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Keywords

plaintiffstatutemotiondue processstatute of limitationsrespondent

appealdue processrespondent

Related Cases

Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 115 S.Ct. 1447, 131 L.Ed.2d 328, 63 USLW 4243, Fed. Sec. L. Rep. P 98,681

Facts

In 1987, petitioners filed a civil action against respondents, alleging fraud in the sale of stock in violation of § 10(b) of the Securities Exchange Act. The District Court dismissed the action with prejudice after the Supreme Court's decision in Lampf, which established a one-year statute of limitations for such claims. Following the enactment of § 27A(b), which allowed for the reinstatement of certain claims dismissed as time-barred, petitioners sought to reinstate their action, but the District Court denied the motion, citing the unconstitutionality of the statute.

In 1987, petitioners brought a civil action against respondents in the United States District Court for the Eastern District of Kentucky. The complaint alleged that in 1983 and 1984 respondents had committed fraud and deceit in the sale of stock in violation of § 10(b) of the Securities Exchange Act of 1934 and Rule 10b–5 of the Securities and Exchange Commission.

Issue

Whether § 27A(b) of the Securities Exchange Act of 1934, which requires federal courts to reopen final judgments in private civil actions under § 10(b), contravenes the Constitution's separation of powers or the Due Process Clause of the Fifth Amendment.

The question presented in this case is whether § 27A(b) of the Securities Exchange Act of 1934, to the extent that it requires federal courts to reopen final judgments in private civil actions under § 10(b) of the Act, contravenes the Constitution's separation of powers or the Due Process Clause of the Fifth Amendment.

Rule

The Supreme Court ruled that Congress cannot require federal courts to reopen final judgments, as this violates the separation of powers established in Article III of the Constitution.

Held: Section 27A(b) contravenes the Constitution's separation of powers to the extent that it requires federal courts to reopen final judgments entered before its enactment.

Analysis

The Court found that § 27A(b) clearly requires federal courts to reopen final judgments, which is a violation of the judicial power granted to the courts. The Court emphasized that the Constitution forbids legislative interference with final judgments, and that retroactive legislation like § 27A(b) exceeds congressional authority. The Court also noted that the Framers intended for the judiciary to have the final say in cases and controversies, and that Congress cannot alter the finality of judicial decisions.

We conclude that in § 27A(b) Congress has exceeded its authority by requiring the federal courts to exercise “[t]he judicial Power of the United States,” U.S. Const., Art. III, § 1, in a manner repugnant to the text, structure, and traditions of Article III.

Conclusion

The Supreme Court affirmed the lower court's ruling, holding that § 27A(b) is unconstitutional as it violates the separation of powers by requiring federal courts to reopen final judgments.

Affirmed.

Who won?

The respondents prevailed in the case because the Supreme Court upheld the lower court's decision that § 27A(b) was unconstitutional, thus denying the plaintiffs' motion to reinstate their claims.

The Court of Appeals affirmed.

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