The Supreme Court granted certiorari today in Merck & Co., et al., v. Reynolds, et al. (08-905), a case involving the issue of “inquiry notice” as it applies to federal securities fraud claims.
The specific “Question Presented,” as framed by the petitioners in their Petition for Writ of Certiorari (available here), is as follows:
Did the Third Circuit err in holding, in accord with the Ninth Circuit but in contrast to nine other Courts of Appeals, that under the “inquiry notice” standard applicable to federal securities fraud claims, the statute of limitations does not begin to run until an investor receives evidence of scienter without the benefit of any investigation?
In this case, shareholders alleged that Merck provided misleading information about the risks of Vioxx. The U.S. District court dismissed the case on the grounds that the plaintiffs’ claims were time-barred under the statute of limitations. However, the Third Circuit Court of Appeals reversed the lower court’s ruling (opinion available here, via SCOTUSBlog), allowing the case to proceed.