NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.

No. 90-333

[June 20, 1991]

Justice Blackmun delivered the opinion of the Court, except as to Part II-A.

In this litigation we must determine which statute of limitations is applicable to a private suit brought pursuant to 10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, 15 U.S.C. 78j(b), and to Securities and Exchange Commission Rule 10b-5, 17 CFR 240.10b-5 (1990), promulgated thereunder.


The controversy arises from the sale of seven Connecticut limited partnerships formed for the purpose of purchasing and leasing computer hardware and software. Petitioner Lampf, Pleva, Lipkind, Prupis & Petigrow is a West Orange, N. J., law firm that aided in organizing the partnerships and that provided additional legal services, including the prepa ration of opinion letters addressing the tax consequences of investing in the partnerships. The several plaintiff-respondents purchased units in one or more of the partnerships during the years 1979 through 1981 with the expectation of realizing federal income tax benefits therefrom.

The partnerships failed, due in part to the technological obsolescence of their wares. In late 1982 and early 1983, plaintiff-respondents received notice that the United States Internal Revenue Service was investigating the partnerships. The IRS subsequently disallowed the claimed tax benefits because of overvaluation of partnership assets and lack of profit motive.

On November 3, 1986, and June 4, 1987, plaintiff-respondents filed their respective complaints in the United States District Court for the District of Oregon, naming as defendants petitioner and others involved in the preparation of offering memoranda for the partnerships. The complaints alleged that plaintiff-respondents were induced to invest in the partnerships by misrepresentations in the offering memoranda, in violation of, among other things, 10(b) of the 1934 Act and Rule 10b-5. The claimed misrepresentations were said to include assurances that the investments would entitle the purchasers to substantial tax benefits; that the leasing of the hardware and software packages would generate a profit; that the software was readily marketable; and that certain equipment appraisals were accurate and reasonable. Plaintiff-respondents asserted that they became aware of the alleged misrepresentations only in 1985 following the disallowance by the IRS of the tax benefits claimed.

After consolidating the actions for discovery and pretrial proceedings, the District Court granted summary judgment for the defendants on the ground that the complaints were not timely filed. App. to Pet. for Cert. 22A. Following precedent of its controlling court, see, e. g., Robuck v. Dean Witter & Co., 649 F. 2d 641 (CA9 1980), the District Court ruled that the securities claims were governed by the state statute of limitations for the most analogous forum-state cause of action. The court determined this to be Oregon's 2-year limitations period for fraud claims, Ore. Rev. Stat. 12.110(1) (1989). The court found that reports to plaintiffrespondents detailing the declining financial status of each partnership and allegations of misconduct made known to the general partners put plaintiff-respondents on "inquiry notice" of the possibility of fraud as early as October 1982. App. to Pet. for Cert. 43A. The court also ruled that the distribution of certain fiscal reports and the installation of a general partner previously associated with the defendants did not constitute fraudulent concealment sufficient to toll the statute of limitations. Applying the Oregon statute to the facts underlying plaintiff-respondents' claims, the District Court determined that each complaint was time barred.

The Court of Appeals for the Ninth Circuit reversed and remanded the cases. See Reitz v. Leasing Consultants Associates, 895 F. 2d 1418 (1990) (judgment entry). In its unpublished opinion, the Court of Appeals found that unresolved factual issues as to when plaintiff-respondents discovered or should have discovered the alleged fraud precluded summary judgment. Then, as did the District Court, it selected the 2-year Oregon limitations period. In so doing, it implicitly rejected petitioner's argument that a federal limitations period should apply to Rule 10b-5 claims. App. to Pet. for Cert. 8A. In view of the divergence of opinion among the Circuits regarding the proper limitations period for Rule 10b-5 claims, [n.1] we granted certiorari to address this important issue. — U. S. — (1990).


Plaintiff-respondents maintain that the Court of Appeals correctly identified common-law fraud as the source from which 10(b) limitations should be derived. They submit that the underlying policies and practicalities of 10(b) litigation do not justify a departure from the traditional practice of "borrowing" analogous state-law statutes of limitations. Petitioner, on the other hand, argues that a federal period is appropriate, contending that we must look to the "1-and-3year" structure applicable to the express causes of action in 13 of the Securities Act of 1933, 48 Stat. 84, as amended, 15 U.S.C. 77m and to certain of the express actions in the 1934 Act, see 15 U.S.C. 78i(e), 78r(c), and 78cc(b). [n.2] The Solicitor General, appearing on behalf of the Securities Exchange Commission, agrees that use of a federal period is indicated, but urges the application of the 5-year statute of repose specified in 20A of the 1934 Act, 15 U.S.C. 78t-1(b)(4), as added by 5 of the Insider Trading and Securities Fraud Enforcement Act of 1988, 102 Stat. 4681. The 5-year period, it is said, accords with "Congress's most recent views on the accommodation of competing interests, provides the closest federal analogy, and promises to yield the best practical and policy results in Rule 10b-5 litigation." Brief for Securities and Exchange Commission as Amicus Curiae 8. For the reasons discussed below, we agree that a uniform federal period is indicated, but we hold that the express causes of action contained in the 1933 and 1934 Acts provide the source.


It is the usual rule that when Congress has failed to provide a statute of limitations for a federal cause of action, a court "borrows" or "absorbs" the local time limitation most analogous to the case at hand. Wilson v. Garcia, 471 U.S. 261, 266-267 (1985); Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 704 (1966); Campbell v. Haverhill, 155 U.S. 610, 617 (1895). This practice, derived from the Rules of Decision Act, 28 U.S.C. 1652 has enjoyed sufficient longevity that we may assume that, in enacting remedial legislation, Congress ordinarily "intends by its silence that we borrow state law." Agency Holding Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143, 147 (1987).

The rule, however, is not without exception. We have recognized that a state legislature rarely enacts a limitations period with federal interests in mind, Occidental Life Ins. Co. v. EEOC, 432 U.S. 355, 367 (1977), and when the operation of a state limitations period would frustrate the policies embraced by the federal enactment, this Court has looked to federal law for a suitable period. See, e. g., DelCostello v. Teamsters, 462 U.S. 151 (1983); Agency Holding Corp., supra; McAllister v. Magnolia Petroleum Co., 357 U.S. 221, 224 (1958). These departures from the state-borrowing doctrine have been motivated by this Court's conclusion that it would be "inappropriate to conclude that Congress would choose to adopt state rules at odds with the purpose or operation of federal substantive law." DelCostello, 462 U. S., at 161.

Rooted as it is in the expectations of Congress, the "state-borrowing doctrine" may not be lightly abandoned. We have described federal borrowing as "a closely circumscribed exception," to be made "only `when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking.' " Reed v. United Transportation Union, 488 U.S. 319, 324 (1989), quoting DelCostello, 462 U. S., at 172.

Predictably, this determination is a delicate one. Recognizing, however, that a period must be selected, [n.3] our cases do provide some guidance as to whether state or federal borrowing is appropriate and as to the period best suited to the cause of action under consideration. From these cases we are able to distill a hierarchical inquiry for ascertaining the appropriate limitations period for a federal cause of action where Congress has not set the time within which such an action must be brought.

First, the court must determine whether a uniform statute of limitations is to be selected. Where a federal cause of action tends in practice to "encompass numerous and diverse topics and subtopics," Wilson v. Garcia, 471 U. S., at 273, such that a single state limitations period may not be consistently applied within a jurisdiction, we have concluded that the federal interests in predictability and judicial economy counsel the adoption of one source, or class of sources, for borrowing purposes. Id., at 273-275. This conclusion ultimately may result in the selection of a single federal provision, see Agency Holding Corp., supra, or of a single variety of state actions. See Wilson v. Garcia (characterizing all actions under 42 U.S.C. 1983 as analogous to a state-law personal injury action).

Second, assuming a uniform limitations period is appropriate, the court must decide whether this period should be derived from a state or a federal source. In making this judgment, the court should accord particular weight to the geographic character of the claim:

"The multistate nature of [the federal cause of action at issue] indicates the desirability of a uniform federal statute of limitations. With the possibility of multiple state limitations, the use of state statutes would present the danger of forum shopping and, at the very least, would `virtually guarante[e] . . . complex and expensive litigation over what should be a straightforward matter.' " Agency Holding Corp., 483 U. S., at 154, quoting Report of the Ad Hoc Civil RICO Task Force of the ABA Section of Corporation, Banking and Business Law 392 (1985).

Finally, even where geographic considerations counsel federal borrowing, the aforementioned presumption of state borrowing requires that a court determine that an analogous federal source truly affords a "closer fit" with the cause of action at issue than does any available state-law source. Although considerations pertinent to this determination will neces sarily vary depending upon the federal cause of action and the available state and federal analogues, such factors as commonality of purpose and similarity of elements will be relevant.


In the present litigation, our task is complicated by the nontraditional origins of the 10(b) cause of action. The text of 10(b) does not provide for private claims. [n.4] Such claims are of judicial creation, having been implied under the statute for nearly half a century. See Kardon v. National Gypsum Co., 69 F. Supp. 512 (ED Pa. 1946), cited in Ernst & Ernst v. Hochfelder, 425 U.S. 185, 196, n. 16 (1976). Although this Court repeatedly has recognized the validity of such claims, see Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 730 (1975); Affiliated Ute Citizens v. United States, 406 U.S. 128, 150-154 (1972); Superintendent of Insurance v. Bankers Life & Cas. Co., 404 U.S. 6, 13, n. 9 (1971), we have made no pretense that it was Congress' design to provide the remedy afforded. See Ernst & Ernst, 425 U. S., at 196 ("[T]here is no indication that Congress, or the Commission when adopting Rule 10b-5, contemplated such a remedy.") (footnotes omitted). It is therefore no surprise that the provision contains no statute of limitations.

In a case such as this, we are faced with the awkward task of discerning the limitations period that Congress intended courts to apply to a cause of action it really never knew existed. Fortunately, however, the drafters of 10(b) have provided guidance.

We conclude that where, as here, the claim asserted is one implied under a statute that also contains an express cause of action with its own time limitation, a court should look first to the statute of origin to ascertain the proper limitations period. We can imagine no clearer indication of how Congress would have balanced the policy considerations implicit in any limitations provision than the balance struck by the same Congress in limiting similar and related protections. See DelCostello, 462 U. S., at 171; United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 69-70 (1981) (opinion concurring in judgment). When the statute of origin contains comparable express remedial provisions, the inquiry usually should be at an end. Only where no analogous counterpart is available should a court then proceed to apply state-borrowing principles.

In the present litigation, there can be no doubt that the contemporaneously enacted express remedial provisions represent "a federal statute of limitations actually designed to accommodate a balance of interests very similar to that at stake here — a statute that is, in fact, an analogy to the present lawsuit more apt than any of the suggested state-law parallels." DelCostello, 462 U. S., at 169. The 1934 Act contained a number of express causes of action, each with an explicit limitations period. With only one more restrictive exception, [n.5] each of these includes some variation of a 1-year period after discovery combined with a 3-year period of repose. [n.6] In adopting the 1934 Act, the 73d Congress also amended the limitations provision of the 1933 Act, adopting the 1-and-3-year structure for each cause of action contained therein. [n.7]

Section 9 of the 1934 Act, 15 U.S.C. 78i pertaining to the willful manipulation of security prices, and 18, 15 U.S.C. 78r relating to misleading filings, target the precise dangers that are the focus of 10(b). Each is an integral element of a complex web of regulations. Each was intended to facilitate a central goal: "to protect investors against manipulation of stock prices through regulation of transactions upon securities exchanges and in over-thecounter markets, and to impose regular reporting requirements on companies whose stock is listed on national securities exchanges." Ernst & Ernst, 425 U. S., at 195, citing S. Rep. No. 792, 73d Cong., 2d Sess., 1-5 (1934).


We therefore conclude that we must reject the Commission's contention that the 5-year period contained in 20A, added to the 1934 Act in 1988, is more appropriate for 10(b) actions than is the 1-and-3-year structure in the Act's original remedial provisions. The Insider Trading and Securities Fraud Enforcement Act of 1988, which became law more than 50 years after the original securities statutes, focuses upon a specific problem, namely, the "purchasing or selling [of] a security while in possession of material, nonpublic information," 15 U.S.C. 78t-1(a), that is, "insider trading." Recognizing the unique difficulties in identifying evidence of such activities, the 100th Congress adopted 20A as one of "a variety of measures designed to provide greater deterrence, detection and punishment of violations of insider trading." H. R. Rep. No. 100-910, p. 7 (1988). There is no indication that the drafters of 20A sought to extend that enhanced protection to other provisions of the 1934 Act. Indeed, the text of 20A indicates the contrary. Section 20A(d) states: "Nothing in this section shall be construed to limit or condition the right of any person to bring an action to enforce a requirement of this chapter or the availability of any cause of action implied from a provision of this chapter." 15 U.S.C. 78t-1(d).

The Commission further argues that because some conduct that is violative of 10(b) is also actionable under 20A, adoption of a 1-and-3-year structure would subject actions based on 10(b) to two different statutes of limitations. But 20A also prohibits insider-trading activities that violate sections of the 1934 Act with express limitations periods. The language of 20A makes clear that the 100th Congress sought to alter the remedies available in insider trading cases, and only in insider trading cases. There is no inconsistency.

Finally, the Commission contends that the adoption of a 3year period of repose would frustrate the policies underlying 10(b). The inclusion, however, of the 1-and-3-year structure in the broad range of express securities actions contained in the 1933 and 1934 Acts suggests a congressional determination that a 3-year period is sufficient. See Ceres Partners v. GEL Associates, 918 F. 2d 349, 363 (CA2 1990).

Thus, we agree with every Court of Appeals that has been called upon to apply a federal statute of limitations to a 10(b) claim that the express causes of action contained in the 1933 and 1934 Acts provide a more appropriate statute of limitations than does 20A. See Ceres Partners, supra; Short v. Belleville Shoe Mfg. Co., 908 F. 2d 1385 (CA7 1990), cert. pending, No. 90-526; In re Data Access Systems Securities Litigation, 843 F. 2d 1537 (CA3), cert. denied sub nom. Vitiello v. I. Kahlowski & Co., 488 U.S. 849 (1988).

Necessarily, we also reject plaintiff-respondents' assertion that state-law fraud provides the closest analogy to 10(b). The analytical framework we adopt above makes consideration of state-law alternatives unnecessary where Congress has provided an express limitations period for correlative remedies within the same enactment. [n.8]


Finally, we address plaintiff-respondents' contention that, whatever limitations period is applicable to 10(b) claims, that period must be subject to the doctrine of equitable tolling. Plaintiff-respondents note, correctly, that "[t]ime requirements in law suits . . . are customarily subject to `equitable tolling.' " Irwin v. Veterans Administration, — U. S. —, — ( 1990) (slip op. 5), citing Hallstrom v. Tillamook County, 493 U.S. 20, — (1989) (slip op. 6). Thus, this Court has said that in the usual case, "where the party injured by the fraud remains in ignorance of it without any fault or want of diligence or care on his part, the bar of the statute does not begin to run until the fraud is discovered, though there be no special circumstances or efforts on the part of the party committing the fraud to conceal it from the knowledge of the other party." Bailey v. Glover, 21 Wall. 342, 348 (1874); see also Holmberg v. Armbrecht, 327 U.S. 392, 396-397 (1946). Notwithstanding this venerable principle, it is evident that the equitable tolling doctrine is fundamentally inconsistent with the 1-and-3-year structure.

The 1-year period, by its terms, begins after discovery of the facts constituting the violation, making tolling unnecessary. The 3-year limit is a period of repose inconsistent with tolling. One commentator explains: "[T]he inclusion of the three-year period can have no significance in this context other than to impose an outside limit." Bloomenthal, The Statute of Limitations and Rule 10b-5 Claims: A Study in Judicial Lassitude, 60 U. Colo. L. Rev. 235, 288 (1989). See also ABA Committee on Federal Regulation of Securities, Report of the Task Force on Statute of Limitations for Implied Actions 645, 655 (1986) (advancing "the inescapable conclusion that Congress did not intend equitable tolling to apply in actions under the securities laws"). Because the purpose of the 3-year limitation is clearly to serve as a cutoff, we hold that tolling principles do not apply to that period.


Litigation instituted pursuant to 10(b) and Rule 10b-5 therefore must be commenced within one year after the discovery of the facts constituting the violation and within three years after such violation. [n.9] As there is no dispute that the earliest of plaintiff-respondents' complaints was filed more than three years after petitioner's alleged misrepresentations, plaintiff-respondents' claims were untimely. [n.10]

The judgment of the Court of Appeals is reversed.

It is so ordered.


1 See, e. g., Nesbit v. McNeil, 896 F. 2d 380 (CA9 1990) (applying state limitations period governing common-law fraud); Bath v. Bushkin, Gaims, Gaines and Jonas, 913 F. 2d 817 (CA10 1990) (same); O'Hara v. Kovens, 625 F. 2d 15 (CA4 1980), cert. denied, 449 U.S. 1124 (1981) (applying state blue sky limitations period); Forrestal Village, Inc. v. Graham, 179 U. S. App. D. C. 225, 551 F. 2d 411 (1977) (same); In re Data Access Systems Securities Litigation, 843 F. 2d 1537 (CA3), cert. denied sub nom. Vitiello v. I. Kahlowski & Co., 488 U.S. 849 (1988) (establishing uniform federal period); Short v. Belleville Shoe Mfg. Co., 908 F. 2d 1385 (CA7 1990), cert. pending, No. 90-526 (same).

2 Although not identical in language, all these relate to one year after discovery and to three years after violation.

3 On rare occasions, this Court has found it to be Congress' intent that no time limitation be imposed upon a federal cause of action. See, e. g., Occidental Life Ins. Co. v. EEOC, 432 U.S. 355 (1977). No party in the present litigation argues that this was Congress' purpose in enacting 10(b), and we agree that there is no evidence of such intent.

4 Section 10 of the 1934 Act provides:

"It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange —

. . . . .

"(b) To use or employ, in connection with the purchase or sale of any security . . . any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors." 15 U.S.C. 78j.

Commission Rule 10b-5, first promulgated in 1942, now provides:

"It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,

"(a) To employ any device, scheme, or artifice to defraud,

"(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or

"(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, "in connection with the purchase or sale of any security." 17 CFR 240.10b-5 (1990).

5 Section 16(b), 15 U.S.C. 78p(b), sets a 2-year rather than a 3-year period of repose. Because that provision requires the disgorgement of unlawful profits and differs in focus from 10(b) and from the other express causes of action, we do not find 16(b) to be an appropriate source from which to borrow a limitations period here.

6 Section 9(e) of the 1934 Act provides:

"No action shall be maintained to enforce any liability created under this section, unless brought within one year after the discovery of the facts constituting the violation and within three years after such violation." 15 U.S.C. 78i(e).

Section 18(c) of the 1934 Act provides:

"No action shall be maintained to enforce any liability created under this section unless brought within one year after the discovery of the facts constituting the cause of action and within three years after such cause of action accrued." 15 U.S.C. 78r(c).

7 Section 13 of the 1933 Act, as so amended, provides:

"No action shall be maintained to enforce any liability created under section 77k or 77l(2) of this title unless brought within one year after the discovery of the untrue statement or the omission, or after such discovery should have been made by the exercise of reasonable dilligence, or, if the action is to enforce a liability created under section 77l(1) of this title, unless brought within one year after the violation upon which it is based. In no event shall any such action be brought to enforce a liability created under section 77k or 77l(1) of this title more than three years after the security was bona fide offered to the public, or under section 77l(2) of this title more than three years after the sale." 15 U.S.C. 77m.

8 Justice Kennedy would borrow the one-year limitations period contained in the 1934 Act but not the accompanying period of repose. In our view, the one-and-three-year scheme represents an indivisible determination by Congress as to the appropriate cutoff point for claims under the statute. It would disserve that legislative determination to sever the two periods. Moreover, we find no support in our cases for the practice of borrowing only a portion of an express statute of limitations. Indeed, such a practice comes close to the type of judicial policymaking that our borrowing doctrine was intended to avoid.

9 The Commission notes, correctly, that the various 1-and-3-year periods contained in the 1934 and 1933 Acts differ slightly in terminology. To the extent that these distinctions in the future might prove significant, we select as the governing standard for an action under 10(b) the language of 9(e) of the 1934 Act, 15 U.S.C. 78i(e).

10 Section 313(a) of the Judicial Improvements Act of 1990, 104 Stat. 5114, reads:

"Except as otherwise provided by law, a civil action arising under an Act of Congress enacted after the date of the enactment of this section may not be commenced later than 4 years after the cause of action accrues."

Section 313(b) states that the "amendments made by this section shall apply with respect to causes of action accruing on or after the date [December 1, 1990] of the enactment of this Act." This new statute obviously has no application in the present litigation.