Opinions of the United
1997 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


9-16-1997

Algrant v. Evergreen Valley
Precedential or Non-Precedential:

Docket
96-1994




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Recommended Citation
"Algrant v. Evergreen Valley" (1997). 1997 Decisions. Paper 219.
http://digitalcommons.law.villanova.edu/thirdcircuit_1997/219


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Filed September 16, 1997

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 96-1994

ROLAND R. ALGRANT; THE DOUGLAS F. ALLISON
TRUST; ANCHOR SALES ASSOCIATES, INC; DANIEL
AVERY; JAMES B. BAGLEY; THOMAS S. BORON; MARY
PAT BORON; FRANKLIN EDWARD CATER, JR.; PAUL W.
DLABAL; MICHAEL B. ELEFANTE; HERBERT FISHER;
SUSAN E. HAAR; MARILYN C. HARLIN; STEVEN G.
HOROWITZ; HERBERT J. HOSTETLER; RUDOLPH S.
MAURIZI ESTATE; DR. P. JAGANNADHA REDDY; E.W.
RICHARDON, JR.; PATRICK RUPPERT; SUSAN SLOAN;
NARENDRA K. SOOD; USHA R. SOOD; GEORGE L.
YONANO; LUCRETIA L. YONANO,
       Appellants,

v.

EVERGREEN VALLEY NURSERIES LIMITED
PARTNERSHIP; THE PARKINSON PENSION TRUST; E.
WAYNE POCIUS; RUSSELL M. DIMMICK; VAN PINES OF
PA; WILLIAM L. PARKINSON, DR.; UNIQUE GARDEN
CENTER COMPANY

An Appeal from the United States District Court
for the Eastern District of Pennsylvania
Civil Action No. 95-CV-7224

Argued June 13, 1997

Before: MANSMANN, NYGAARD and ROSENN,
Circuit Judges.

(Opinion Filed September 16, 1997)




       Alexander D. Bono (argued)
       Timothy D. Katsiff
       Blank, Rome, Comisky & McCauley
       1200 Four Penn Center Plaza
       Philadelphia, PA 19103
       Counsel for Appellants

       E. Parry Warner (argued)
       Obermayer, Rebmann, Maxwell &
        Hippell
       One Penn Center, 19th Floor
       1617 John F. Kennedy Boulevard
       Philadelphia, PA 19103-1895
       Counsel for Appellees The Parkinson
        Pension Trust and Dr. William L.
        Parkinson

       Joseph A. McGinley (argued)
       Lavin, Coleman, O'Neil, Ricci,
        Finarelli & Gray
       510 Walnut Street, Suite 1000
       Philadelphia, PA 19106
       Counsel for Appellees E. Wayne
        Pocius, Russell M. Dimmick,
        Van Pines of Pennsylvania,
        and Unique Garden Center
        Company

OPINION OF THE COURT

ROSENN, Circuit Judge.

This appeal raises two important issues of first
impression in this court relating to commercial promissory
obligations and securities. First, whether the obligors on
unmatured promissory notes can obtain declaratory relief
against the obligees of those notes and have the notes
declared void and unenforceable, when the concurrent legal
remedy underlying the request for declaratory relief would
be barred by the statute of limitations. Second, whether
transactions involving investment securities are covered
under section 9.2(a) of the Pennsylvania Unfair Trade

                                2



Practices and Consumer Protection Law ("UTP/CPL"), which
creates a private right of action for consumers injured in
the purchase or lease of goods or services. The United
States District Court for the Eastern District of
Pennsylvania held that the action for declaratory relief was
time-barred because the corollary legal actions were based
on conduct for which the statute of limitations had run.
The court also held that investment securities are not
"goods" under the UTP/CPL. The plaintiffs timely appealed.
We affirm.

I.

Taking the facts in the light most favorable to the
plaintiffs, as did the district court, it appears that in 1986
the defendants organized Evergreen Valley Nurseries
Limited Partnership ("Evergreen") to acquire, grow and sell
nursery stock. The nursery stock consisted of
approximately 950,000 evergreen trees ("nursery stock") on
two leased properties in Pennsylvania, one in Lehigh
County (called "Raven Valley") and one in Tioga County
(called "the Tioga Farm"). In July 1986, the Parkinson
Pension Trust ("Trust"), at the direction of Dr. William L.
Parkinson, its sole trustee, purchased the Raven Valley
nursery stock from Van Pines of Pennsylvania ("Van Pines")
and its general partners for approximately $3.6 million. E.
Wayne Pocius and Russell Dimmick are the general
partners of Van Pines and are also the sole shareholders of
Unique Garden Center ("Unique"), the general partner of
Evergreen. The Trust then purchased the Tioga Farm
nursery stock from Pocius and Dimmick for approximately
$600,000.

Following the acquisition of the nursery stock by the
Trust, Evergreen then purchased an undivided 91.2%
interest in the Trust's nursery stock for the price of $10.4
million. Evergreen financed the purchase of the nursery
stock by a $13.5 million offering of Evergreen limited
partnership units, pursuant to a private placement
memorandum ("PPM"). A substantial number of these units
purchased by the plaintiffs are the genesis of this lawsuit.
They paid $150,000 for each unit under the terms of the
PPM; the purchase price consisted of a $70,000 cash

                                3



payment, a $9,500 subscription note due on January 20,
1997, and a $70,500 promissory note ("investor note")
payable to the Trust, which became due and payable on
July 1, 1996.

The PPM issued by Evergreen did not disclose that
Evergreen was to pay the Trust approximately $10.4 million
for 91.2% of the nursery stock which the Trust had
purchased from Evergreen for about $4.2 million. Thus, it
failed to disclose that the purchase price for the interest in
land had more than doubled in two months. The PPM did
not mention the intricate entanglement of the parties
involved in the underlying transactions or the self-dealing
in the purchase of the nursery stock.

In 1989, the Internal Revenue Service ("IRS") issued a
report concluding that the price of the nursery stock had
been significantly overvalued. Although Evergreen initially
contested the IRS report, in 1993 Evergreen and the IRS
entered into a closing agreement in which Evergreen
admitted that the nursery stock had been over-valued by at
least $3.2 million. On October 11, 1993, the plaintiffs
obtained a copy of the closing agreement between the IRS
and Evergreen.
The plaintiffs filed their complaint in the district court on
November 16, 1995, raising four claims. The first three
claims sought a declaratory judgment that certain Investor
Notes were void and unenforceable because they had been
procured through fraud: (I) declaratory relief under Section
29(b) of the Securities Exchange Act of 1934, 15 U.S.C.
S 78cc(b) (Supp. 1997); (II) declaratory relief under Section
508 of the Pennsylvania Securities Act, 70 Pa. Cons. Stat.
S 1-508 (1994); and (III) declaratory relief based on common
law fraud. Count IV alleged a violation of the UTP/CPL. The
plaintiffs asserted that because of the Trust's expressed
intent to collect on the investor notes in July 1996, they
were compelled to bring this action to declare the notes void
and unenforceable.

The defendants moved to dismiss the complaint pursuant
to Federal Rule of Civil Procedure 12(b)(6) for failing to state
a claim upon which relief could be granted. The district
court dismissed Counts I, II, and III as time-barred and

                                4



dismissed Count IV for failing to state a claim on which
relief can be granted. The plaintiffs appealed from the
dismissal of all four claims.

II.

When reviewing a motion to dismiss under Rule 12(b)(6)
on statute of limitations grounds, the court exercises
plenary review to determine "whether `the time alleged in
the statement of a claim shows that the cause of action has
not been brought within the statute of limitations.' " Cito v.
Bridgewater Township Police Dep't, 

, 25 (3d Cir.
1989) (citations and emphasis omitted). This court
exercises plenary review over a district court order
dismissing a complaint pursuant to Rule 12(b)(6) for failure
to state a claim upon which relief can be granted. Moore v.
Tartler, 

, 685 (3d Cir. 1993).

Because actions for declaratory relief do not have their
own statute of limitations, the district court concluded that
the plaintiffs' causes of action are governed by the period of
limitations applicable to the substantive claims underlying
the action, citing Cope v. Anderson, 

, 463-64
(1947). Thus, the district court held that the statute of
limitations to be applied would be the same regardless of
the posture of the case, whether offensive or defensive.
Accordingly, if the underlying action is time-barred, so is
the action for declaratory relief. Judge Huyett, the trial
judge, then perceptively determined that Counts I, II, and
III were all barred by the applicable statutes of limitations.

Although this court of appeals has not yet spoken on the
issue, a number of other courts have. The First, Sixth,
Ninth and Tenth Circuit Courts of Appeals have all held
that an action for declaratory relief will be barred to the
same extent the applicable statute of limitations bars the
concurrent legal remedy. International Ass'n of Machinists
& Aerospace Workers v. Tennessee Valley Authority, 

, 668 (6th Cir. 1997); Levald, Inc. v. City of Palm
Desert, 

, 688-89 (9th Cir. 1993); Gilbert v. City
of Cambridge, 

, 57-58 (1st Cir. 1991); Clulow v.
Oklahoma, 

, 1302 (10th Cir. 1983)."It is
settled, therefore, that where legal and equitable claims

                                5



coexist, equitable remedies will be withheld if an applicable
statute of limitations bars the concurrent legal remedy."

. The Court of Appeals for the
Second Circuit, applying state law, has also held that when
a "claim for declaratory relief could have been resolved
through another form of action which has a specific
limitations period, the specific period of time will govern."
Town of Orangetown v. Gorsuch, 

, 41-42 (2d
Cir. 1983) (applying New York law). As the district court
found in this case, see infra at p. 10-12, the plaintiffs'
claims could have been resolved by available timely legal
remedies, including an action to rescind under the federal
Securities Exchange Act of 1934. See Gatto v. Meridian
Medical Associates, Inc., 

, 842 (3d Cir. 1989).

The aforementioned courts which applied federal law
relied on analogous Supreme Court precedent to reach this
conclusion. In Russell v. Todd, 

, 289 (1940),
the Court recognized the long-standing doctrine that"when
the jurisdiction of the federal court is concurrent with that
at law, or the suit is brought in aid of a legal right, equity
will withhold its remedy if the legal right is barred by the
local statute of limitations." In Cope v. 

, the Court reiterated this position, stating that
"equity will withhold its relief in such a case where the
applicable statute of limitations would bar the concurrent
legal remedy." We have followed this proposition. See Gruca
v. United States Steel Corp., 

, 1257 (3d Cir.
1974). However, neither the Supreme Court nor this court
has addressed the question in the posture in which it is
presented in the instant case.

The plaintiffs argue that the statute of limitations does
not bar an action for declaratory relief based on a claim
that is purely defensive in nature. For this proposition, they
rely heavily on this court's opinion in Silverman v. Eastrich
Multiple Investor Fund, L.P., 

(3d Cir. 1995). In
Silverman, the plaintiff moved in federal court for injunctive
and declaratory relief to proclaim a guaranty void after the
defendants confessed judgment in state court against the
loan guarantors, including the plaintiff. 

The
defendants moved for dismissal, asserting that the claim
was time-barred under the Equal Credit Opportunity Act

                                6



("ECOA") on which the plaintiff guarantor relied. 

The trial court granted the motion. 

we held
that when the creditor endeavors to enforce the guaranty
the claim could be asserted "as a defense to the state
confession of judgment." 

In Silverman, the
defendants had not only obtained judgment, in contrast to
this case where no action has yet begun on the notes, but
enforcement of the judgment was imminent. Thus, there
the plaintiffs' challenge to the confession of judgment was
defensive.

Although Silverman did allow the assertion of a defensive
claim after the statute of limitations on the underlying
violation had run, the holding was definitely moored to the
plaintiff 's defensive position in response to the state
confession of judgment. The court stated:

       There are numerous circumstances under which a
       guarantor may institute an action to declare his or her
       guaranty void and seek damages or other relief. The
       expiration of the statute of limitations calculated from
       the execution of said guaranty may bar the institution
       of such independent action. No such bar exists,
       however, to the utilization of such grounds as a
       

. The court noted that "plaintiff retained the
right to assert the violation when efforts were made to
collect and enforce the Guaranty." 

In Silverman, the plaintiff had no prior opportunity to
respond to the state court confession of judgment, thus
limiting her available remedies to the equitable claim she
pursued. 

noted that "[the plaintiff's] ECOA
claim was raised in direct response to Eastrich's state court
confession of judgment, which did not require or provide for
an answering pleading. . . . Thus, in essence, plaintiff's
alleged ECOA violation is asserted as a defense to the state
confession of judgment." 

plaintiffs'
assertions in the instant case, Silverman does not stand for
the proposition that an independent action offensively for
declaratory relief from potential liability on a note may be
brought even though the plaintiff had a legal remedy before
the statute of limitations on the concurrent legal remedy

                                7



had run. On the contrary, Silverman holds only that where
judgment has been confessed, a purported obligor may
assert as a defense to its enforcement a statutory violation
which would have been time-barred if asserted offensively
in an independent action.1 In this instant case, however,
the creditors have taken no legal action to collect on the
Investors Notes, plaintiffs have no voidable judgment, and
recoupment is not now before us.

The Supreme Court set forth in Bull v. United States, 

(1935), a rationale similar to Silverman. Bull, a
partner in a ship-brokering business, died in February and
his estate continued to receive the profits of his partnership
for one year after his death. 

His estate valued
the partnership only by the profits received up to Bull's
death. The United States, however, declared all profits
received by the estate to be corpus under the estate tax and
taxed the property accordingly. The estate did not challenge
the assessment at the time. 

Four years later,
the United States notified the estate that the same property
was income and taxable as such. 

The estate
then pursued the administrative remedies to challenge the
double taxation of the same property. When the final
administrative appeal had been rejected, the estate brought
an action in the Court of Claims, seeking a refund of the
amount paid as income tax or, in the alternative, a refund
for the tax paid on the same property when the estate tax
was paid. 

The Court of Claims found that the
statute of limitations barred the second ground for relief,
seeking correction of the estate tax. 

_________________________________________________________________

1. The other cases cited by the plaintiffs are equally distinguishable on
the same grounds. See Sony Electronics v. Putnam, 

(D.N.J. 1995) (party could bring time-barred claim as defense to action
to collect on guaranty but could not assert claim as counterclaim
seeking monetary damages); FDIC v. Medmark, Inc., 

(D. Kan. 1995) (party could assert time-barred claim defensively in action
by lender to collect on guaranty); Integra Bank/Pittsburgh v. Freeman,

(E.D. Pa. 1993) (party could assert time-barred claim
by way of recoupment in action by lender to collect on guaranty); Mellon
Bank, N.A. v. Pasqualis-Politi, 

(W.D. Pa. 1992) (party
could assert defense which could not be asserted affirmatively because
of the bar of the statute of limitations when lender brought action to
collect on mortgage and notes).
                                8



The Court in Bull first determined that the portion of the
profits paid the estate was income, not corpus, and thus
wrongly subjected to the estate tax as such. 

The
Court then held that the claim for refund of the estate tax
was not barred by the statute of limitations. The Court
noted that, prior to the institution of proceedings to collect
income tax on the same property, the estate had no
grounds to seek a refund of the money as a product of
double taxation. Additionally, the Court noted that, under
the law, "[p]ayment precedes defense" when challenging a
tax assessment. 

Therefore, the estate was
entitled to raise the claim only as a defense after paying the
income tax on the same profits.

       If the claim for income tax deficiency had been the
       subject of a suit, any counter demand for recoupment
       of the overpayment of estate tax could have been
       asserted by way of defense and credit obtained
       notwithstanding the statute of limitations barred an
       independent suit against the Government therefor. This
       is because recoupment is in the nature of a defense
       arising out of some feature of the transaction upon
       which the plaintiff's action is grounded. Such a
       defense is never barred by the statute of limitations so
       long as the main action itself is timely.

. The Court then determined that "[the
Government] has given [the estate] a right of credit or
refund, which though he could not assert it in an action
brought by him in 1930, had accrued and was available to
him since it was actionable and not barred in 1925, when
the Government proceeded against him for the collection of
income tax. The pleading was sufficient to put in issue the
right to recoupment." 

Thus, the estate's claim
was not barred by the statute of limitations. 

Silverman, recognizes that a claim can be raised
defensively even if it would be barred if brought
independently. Like Silverman, the plaintiff in Bull had no
opportunity to present the claim as a defense to the tax
assessment, having been summarily assessed with the tax
and later compelled to pursue administrative remedies
before seeking legal adjudication of the right to refund.
Therefore, despite the unusual posture of the case, the

                                9



claim was not time-barred because the Court considered it
as a defense to the judgment obtained against the estate
administratively.2 The crux of the decision was the
existence of a claim against the estate. In the present
matter, the plaintiffs could have asserted their claims
independently by an action to rescind or other legal options
within the time allowed by the statute of limitations. They
chose not to do so. Therefore, their remedy now is to wait
until the Trust seeks to collect on the notes and then assert
the claims defensively. However, in the absence of any
action taken against them to collect the debt, plaintiffs are
not entitled to bring an independent action essentially
seeking a recision by posturing it as defensive.

Moreover, the plaintiffs' action before us is not saved by
the doctrine of recoupment. Under Pennsylvania law, "the
defense asserted by way of recoupment must be related to
the nature of the demand brought by the plaintiff." Mellon
Bank, N.A. v. Pasqualis-Politi, 

, 1301
(W.D. Pa. 1992) (citing Porter v. Levering, 

, 484
(1938)). As the Pennsylvania Supreme Court noted in
Household Consumer Discount Co. v. Vespaziani, 

, 694 (Pa. 1980), recoupment is not a set-off "because
it is not in the nature of a cross demand, but rather it
lessens or defeats any recovery by the plaintiff."
Recoupment, then, is a defensive claim which can only be
asserted in response to an independent action instituted by
another party; recoupment does not permit the party
asserting it to present otherwise time-barred claims simply
by creative pleading in an independent proceeding brought
by it.

The dissent, in concluding that this declaratory judgment
action may be maintained despite the long lapse of time
since the alleged frauds were committed, focuses on the
_________________________________________________________________

2. In United States v. Dalm, 

, 608 (1990), the Supreme
Court stated that "our decisions in Bull and [Stone v. White, 

(1937)] stand only for the proposition that a party litigating a tax
claim in a timely proceeding may, in that proceeding, seek recoupment
of a related, and inconsistent, but now time-barred tax claim relating to
the same transaction." Therefore, the Supreme Court has very
specifically limited the holding of Bull, and the holding is not
applicable
to the situation sub judice.

                                10



"defendants' expected enforcement of a future obligation,"
dis. op. at 25, rather than on the acts of fraud which is the
basis of plaintiffs' present claims. The dissent asserts that
the "substantive claim Algrant seeks to vindicate in
pursuing Counts I through III is the claim that Algrant is
not liable for future obligations under the Investors Notes."
Dis. op. at 21. The plaintiffs, however, allege that the
Investor Notes were obtained by fraud and specific intent to
deceive and "are void and unenforceable in their entirety
because they were induced by fraud" and were made in
violation of the 1934 Federal Securities Exchange Act, the
Pennsylvania Securities Act, and Pennsylvania common
law. The potential collection on the notes is at this time
only a possibility, not an action in court. However, the door
has been closed to the right to rescind the notes, and other
legal options for relief under the federal and state statutes,
and Pennsylvania common law which the plaintiffs cannot
now open at this late date by an offensive independent
action. As the Court of Appeals for the Second Circuit
stated, if "a claim for declaratory relief could have been
resolved through another form of action which has a
specific limitations period, the specific period of time will
govern." Georgetown v. Gorsuch, 

, 42 (2d Cir.)
cert. denied 

(1984).

The theory of plaintiffs' case, and with which the dissent
agrees, is that they are entitled to declaratory relief now
and need not wait until action is taken to collect on the
notes, because they would raise the fraud defense in such
an event. The court in Gilbert responded to a similar
argument in these words:

       We find this idea, albeit precocious, to be equally
       unavailing. The temporal bar cannot be sidestepped
       merely by asserting that the appellants' declaratory
       judgment suit was brought to establish defenses
       against the rainy day, in the future, when the
       Ordinance might be enforced against them . . . . Such
       a smoke-and-mirrors approach would place far too
       much priority on theoretical possibilities at the expense
       of practical actualities, requiring us, in the last
       analysis, to treat aggressor as defender, petitioner as
       respondent. In effect, it would serve to make justiciable

                                11



       claims which were simultaneously stale (i.e., time-
       barred as to the actual permit denial) and unripe (i.e.,
       not yet mature as to any potential enforcement action).
       The decided cases are to the 

.

We, therefore, hold that when plaintiffs' claims are barred
by a statute of limitations applicable to a concurrent legal
remedy, then a court will withhold declaratory judgment
relief in an independent suit essentially predicated upon
the same cause of action. Otherwise, the statute of
limitations can be circumvented merely by "[d]raping their
claim in the raiment of the Declaratory Judgment Act." 

Accordingly, we turn to each of the plaintiffs' claims
to determine whether the claim would be barred by the
applicable statute of limitations.

A.

The district court dismissed Count I as time-barred.
Count I sought declaratory relief that, pursuant to S 29(b)
of the Securities Exchange Act of 1934, 15 U.S.C. S 78cc(b),
the promissory investor notes were void and unenforceable
because they were obtained by fraud in violation of federal
securities laws. Under the statute of limitations actually set
forth in S 29(b) an action pursuant to that section is barred
one year from the time of discovery of the violation of the
federal securities laws and three years from the time the
violation occurred. Gatto v. Meridian Medical Assoc., 

. The district court held that this claim,
brought more than two years after the discovery of the
fraud and almost nine years after the transaction, was
barred by the statute of limitations under S 29(b). Applying
the statute of limitations from the corollary action to the
plaintiffs' claim for declaratory relief, we see no error in the
district court's dismissal of the claim as time-barred.

B.

The district court also dismissed Count II as time-barred.
Count II sought a declaratory judgment that, pursuant to
section 508 of the Pennsylvania Securities Act ("PSA"), 70

                                12



Pa. Cons. Stat. S 1-508, the investor notes were void and
unenforceable because they were induced by fraud in
violation of Pennsylvania securities law. The district court
concluded that the applicable statute of limitations was the
one/four year statute of limitations, pursuant to 70 Pa.
Cons. Stat. S 1-504. Section 504(a) states:

       No action shall be maintained to enforce any liability
       under section 501 (or section 503 in so far as it relates
       to that section) unless brought before the expiration of
       four years after the act or transaction constituting the
       violation or the expiration of one year after the plaintiff
       receives actual notice or upon the exercise of
       reasonable diligence should have known of the facts
       constituting the violation, whichever shall first expire.
70 Pa. Cons. Stat. S 1-504. Plaintiffs challenge application
of this statute of limitations to their claim, asserting that
the statute of limitations set forth in S 504 expressly does
not apply to claims brought pursuant to S 508.

Section 508 of the PSA provides that:

       No person may base any suit on any contract in
       violation of this act or any rule or order hereunder if he
       has made or engaged in the performance of such
       contract or has acquired any purported right under
       any such contract with knowledge of the facts by
       reason of which its making or performance was in
       violation.

70 Pa. Cons. Stat. S 1-508. The plaintiffs have premised
their claim for declaratory relief under this section of the
PSA. This section, however, does not create an affirmative
cause of action on which the plaintiffs can seek relief.

Section 506 puts clear limitations on a party's ability to
assert a right of action under the PSA. According to that
provision:

       Except as explicitly provided in this act, no civil
       liability in favor of any private party shall arise against
       any person by implication from or as a result of the
       violation of any provision of this act or any rule or
       order hereunder. Nothing in this act shall limit any

                                13



       liability which may exist by virtue of any other statute
       or under common law if this act were not in effect.

70 Pa. Cons. Stat. S 1-506. Section 508 does not explicitly
provide for civil liability; rather, it simply creates a defense
to any suit brought on a contract that violates the PSA.
Thus, the plaintiffs could only have brought their action
under S 501, which is expressly subject to the one
year/four year statute of limitations of S 504. Therefore,
plaintiffs' action for declaratory relief brought two years
after they learned of the violation and over nine years after
the allegedly fraudulent transaction, is barred by the
statute of limitations applicable to the corollary legal claim.
Judge Huyett, therefore, did not err in dismissing Count II
as time-barred.3

C.

The district court dismissed Count III as time-barred.
Count III sought a declaratory judgment that, pursuant to
Pennsylvania common law, the investor notes are void and
unenforceable as they were obtained by fraud in violation of
Pennsylvania tort law. The statute of limitations in
Pennsylvania is two years for "[a]ny other action or
proceeding to recover damages for injury to person or
property which is founded on negligent, intentional, or
otherwise tortious conduct or any other action sounding in
trespass, including deceit or fraud." 42 Pa. Cons. Stat.
S 5524(7). The plaintiffs concede that they knew of the
fraud by October 11, 1993; the complaint was notfiled
until November, 1995. An independent action clearly would
be barred by the two-year statute of limitations governing
fraud actions. Accordingly, the action for declaratory relief
here is governed by the applicable statute of limitations on
the concurrent legal remedy. We, therefore, see no error by
the district court's dismissal of Count III as time-barred.
_________________________________________________________________

3. An action brought in equity is governed by the doctrine of laches. See
Russell v. Todd, 

, 287 (1940). Therefore, had the plaintiffs
sought equitable relief, or if the corollary action to their declaratory
judgment suit is viewed as an action in equity, the claim would still be
time-barred by the doctrine of laches.

                                14



III.

The district court also dismissed Count IV of plaintiffs'
claim which sought relief under the UTP/CPL, 73 P.S.
S S 201-1 to 201-9.2. Specifically, the plaintiffs sought relief
under S 201-9.2, which provides a private right of action
for:

       [A]ny person who purchases or leases goods or services
       primarily for personal, family or household purposes
       and thereby suffers any ascertainable loss . . . as a
       result of the use or employment by any person of a
       method, act or practice declared unlawful by section 3
       of this act.

The trial court stated that "[i]n order to bring a private
action under Section 201-9.2, plaintiffs must show that
they purchased or leased goods or services. Because
plaintiffs' purchase of the Evergreen units does not involve
the provision of a service, plaintiffs may bring an action
under Section 201-9.2 if the units are "goods" within the
meaning of the act." Algrant v. Evergreen Valley Nurseries
Ltd. Partnership, 

, 499 (E.D. Pa. 1996).
The court then held that investment securities were neither
goods nor services under its construction of Pennsylvania
law. The court was also persuaded that the PSA covered
conduct and practices relating to securities transactions to
the exclusion of the Pennsylvania consumer protection
laws, and that plaintiffs had failed to state a cause of action
for which relief could be granted. Accordingly, the district
court then dismissed Count IV.

The district court examined the UTP/CPL in light the
Federal Trade Commission Act ("FCTA"), 15 U.S.C. S S 41-
47, as well as cases involving other state's unfair trade
practices statutes with identical language. Pennsylvania
courts have looked to the FCTA for guidance in construing
the UTP/CPL. See Commonwealth v. Monumental Properties,
Inc., 

, 818-20 (Pa. 1974). The FCTA has not
been applied to securities transactions. As the district court
observed, courts construing state law in light of the FTCA
have found, that despite its broad language and remedial
scope, the FTCA and similar state consumer protections
laws do not extend to investment securities. See Spinner

                                15



Corp. v. Princeville Development Corp., 

, 393
(9th Cir. 1988); Stephenson v. Paine Webber Jackson &
Curtis, Inc., 

, 1101 (5th Cir. 1988); Lindner v.
Durham Hosiery Mills, Inc., 

, 167 (4th Cir.
1985). In each of the foregoing cases, the courts noted that
the state legislatures had enacted extensive laws regulating
the sale of the securities. Giving plaintiffs a remedy under
both consumer protection laws and securities laws would
be "inconsistent with a coherent legislative intent." Spinner

. Pennsylvania also extensively
regulates securities transactions pursuant to the
Pennsylvania Securities Act of 1972, 70 P.S. S S 1-101 to
1-704 (1994 and Supp. 1997), and provides remedies under
that Act. We also believe that allowing plaintiffs to obtain
remedies under both the UTP/CPL and the Securities Act is
not consistent with coherent legislative intent.

We turn to the question of whether an investment
security is a "good" under the UTP/CPL. Although Denison
acknowledged that reference to the FTCA for aid in
interpreting the UTP/CPL is for guidance only and is not

, the exclusion of securities
from the definition of goods under the FTCA is consistent
with Pennsylvania's rules of statutory construction. Thus
we predict, as did the district court, that the Pennsylvania
Supreme Court would hold that investment securities are
not goods under the UTP/CPL and therefore the UTP/CPL
does not provide a cause of action for a party alleging fraud
in the securities themselves. Accordingly, we conclude that
the district court did not err in dismissing Count IV of the
plaintiff 's complaint for failure to state a cause of action
upon which relief could be granted.

We find no Pennsylvania case law addressing this issue.
The plaintiffs argue that those federal courts that have
confronted this issue have split on whether the UTP/CPL
covers the sales of investment securities, while the majority
holding that the UTP/CPL does cover these transactions.4
_________________________________________________________________

4. See Lebovic v. Nigro, Civ. No. 96-319, 

, at *2 (E.D. Pa.
Apr. 15, 1996); S. Kane & Son Profit Sharing Trust v. Marine Midland
Bank, Civ. No. 95-7058, 

, at *3 (E.D. Pa. Apr. 25, 1996);
Advest Inc. v. Kirschner, Civ. No. 92-6656, 

, at *2 (E.D.
Pa. Jan. 21, 1994); Denison v. Kelly, 

, 202-05 (M.D. Pa.
1991); McCullough v. Shearson Lehman Bros. Inc., 

, *4
(W.D. Pa. Feb. 18, 1988).

                                16



Only one trial court, in addition to the district court in this
case, has held that it does not. See Klein v. Opp, 944 F.
Supp. 396, 398 (E.D. Pa. 1996).

A closer analysis of the cases relied upon by the plaintiffs
show that they are distinguishable; most of the cases
involved situations in which the alleged violation of the
UTP/CPL was committed by a brokerage house customarily
selling the securities of third parties. In this case, the
plaintiffs have alleged that the fraud was in the valuation
fixed by the issuer of the investment securities themselves
and misrepresentations the issuer made concerning these
securities. Plaintiffs have not alleged any fraudulent
conduct in the actual sale of the securities.

, the only case providing an
analysis and reasoning for its conclusion that the UTP/CPL
sale covers the investment securities, addressed a factually
different scenario. There, the fraud alleged was in the
actual sale of the securities from a brokerage house to the
plaintiffs. In Denison, the plaintiffs alleged that the
defendants "had churned their account and had purchased
investments inappropriate to the plaintiffs' stated desire for
long term growth and 

.
Therefore, the alleged fraudulent conduct was in the
"services" provided by the brokerage house, which is
covered by the UTP/CPL. The plaintiffs did not allege any
fraud related to the securities themselves.

The other cases holding that the UTP/CPL covers the
purchase of securities also deal specifically with the
transaction, and not with the securities themselves. See S.
Kane & Son, 

, at *3 (claim that seller of
investment used money in regular operations rather than in
escrow account as promised and subsequently went
bankrupt); Advest Inc., 

, at *2 (actionable
conduct was broker's fraudulent assurance that shares
could be sold at profit); McCullough, 

, at *4
(claims allege that broker misled purchaser by providing
inaccurate information and advice regarding securities).5
_________________________________________________________________

5. Two of the cases cited by the plaintiffs for the proposition that the
UTP/CPL covers securities transactions assumed this for purposes of

                                17



These cases all involve the provision of services and thus
are squarely within the protections of the UTP/CPL.

The only case which cannot be so readily distinguished is
Lebovic v. Nigro, 

, *2 (E.D. Pa. Apr. 15,
1996). In Lebovic, the plaintiff orally agreed to form a new
corporation with the defendant and bought "shares" in this
new corporation. The defendant allegedly never performed
his part of the oral bargain and converted the money
plaintiff paid for these shares in the new corporation to his
own personal use. 

at *1. The court,
without analysis, held that the UTP/CPL applied to the
purchase of securities, simply citing S. Kane & Sons,
Denison, & McCullough. 

The court then dismissed
the claim, however, holding that the plaintiff, who had
purchased the stock as part of an ownership agreement,
was not a consumer within the contemplation of the
UTP/CPL. 

Thus, this case offers little support for
the proposition that the UTP/CPL covers investment
securities as "goods" under S 9.2. In fact, it could
contemplate a ruling that the plaintiffs, purchasers of
interests in a limited partnership, are not "consumers"
protected under the UTP/CPL.

The difficulty arises because the term "goods" is not
expressly defined in the UTP/CPL. Pennsylvania law,
however, has established rules of statutory construction to
be employed when defining a term not defined in the
statute itself. There are a number of approved ways of
construing terms that are not otherwise defined in the
statute. Generally, "[w]ords and phrases shall be construed
according to their common and approved usage." 1 Pa.
Cons. Stat. S 1903(a). According to the dictionary, the term
"goods" generally does not include securities. See Webster's
Seventh New Collegiate Dictionary 360 (1969). Additionally,
words can be construed by reference to other statutes. 1
_________________________________________________________________
reaching other issues and did not directly reach that matter. See Klein
v. Boyd, 

, 285 (E.D. Pa. 1996) (assuming UTP/CPL
covers sale of securities to decide privity issue); Rosen v. Fidelity
Fixed
Income Trust, 

(E.D. Pa. 1995) (assuming UTP/CPL covers
sale of securities to determine class certification issue). Thus, these
cases are not persuasive on the critical issue before us.

                                18



Pa. Cons. Stat. SS 1921(c), 1932. The district court did just
that, comparing the term "goods" under the UTP/CPL with
the term "goods" under the Uniform Commercial Code.

As the district court noted, the Pennsylvania legislature
used the same language in section 201-9.2 of the UTP/CPL
as it did in defining "consumer goods" in Pennsylvania's
Uniform Commercial Code. Compare 13 Pa. Cons. Stat.
S 9109 ("Goods are: (1) `Consumer goods' if they are used or
bought for use primarily for personal, family or household
purposes.") with 73 Pa. Cons. Stat. S 201-9.2 (providing
right of action for person buying or leasing "goods or
services primarily for personal, family or household
purposes"). Under the UCC provision dealing with sales,
"goods" is defined as "all things (including specially
manufactured goods) which are movable at the time of
identification to the contract for sale other than . . .
investment securities." 13 Pa.Cons. Stat. S 2105(a). In fact,
the Pennsylvania UCC contains a separate provision dealing
solely with investment securities. See 13 Pa. Cons. Stat.
S 8101 et seq. Thus, by comparing this statute to the UCC,
the district court determined that the definition of goods
under the UTP/CPL does not include investment securities.

IV.

Accordingly, the district court committed no error in its
order dismissing the plaintiffs' complaint. The dismissal of
the action, however, is without prejudice to the plaintiffs'
right to invoke the claims they have raised in this
proceeding as defenses to any suit brought by the Trust to
collect upon the notes referred to in this action.

Each side to bear its own costs.

                                19



MANSMANN, J., dissenting.

I believe that a party may bring a defensive declaratory
judgment action to assert his non-liability for future
obligations under a written instrument so long as the
jurisdictional requirements of the Declaratory Judgment
Act are satisfied, even when the party's unpursued cause of
action for damages based on the same instrument is time-
barred. I also believe that purchasers of investment
securities may seek the protection of the Pennsylvania
Unfair Trade Practices and Consumer Protection Law so
long as the securities are purchased primarily for personal
purposes. I respectfully dissent.

I.

The primary purpose of the Declaratory Judgment Act is
"to avoid accrual of avoidable damages to one not certain of
his rights and to afford him an early adjudication without
waiting until his adversary should see fit to begin suit, after
damage had accrued." Travelers Ins. Co. v. Davis, 

, 543 (3d Cir. 1974) (quoting E. Edelmann & Co. v.
Triple-A Specialty Co., 

, 854 (7th Cir. 1937));
accord Cunningham Bros., Inc. v. Bail, 

,
1167-68 (7th Cir. 1969); Luckenbach Steamship Co. v.
United States, 

, 548 (2d Cir. 1963). The Act
allows "prospective defendants to sue to establish their
nonliability." Beacon Theatres, Inc. v. Westover, 

, 504 (1959).

Bearing in mind the remedial character and legislative
purpose of the Declaratory Judgment Act, we have
repeatedly emphasized that the Act should have a liberal
interpretation. Exxon Corp. v. Federal Trade Comm'n, 

, 900 (3d Cir. 1978); Simmons Aerocessories v.
Elastic Stop Nut Corp. of Am., 

, 489 (3d Cir.
1958); Aralac, Inc. v. Hat Corp. of Am., 

, 291
(3d Cir. 1948). Indeed, federal courts' jurisdiction over
declaratory judgment actions are limited by just two
primary considerations: the action must present a case or

                                20



controversy and it must be ripe for disposition. Travelers
Ins. Co. v. Obusek, 

, 1153-54 (3d Cir. 1995).1

The district court and the majority do not contend that
Algrant failed to satisfy the "case or controversy" or
"ripeness" requirements under the Act. Rather, the majority
agrees with the district court that Algrant's first three
causes of action are barred by the statute of limitations.

Actions for declaratory relief do not have their own
statute of limitations. See 

("Limitations statutes do not apply to declaratory judgments
as such. . . . There are no statutes which provide that
declaratory relief will be barred after a certain period of
time."). Rather, since "[d]eclaratory relief is a mere
procedural device by which various types of substantive
claims may be vindicated," it is the substance of the right
sued on, and not the remedy invoked, that governs the
applicable limitations period. 

& n.2. As the
district court observed, "the declaratory judgment action
must be brought within the limitations period applicable to
the substantive claim underlying the request for declaratory
relief." Algrant v. Evergreen Valley Nurseries Ltd.
Partnership, 

, 497 (E.D. Pa. 1996).

The substantive claim Algrant seeks to vindicate in
pursuing Counts I through III is the claim that Algrant is
not liable for future obligations under the Investor Notes.
Algrant invokes section 29 of the Securities and Exchange
_________________________________________________________________

1. To satisfy the "case or controversy" requirement, a declaratory
judgment action must present a legal controversy (1) that is real and not
hypothetical, (2) that affects an individual in a concrete manner so as to
provide the factual predicate for reasoned adjudication, and (3) that
sharpens the issues for judicial resolution. 

(citing Armstrong World Indus., Inc. v. Adams, 

, 410 (3d Cir.
1992)).

To satisfy the "ripeness" requirement, a plaintiff in a declaratory
judgment action must demonstrate (1) that the probability of future
harm is real and substantial, of sufficient immediacy and reality to
warrant the issuance of a declaratory judgment, (2) that the legal status
of the parties will be changed by the declaration, and (3) that the
declaratory judgment will have utility (i.e., that it will be of some
practical help to the parties). 

                                21



Act of 1934, section 508 of the Pennsylvania Securities Act,
and common law fraudulent inducement for the sole
purpose of establishing his non-liability under the Notes.
Algrant does not seek damages pursuant to these laws;
rather, Algrant relies on these laws to establish a defense to
the defendants' anticipated claims to enforce the Notes.

Since the substantive claim underlying the declaratory
judgment action is Algrant's defense to the defendants'
potential claim under the Notes, the declaratory judgment
action is not time-barred until the defendants' claim is
time-barred. As the Court of Appeals for the Second Circuit
held in Luckenbach:

       Non-liability is the negative of the claim or cause of
       action with respect to which the declaration is sought.
       For purposes of the statute of limitations non-liability
       is inextricably linked with that cause of action. So long
       as the claim can be made, its negative can be asserted.
       When the claim itself has been barred, a declaration of
       non-liability is also barred . . . .

; see also United States v.
Western Pac. R.R. Co., 

, 72 (1956) (statutes of
limitations do not apply to defenses).

The majority perceives Counts I through III quite
differently. The majority focuses on the limitations periods
governing offensive actions for damages brought under the
laws which Algrant cites to establish a defense. The
majority reasons that, since an independent cause of action
for damages under these laws would have been barred, so
too must a defensive declaratory judgment action which
invokes these laws be barred. I believe that the majority
misconstrues the nature of Algrant's claim. The substantive
claim underlying Algrant's request for declaratory relief is
not the claim for damages Algrant elected not to pursue;
Algrant does not seek a coercive judgment. Rather, the
substantive claim is the defendants' potential action against
Algrant to enforce the Notes. Counts I through III do not
exist for the purpose of establishing that the defendants
committed fraud; rather, they exist to establish that Algrant
is not liable under the Notes. Cf. 

(declaratory judgment action may proceed when

                                22



plaintiff seeks "only a declaration of non-liability" and not
a time-barred "coercive judgment").

The majority concludes that Algrant may not assert the
defenses articulated in Counts I through III until the
defendants seek enforcement of the Notes. Under the
majority's reasoning, Algrant's claims are both stale and
unripe; they were brought both too late and too soon. Given
that the jurisdictional requirements of the Declaratory
Judgment Act are satisfied now, it makes little sense to
force Algrant to wait (while potential liability looms) until
the defendants seek judicial enforcement of the Notes
before asserting the very defenses which he properly asserts
in this action. As a prospective defendant seeking to obtain
an early adjudication of an actual controversy so as to
avoid the accrual of avoidable damages, Algrant is exactly
the type of person the Declaratory Judgment Act was
intended to assist.

The majority improperly links the timeliness of defensive
declaratory judgment actions with the timeliness of other
remedies that might have been available had Algrant
chosen to pursue them. The Declaratory Judgment Act
provides that courts "may declare the rights and other legal
relations of any interested party seeking such declaration,
whether or not further relief is or could be sought." 28 U.S.C.
S 2201(a) (emphasis supplied). Indeed, when coercive relief
is deemed unavailable, the court may, "if it serves a useful
purpose, grant instead a declaration of rights." Fed. R. Civ.
P. 57 advisory committee's note. Thus, the availability of a
declaratory judgment remedy is not dependent on the
existence or timeliness of an alternative, coercive remedy.

Written instruments "may be construed before or after
breach at the petition of a properly interested party." 

majority's reasoning, however, written
instruments may only be construed (1) after breach, in
litigation of an action on that breach or (2) sufficiently
before breach so as to coincide with a timely cause of
action for damages based on conduct which may also
render the written instrument unenforceable. During these
periods, the declaratory judgment plaintiff ordinarily has
other options (e.g., asserting a defense, bringing a claim for
damages), and the declaratory judgment action often

                                23



becomes redundant. The majority prevents an individual
from seeking a declaratory judgment when it would be most
useful -- during an actual controversy, when the party
threatened with liability desires an early adjudication to
avoid the unnecessary accrual of damages without waiting
until his adversary should see fit to begin an action after
the damage has accrued. See Saum v. Widnall, 912 F.
Supp. 1384, 1394 (D. Colo. 1996).

In Silverman v. Eastrich Multiple Investor Fund, L.P., 

(3d Cir. 1995), the plaintiff brought an action
seeking a declaration that the requirement that she
guarantee a loan for the benefit of her spouse was in
violation of the Equal Credit Opportunity Act. We held that
even if the plaintiff's "right to initiate an action for damages
based upon such alleged violations is barred by the statute
of limitations, no such bar exists to asserting such violation
as a defense to efforts to collect on said guaranty." 

(emphasis supplied). We permitted the plaintiff's
declaratory judgment action to go forward because it was
defensive in nature. The majority reads Silverman narrowly,
concluding that the plaintiff 's declaratory judgment action
was only permitted because the action was brought in
response to the defendant's state court confession of
judgment.
I interpret Silverman more broadly, to permit a party to
bring a defensive declaratory judgment action (i.e., to
thwart "efforts" to enforce a written instrument), even when
the action raises issues that would be time-barred if
brought offensively (i.e., to obtain damages). 

The
Declaratory Judgment Act permits parties to bring an
action to establish a defense even before a controversy has
reached the stage at which the declaratory judgment
defendant may sue for coercive relief. By forcing Algrant to
wait until the defendants bring suit on the Notes, the
majority has undermined the primary purpose of the Act.

The cases from our sister courts of appeals cited by the
majority are distinguishable. In Levald, Inc. v. City of Palm
Desert, 

(9th Cir. 1993), for example, the
plaintiff's challenge to an ordinance was time-barred
because the plaintiff suffered a single harm, measurable
and compensable when the ordinance was passed years

                                24



before. 

The declaratory judgment action was no
different in substance from the time-barred action for
damages for the past injury. See also International Ass'n of
Machinists & Aerospace Workers v. Tennessee Valley Auth.,

, 667-68 (6th Cir. 1997) (plaintiff 's claim for
declaratory relief was tied to time-barred substantive claims
for damages arising from prior breach of collective
bargaining agreement; court was not faced with actual
controversy about anticipated future breach); Clulow v.
Oklahoma, 

, 1293-95, 1302-03 (10th Cir.
1983) (declaratory judgment plaintiff could not vindicate
past alleged wrongs in claims that were inextricably linked
to time-barred causes of action for damages). In contrast,
Algrant does not seek to vindicate prior wrongs in an action
indistinguishable from a time-barred offensive action for
damages. Algrant merely seeks a declaration about a future
obligation.

In Gilbert v. City of Cambridge, 

(1st Cir.
1991), also cited by the majority, the plaintiffs' "as-applied"
challenge to an ordinance was barred by the statute of
limitations because the injury was inflicted at the time the
ordinance was applied; the substance of the claim was no
different from the time-barred claim for damages. 

58. Importantly, the court also noted that the declaratory
judgment action was not yet "mature as to any potential
enforcement action." 

(emphasis supplied). The fact
that "potential" enforcement actions remained mere
"theoretical possibilities" rendered the plaintiffs' declaratory
judgment action unripe. 

Algrant's
declaratory judgment action is ripe; there is a present
controversy about the defendants' expected enforcement of
a future obligation.2
_________________________________________________________________

2. The majority also cites Town of Orangetown v. Gorsuch, 

(2d Cir. 1983), but that case was decided under New York law. 

42. Under Pennsylvania law, a party may pursue a declaratory judgment
action to ascertain future obligations of the parties to a contract even
though a damages claim for breach of contract is time-barred. Wagner v.
Apollo Gas Co., 

, 365-66 (Pa. Super. Ct. 1990). In
Pennsylvania, a four-year "catch all" statute of limitations applies to
certain declaratory judgment actions, see 42 Pa. Cons. Stat. Ann.
S 5525(8), but the statute does not begin to run until there exists an
" `actual controversy' indicating immediate and inevitable litigation, and
a direct, substantial and present interest." 

.

                                25



II.

The Pennsylvania Unfair Trade Practices and Consumer
Protection Law ("UTP/CPL"), Pa. Stat. Ann. tit. 73, S 201-1
et seq., provides that any person who purchases "goods or
services primarily for personal, family or household
purposes and thereby suffers any ascertainable loss of
money or property" may bring a private action for damages.

The legislative intent in enacting the
UTP/CPL was "to enhance the protection of the public from
unfair or deceptive business practices. . . . The central
underlying intent was fraud prevention, and the act must
be construed liberally to effectuate that remedial intent."
Valley Forge Towers S. Condominium v. Ron-Ike Foam
Insulators, Inc., 

, 644 (Pa. Super. Ct. 1990),
aff 'd, 

(Pa. 1992); accord Commonwealth v.
Monumental Properties, Inc., 

, 815-17 (Pa.
1974) (Consumer Protection Law is to be construed liberally
to effect object of preventing unfair or deceptive practices).

When determining the scope of the UTP/CPL, I note that
the Act is not concerned with the type of product
purchased; instead, it is concerned with the purpose of the
purchase. "The purpose of the purchase, and not the type
of product purchased, controls." Valley 

(emphasis in original). So long as the product
(whatever its type) is purchased "primarily for personal,
family or household purposes," the purchase is protected
by the Act. Thus, in deciding whether the Evergreen units
purchased by Algrant come within the protection of the
UTP/CPL, we should focus on the purpose of the purchase.

There is no indication that Algrant purchased the
Evergreen units as a limited partner for a business
purpose. Rather, the securities were purchased as personal
investments. Due to the passive nature of the typical
limited partnership arrangement, an individual who invests
in a limited partnership is not characterized as engaging in
business activity. See Freedman v. Tax Review Bd. of City
of Phila., 

, 133-35 (Pa. Super. Ct. 1968), aff'd,

(Pa. 1969). Algrant was a passive limited
partner who did not participate in the business in any way.
Since Algrant purchased the Evergreen units for a personal

                                26



purpose, he was not engaged in a business activity and the
purchase is protected by the UTP/CPL.

The majority focuses on the term "goods" and notes that
investment securities are excluded from the definition of
"goods" under the Pennsylvania Uniform Commercial Code
("UCC") provision dealing with sales. 13 Pa. Cons. Stat.
Ann. S 2105(a). In so doing, the majority reads an exception
into the UTP/CPL that is not present. Indeed, while the
UCC may limit its scope by expressly excluding investment
securities from its definition of "goods," Ifind it telling that
the UTP/CPL does not contain such an exclusion. Cf.
Monumental 

(cautioning courts
not to "woodenly apply" definition in UCC, which furthers
commercial objectives, to the Consumer Protection Law,
which furthers consumer objectives; to do so might"defeat
the [Consumer] Law's remedial objects").

In Monumental Properties, the court emphasized its
intention to interpret the Consumer Protection Law broadly:

       There is no indication of an intent to exclude a class or
       classes of transactions from the ambit of the Consumer
       Protection Law. When the Legislature deemed it
       necessary to make an exception from the Law's scope,
       it did so in clear 

n.5. The UTP/CPL contains no "clear
language" excluding the purchase of personal investment
securities from the protection of the law. The legislature
could easily include such language, as it did for
broadcasters, printers and publishers. Pa. Stat. Ann. tit.
73, S 201-3. Until the legislature chooses to create a
"securities exception" to the UTP/CPL, the courts should
not recognize one.

For the foregoing reasons, I respectfully dissent.

A True Copy:
Teste:

         Clerk of the United States Court of Appeals
         for the Third Circuit

                                 27