Eng’rs v. Mortg. Asset Sec. Transactions, Inc., 730 F.3d 263 (3d Cir. 2013) ....................................................................... 13 Pryor v. Nat’l Collegiate Athletic Ass’n, 288 F.3d 548 (3d Cir. 2002) ................................................................................. 5 Robinson v. Johnson, 313 F.3d 128 (3d Cir. 2002) ............................................................................... 14 Rowinski v. Salomon Smith Barney Inc., 398 F.3d 294 (3d Cir. 2005) ................................................................................. 9 Spence v. ESAB Grp., Inc., 623 F.3d 212 (3d Cir. 2010) ............................................................................... 10 iii Case: 13-3750 Document: 003111781804 Page: 6 Date Filed: 10/31/2014 USPPS, Ltd. v. Avery Dennison Corp., 326 F. App‟x 842 (5th Cir. 2009) ......................................................................... 6 Vernau v. Vic’s Market, Inc., 896 F.2d 43 (3d Cir. 1990) ................................................................................... 9 Vitalo v. Cabot Corp., 399 F.3d 536 (3d Cir. 2005) ............................................................................... 10 RULES Page(s) Fed. R. Civ. P. 8 ..................................................................................................... 5, 8 Fed. R. Civ. P. 9 ........................................................................................................ 8 Fed. R. Civ. P. 12(b)(6) .............................................................................................. 6 iv Case: 13-3750 Document: 003111781804 Page: 7 Date Filed: 10/31/2014 CERTIFICATE OF BELIEF THAT PANEL RECONSIDERATION OR EN BANC CONSIDERATION IS WARRANTED I express a belief, based on a reasoned and studied professional judgment, that the Panel decision in this matter is contrary to decisions of the United States Court of Appeals for the Third Circuit or the Supreme Court of the United States, and that consideration by the full Court is necessary to secure and maintain uniformity of decisions in this Court, i.e., the panel‟s decision is contrary to the decisions of the Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and that this appeal involves questions of exceptional importance, inter alia, what a plaintiff in federal court must plead to invoke the discovery rule under Pennsylvania law and whether Pennsylvania would apply a separate and higher standard to the invocation of the discovery rule in the fiduciary-relationship context than it does in every other context. Dated: October 31, 2014 /s/ Michael L. Kichline Michael L. Kichline Dechert LLP Cira Centre 2929 Arch Street Philadelphia, PA 19104 (215) 994-4000 v Case: 13-3750 Document: 003111781804 Page: 8 Date Filed: 10/31/2014 I. INTRODUCTION In its October 17, 2014, precedential decision, a divided panel of this Court reversed and remanded this action for further proceedings, concluding that the District Court had “prematurely” dismissed Plaintiff‟s complaint at the pleading stage on statute of limitations grounds despite (i) Plaintiff‟s admission that “we missed the two-year period” and (ii) the unanimous agreement of the Panel that Plaintiff failed to allege in his complaint