Third Circuit, it is much closer to Marshall-Silver than to either Barticheck or Saporito. Moreover, I do not believe that the complaint describes the type of criminal activity that the RICO statute was designed to arrest. Therefore, I find the factual scenario alleged by the Schwartz's fails to satisfy the pattern requirement of section 1962(c).
C. Section 1962(d)
Section 1962(d) makes it unlawful for persons to conspire to violate sections 1962(a), (b), or (c). A claim cannot be made under § 1962(d), then, in the absence of a viable claim under § 1962(a), (b), or (c). Because no viable claim has been made under any of those sections in the present case, plaintiffs' § 1962(d) claim also fails. See Leonard v. Shearson Lehman/American Express, Inc., 687 F. Supp. 177, 182 (E.D. Pa. 1988).
II. Rule 10b-5 Count
Count VIII of the amended complaint alleges that defendants' conduct violated section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission, 17 C.F.R. § 240 10b-5 (1987). On the motion to dismiss, defendants allege numerous deficiencies in plaintiff's Rule 10b-5 count. As explained below, I need address only one of the claimed deficiencies: the applicable statute of limitations.
Plaintiffs Ilene T. and Steven Schwartz filed their initial complaint on March 28, 1988 and amended it on June 29, 1988. In paragraph 16 of the amended complaint, plaintiffs allege that, although the exact dates of defendants' alleged warranties and promises are unknown, defendants made and reiterated those warranties and promises and plaintiffs relied on them in 1985 and 1986. Again, in paragraph 22, plaintiffs allege that they relied upon defendants' representations and promises and began doing business with PNB "throughout 1985 and 1986 and other periods of time." Similarly, they contend that defendants "breached their expressed and implied warranties to the plaintiffs and broke their promises, on September 24, 1986, October 6, 1986, and other specific transaction dates." Amended Complaint, § 24. Finally, plaintiffs allege that their trading with PNB began in January 1985 and continued throughout 1985 and 1986. Id., para. 41.
Prior to 1988, the Third Circuit had twice considered the proper limitations period for section 10(b) and Rule 10b-5 cases. In Roberts v. Magnetic Metals Co., 611 F.2d 450 (3d Cir. 1979), Judges Gibbons and Sloviter applied the period set forth in the state general fraud statute; in dissent, then Chief Judge Seitz would have applied the states Blue Sky law. One year later the court decided Biggans v. Bache Halsey Stuart Shields, Inc., 638 F.2d 605 (3d Cir. 1980). In Biggans, Judge Sloviter and Gibbons opted for the state general fraud statute, while Judge Weis selected the state Blue Sky law. Thus, by the end of 1980, four judges from the Third Circuit had considered the issue: two would have applied the state general fraud laws and two would have used the Blue Sky statutes. Thus, at that time, and I conclude at all times relevant to the instant action, "the law in the circuit on this point could fairly be described as uncertain." Hill v. Equitable Trust Co., 851 F.2d 691, 697 (3d Cir. 1988).
The shroud of uncertainty was lifted finally in In re Data Access Systems Securities Litigation, 843 F.2d 1537 (3d Cir. 1988), cert. denied sub nom Vitiello v. V.I. Kahlowsky and Co., 488 U.S. 849, 109 S. Ct. 131, 102 L. Ed. 2d 103 (1988), in which the Third Circuit set forth the statute of limitations applicable to Rule 10b-5 claims. The court stated:
Accordingly, we have decided that the proper period of limitations for a complaint charging violation of section 10(b) and Rule 10b-5 is one year after the plaintiff discovers the facts constituting the violation, and in no event more than three years after such violation.