Commercial Litigation and Arbitration

Inquiry Notice — Statute of Limitations — Documents That May Be Considered on a 12(b)(6) Motion

Although the Second Circuit did not find the statute of limitations defense viable in Staehr v. Hartford Fin. Servs., 2008 U.S. App. LEXIS 23551 (2d Cir. Nov. 16, 2008), it identified a series of documents that could properly be considered on a 12(b)(6) motion without converting the motion to one for summary judgment. The permissible documents include complaints (filings) in other lawsuits, regulatory filings and media articles, as long as they are not considered for the truth of their contents:

The District Court took judicial notice of, inter alia, media reports, state court complaints, and regulatory filings..... The court did "not take judicial notice of the documents for the truth of the matters asserted in them, but rather to establish that the matters [had] been publicly asserted." ***

We have previously held that it is proper to take judicial notice of the fact that press coverage, prior lawsuits, or regulatory filings contained certain information, without regard to the truth of their contents, in deciding whether so-called "storm warnings" were adequate to trigger inquiry notice as well as other matters. See Global Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006) ("A court may take judicial notice of a document filed in another court not for the truth of the matters asserted in the other litigation but rather to establish the fact of such litigation and related filings." (citation omitted)); Kavowras v. N.Y. Times Co. , 328 F.3d 50, 57 (2d Cir. 2003) (SEC filings); LC Capital Partners, 318 F.3d at 155 (press coverage and prior litigation); Kramer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir. 1991) ("[C]ourts routinely take judicial notice of documents filed in other courts . . . to establish [*51] the fact of such litigation and related filings."). In Kramer, we found that the district court could take judicial notice of, inter alia, the publicized condition of the junk bond market during the relevant time period. The reference was not relied on for its truth, and so was not "a ground for decision and does not run afoul of the rule that a district court must confine itself to the four corners of the complaint when deciding a motion to dismiss under Rule 12(b)(6)." 937 F.2d at 773; accord DeBenedictis v. Merrill Lynch & Co., Inc., 492 F.3d 209, 214 (3d Cir. 2007) (taking judicial notice of USA Today and Time Magazine articles submitted by defendants).

Here, the District Court did not abuse its discretion in denying Appellants' motion to strike the materials submitted by Appellees for judicial notice purposes. The materials, like those in Kramer, were offered to show that certain things were said in the press, and that assertions were made in lawsuits and regulatory filings, which is all that is required to trigger inquiry notice. None of those materials were offered for the truth of the matter asserted.

***Although the general rule is that a district court may not look outside the complaint and the documents attached thereto in ruling on a Rule 12(b) motion to dismiss, we have acknowledged that the court "may also consider matters of which judicial notice may be taken." Kramer, 937 F.2d at 773. We have stated that, "Dismissal under FED. R. CIV. P. 12(b)(6) is appropriate when a defendant raises . . . [a statutory bar] as an affirmative defense and it is clear from the face of the complaint, and matters of which the court may take judicial notice, that the plaintiff's claims are barred as a matter of law." Conopco, Inc. v. Roll Int'l, 231 F.3d 82, 86 (2d Cir. 2000) (emphasis added). Appellee's motion to dismiss pursuant to FED. R. CIV. P. 12(b)(6) was a proper means to plead that the claim should be dismissed as untimely.

***[A] defendant may raise an affirmative defense in a pre-answer Rule 12(b)(6) motion if the defense appears on the face of the complaint. ***

While we have no quarrel with the District Court's decision to take judicial notice of what information was "out there," we do disagree with its conclusion that the total mix of information before it was sufficient to rule, as a matter of law, that an investor of ordinary intelligence was on inquiry notice of The Hartford's allegedly fraudulent conduct by July 2001.

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