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Simon v. Orsi

filed: April 7, 1993.


Appeal from the United States District Court for the Northern District of California. D.C. No. CV-87-04629-CAL. Charles A. Legge, District Judge, Presiding

Before: Goodwin, Fernandez, and T.g. Nelson, Circuit Judges.


Neil Orsi ("Orsi"), an NASD-registered representative of Provident Mutual Life Securities Company ("PML"), sold tax-shelter investments to appellants on the basis of allegedly false and fraudulent representations. The district court denied appellants' motion to reinstate their Rule 10b-5 action against PML pursuant to section 27A of the Securities Exchange Act of 1934. The court held that section 27A, a special provision relating to the statute of limitations on private causes of actions, was unconstitutional. We reverse.

In a published opinion, we held that section 27A is constitutional. Gray v. First Winthrop Corp., No. 91-16907, slip op. (9th Cir. April 7, 1993). PML argues that there are two alternative grounds for upholding summary judgment in its favor. See In re Apple Computer Securities Litigation, 886 F.2d 1109, 1112 (9th Cir. 1989), cert. denied, 496 U.S. 943 (1990). First, it contends that appellants failed to move for reinstatement as provided by section 27A. Second, PML maintains that summary judgment is appropriate given appellants' failure to rebut evidence that Orsi was acting outside of PML's statutory control.

Sufficiency of Motion for Reinstatement

PML attacks the sufficiency of appellants' motion for reinstatement on two grounds. First, the motion was not properly filed before the deadline for reinstatement had passed. Second, the motion failed to state that appellants' claim had been timely filed under the laws of the jurisdiction prior to Lampf. We reject both of these claims.

A. Timeliness of motion.

Congress enacted section 27A while appellants' case was pending before the this court. Appellants filed a motion to remand the case to the district court and PML indicated that it would not oppose this motion. Appellants then filed their motion for reinstatement with the district court prior to the sixty-day deadline of section 27A; however, we did not file an order remanding the case to the district court until four days after the deadline had passed. The question before this court is the significance of our failure to remand prior to the sixty-day deadline.

PML argues that the district court was without jurisdiction to entertain the motion because jurisdiction still remained in the circuit court, and therefore the motion was not properly filed under section 27A. PML draws this Conclusion based upon caselaw dealing with Federal Rule of Civil Procedure 60(b), which provides for a new trial on the ground of newly discovered evidence. See, e.g., In re Visioneering Constr., 661 F.2d 119, 124 n.6 (9th Cir. 1981) ("Once a notice of appeal is filed jurisdiction is vested in the Court of Appeals, and the trial court thereafter has no power to modify its judgment in the case or proceed further except by leave of the Court of Appeals.").

However, a closer examination of our treatment of Rule 60(b) motions yields a contrary Conclusion. In Canadian Ingersoll-Rand Co. v. Peterson Products of San Mateo, Inc., 350 F.2d 18 (9th Cir. 1965), one of the parties had appealed to this court, and, while the case was pending, the party moved in district court for an order indicating whether it would be willing to consider a Rule 60(b) motion. Id. at 26. If the district court indicated its willingness to consider the Rule 60(b) motion, the litigant would have a basis for asking the circuit court to remand to the district court. The district court declined to entertain the motion and there was no remand by the circuit court. Id. at 27.

We noted that the district court was without jurisdiction to grant or deny the Rule 60(b) motion: "no such order could have been entered prior to a remand, since the district court would have been without jurisdiction to do so." Id. However, we held that the Rule 60(b) "motion was timely filed and if appellants find any virtue in pursuing it . . . they are free to do so following the final Disposition of this appeal." Id. at 28.

In other words, although the district court did not have jurisdiction to consider the merits of the Rule 60(b) motion prior to remand by the circuit court, the filing of the motion with the district court was sufficient to meet the requirement of a timely filing.

Similarly, in the present case, it is undisputed that the district court lacked jurisdiction to act upon appellants' motion for reinstatement until we remanded the case. The district court complied with this jurisdictional requirement, not acting on the motion until after the order of remand was filed. By the same token, appellants' motion for reinstatement was timely filed since it was filed prior to the sixty-day deadline. As with a Rule 60(b) motion, the fact ...

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