60 days after the date of enactment of this section.
Federal Deposit Insurance Corporation Improvement Act of 1991, Pub. L. 102-242, 105 Stat. 2387 (1991). The motivating force behind this statutory amendment was to limit the 1-and-3-year limitations period adopted in Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 111 S. Ct. 2773, 115 L. Ed. 2d 321 (1991), to prospective application. Under the amendment, this court must look to the state of Seventh Circuit law as it existed on June 19, 1991, one day prior to the decision date in both Lampf and James B. Beam Distilling Co. v. Georgia, 111 S. Ct. 2882, 115 L. Ed. 2d 1048 (1991). Ironically, as of June 19, 1991, the Seventh Circuit had already held that the 1-and-3-year limitations period of § 13, 15 U.S.C. § 77m, applies to actions brought under § 10(b) and Rule 10b-5. Short v. Belleville Shoe Manufacturing Co., 908 F.2d 1385, 1389 (7th Cir. 1990), cert. denied, 111 S. Ct. 2887, 115 L. Ed. 2d 1052 (1991); see also Pommer v. Medtest Corp., 961 F.2d 620, 627 (7th Cir. 1992) ("The rule in this circuit on June 19 was the federal period . . . established by Short in 1990."). Accordingly, whether Otto's claims must be reinstated under the new amendment turns on whether Short should be applied retroactively.
Prior to addressing the retroactivity issue, however, we pause to note that Otto's motion to reconsider has been filed approximately eleven months after the enactment of § 27A. As such, defendants argue that Otto's current motion must be denied as untimely. Pointing to § 27A(b), defendants maintain that Otto's motion should have been brought by February 18, 1992, sixty days after the date of enactment of § 27A. Whether Otto's motion is in fact overdue depends on whether subsection (b) of § 27A applies to this cause rather than subsection (a), i.e., whether her claims were "dismissed" as time barred subsequent to June 19, 1991. Otto attempts to invoke subsection (a), claiming that the impact of our November 18, 1992 order was merely to "limit pending causes of action." This argument is not well taken. That this court construed each "purchase" as supporting a separate and independent cause of action, if not clearly discernable from the November 18, 1991 ruling, was explicitly stated in our order dated December 18, 1991. Otto, 1991 U.S. Dist. LEXIS 18095, at *1 ("later reinvestments of interest constitute "purchases" capable of supporting separate and independent violations of § 10(b) and Rule 10b-5"). Further, that multiple causes of action were embodied in a single count does not alter the fact that those separate causes of action arising prior to August 2, 1979 were in fact "dismissed," as that term is used in § 27A(b) of the 1934 Act. Accordingly, Otto's window to file a motion to reinstate those claims dismissed as a result of our November 18, 1991 order expired on February 18, 1992 and, hence, her motion to reconsider must be denied as untimely.
In any event, as a substantive matter, Otto cannot prevail on her motion because Short applies retroactively to her claims. Recently, in McCool v. Strata Oil Co., 972 F.2d 1452, 1459 (7th Cir. 1992), the Seventh Circuit for the first time addressed the question of Short's retroactive application. The McCool court found that "the controlling precedent on June 19, 1991 was Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S. Ct. 349, 30 L. Ed. 2d 296 (1971)," noting that "Chevron Oil requires a case-by-case balancing of three factors to decide whether a new rule will be applied to the parties before the court. McCool, 972 F.2d at 1459. In essence, the Chevron Oil balancing test requires retroactive application of new statutes of limitation unless "the plaintiff can demonstrate reliance on the old limitations period." Id. As this court explained in Lewis v. Hermann, 1992 U.S. Dist. LEXIS 3547, at *3 (N.D. Ill. Mar. 19, 1992):
The issue of reliance arises as an exception to retroactive application in those rare cases where "a plaintiff learned of a claim within the three-year period, but, relying on existing law providing for a longer limitations period, elected to wait until after the three-year period before filing suit."
There is no dispute that Otto did not elect to belatedly file suit in reliance on the Illinois blue-sky statute. Indeed, Otto concedes that, under this court's interpretation of Chevron Oil, Short must be applied retroactively. Otto, however, attempts to circumvent this result by urging the court to blindly adopt the "law of the case" as it existed in January of 1990. Otto reasons that because defendants' previously did not assert Short as a bar to plaintiff's claims, defendants are estopped from now relying on the three-year limitation period and are bound by our pre-Short ruling, dated January 19, 1990. We disagree. Section 27A requires this court to determine the state of the law applicable in this jurisdiction on June 19, 1991, "including principles of retroactivity." This analysis, mandated by statute, is unyielding. Otto cannot at once embrace the statute in attempt to avoid the three-year limitations period and, at the same time, disavow its impact based on ill-conceived notions of estoppel.
At root, Otto has failed to establish reliance in any form. Accordingly, we will apply Short retroactively to the instant case, and Otto's motion to reconsider is denied. It is so ordered.
MARVIN E. ASPEN
United States District Judge
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