250
Stevens, J., dissenting
state law.3 The relevant Kentucky statute provided a 3-year limitations period,4 which petitioners contended ran from the time the alleged fraud was or should have been discovered. A Magistrate agreed with petitioners and recommended denial of respondents' motion to dismiss, but by 1991 the District Court had not yet ruled on that issue. The factual question whether petitioners should have discovered respondents' alleged 10b-5 violations more than three years before they filed suit remained open for decision by an Article III judge on June 20, 1991.
On that day, this Court's decision in Lampf changed the law. The Court concluded that every 10b-5 action is time barred unless brought within three years of the alleged violation and one year of its discovery. Moreover, it applied that novel rule to pending cases. As Justice O'Connor pointed out in her dissent, the Court held the plaintiffs' suit "time barred under a limitations period that did not exist before," a holding that "depart[ed] drastically from our established practice and inflict[ed] an injustice on the [plaintiffs]." Lampf, 501 U. S., at 369.5 The inequitable consequences of Lampf reached beyond the parties to that case,
3 "Federal judges have 'borrowed' state statutes of limitations because they were directed to do so by the Congress of the United States under the Rules of Decision Act, 28 U. S. C. § 1652." Lampf, 501 U. S., at 367, n. 2 (Stevens, J., dissenting) (citations omitted); see, e. g., Stull v. Bayard, 561 F. 2d 429, 431-432 (CA2 1977), cert. denied, 434 U. S. 1035 (1978); Roberts v. Magnetic Metals Co., 611 F. 2d 450, 456 (CA3 1979); Robuck v. Dean Witter & Co., 649 F. 2d 641, 644 (CA9 1980) (borrowing state statutes of limitations for 10b-5 actions).
4 See Ky. Rev. Stat. Ann. § 292.480(3) (Michie 1988).
5 The Lampf opinion drew two other dissents. Justice Kennedy, joined by Justice O'Connor, would have adopted a different substantive limitations rule. See 501 U. S., at 374. Justice Souter and I would have adhered to "four decades of . . . settled law" and maintained the existing regime until Congress enacted a new federal statute of limitations. Id., at 366-367 (Stevens, J., dissenting). No one dissented from the proposition that a uniform federal limitations period would be wise policy.
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