NOT PRECEDENTIAL

               UNITED STATES COURT OF APPEALS
                    FOR THE THIRD CIRCUIT
                        ______________

             Nos. 16-1364, 16-1365, 16-1366, 16-1367
                            ______________

       NORTH SOUND CAPITAL LLC; NORTH SOUND LEGACY
     INTERNATIONAL; NORTH SOUND LEGACY INSTITUTIONAL;
  UNITED FOOD COMMERCIAL WORKERS LOCAL 1500 PENSION FUND

                                  v.

  MERCK & CO INC; MERCK SCHERING PLOUGH PHARMACEUTICALS;
   MSP DISTRIBUTION SERVICES (C) LLC; MSP SINGAPORE CO LLC;
              RICHARD T. CLARK; DEEPAK KHANNA,

                                                   Appellants in No. 16-1364
                           ______________

                       GIC PRIVATE LIMITED

                                  v.

  MERCK & CO INC; MERCK SCHERING PLOUGH PHARMACEUTICALS;
MSP DISTRIBUTION SERVICES (C), LLC; MSP SINGAPORE COMPANY, LLC;
              RICHARD T. CLARK; DEEPAK KHANNA,

                                                   Appellants in No.16-1365
                           ______________

                       GIC PRIVATE LIMITED

                                  v.

       MERCK & Co., f/k/a SCHERING-PLOUGH CORPORATION;
          MERCK SCHERING PLOUGH PHARMACEUTICALS;
              MSP DISTRIBUTION SERVICES (C) LLC;
    MSP SINGAPORE COMPANY, LLC; FRED HASSAN; CARRIE COX,

                                                   Appellants in No. 16-1366
 NORTH SOUND CAPITAL, LLC; NORTH SOUND LEGACY INTERNATIONAL;
  NORTH SOUND LEGACY INSTITUTIONAL; UNITED FOOD COMMERCIAL
     WORKERS LOCAL 1500 PENSION FUND; COLONIAL FIRST STATE
          INVESTMENT, LTD.; CFSIL-CFS WHOLESALE INDEXED
        GLOBAL SHARE FUND; COMMONWEALTH BANK OFFICERS
     SUPERANNUATION CORPORATION AS TRUSTEE FUND OFFICERS
       SUPERANNUATION FUND WGSSO4; CFSIL-COMMONWEALTH
       GLOBAL SHARES FUND 4; COMMONWEALTH BANK OFFICERS
      SUPERANNUATION COPORATION AS TRUSTEE FUND OFFICERS
      SUPPERANNUATION FUND WGSSO2; COMMONWEALTH BANK
OFFICERS SUPERANNUATION CORPORATION AS TRUSTEE FUND OFFICERS
 SUPERANNUATION FUND WTRA02; CFSIL-COMMONWEALTH SPECIALIST
 FUND 13; CFSIL WHOLESALE GEARED GLOBAL SHARED FUND; CFSIL ATF
 CMLA INTERNATIONAL SHARE FUND; CFSIL-COMMONWEALTH GLOBAL
SHARES FUND 6; CFSIL- COMMONWEALTH GLOBAL SHARES FUND 2; CFSIL-
CFS WHOLESALE ACADIAN GLOBAL EQUITY FUND; CFSIL-CFS WHOLESALE
   GLOBAL HEALTH & BIOTECHNOLOGY FUND; CFSIL-CFS WHOLESALE
                        GLOBAL SHARE FUND

                                        v.

     MERCK & CO, INC., f/k/a SCHERLING -PLOUGH CORPORATION;
  MERCK SCHERING PLOUGH PHARMACEUTICALS; MSP DISTRIBUTION
  SERVICES (C) LLC; MSP SINGAPORE COMPANY, LLC; FRED HASSAN;
                            CARRIE S. COX,

                                                         Appellants in No. 16-1367
                                ______________

                   On Appeal from the United States District Court
                             for the District of New Jersey
  (D.C. Civ Nos. 3-13-cv-07240, 3-13-cv-07241, 3-14-cv-00241, and 3-14-cv-00242)
                     District Judge: Honorable Freda L. Wolfson
                                    ______________

                             Argued October 5, 2016

         BEFORE: SHWARTZ, GREENBERG, and ROTH, Circuit Judges

                              (Filed: August 2, 2017)
                                 ______________

                                        2
Daniel Hume (argued)
Ira M. Press
Meghan J. Summers
Karina Kosharskyy
Kirby McInerney
825 Third Ave.
16th Floor
New York, NY 10022

   Attorneys for Appellees

Daniel J. Kramer (argued)
Theodore V. Wells, Jr.
Charles E. Davidow
Daniel J. Leffell
Daniel J. Juceam
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064

William H. Trousdale
Brian M. English
Tomkins, McGuire, Wachenfeld & Barry
3 Becker Farm Road, Fourth Floor
Roseland, NJ 07065-1726

   Attorneys for Appellants

Scott L. Nelson
Allison M. Zieve
Public Citizen Litigation Group
1600 20th Street, N.W.
Washington, DC 20009

Max W. Berger
Salvatore J. Graziano
Bernstein Litowitz Berger & Grossman
1251 Avenue of the Americas, 44th Floor
New York, NY 10020

Blair Nicholas
Bernstein Litowitz Berger & Grossman

                                           3
12481 High Bluff Drive, Suite 300
San Diego, CA 92130

Ira D. Hammerman
Kevin M. Carroll
Securities Industry and Financial
Markets Association
1399 New York Avenue, N.W.
Washington, DC 20005

Jared M. Gerber
Lewis J. Liman
Clearly Gottlieb Stein & Hamilton
One Liberty Plaza
New York, NY 10006

Daniel P. Chiploch
Lieff Cabraser Heimann & Bernstein
250 Hudson Street, 8th Floor
New York, NY 10013

Darren Robbins
Joseph D. Daley
Robbins Geller Rudman & Dowd
655 West Broadway
Suite 1900
San Diego, CA 92501

Tejinder Singh
Thomas C. Goldstein
Goldstein & Russell
7475 Wisconsin Avenue
Suite 850
Bethesda, MD 20814

    Attorneys for amici curiae
                                     ______________

                                        OPINION 1
                                     ______________

1
 This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
                                              4
GREENBERG, Circuit Judge.
                                   I. INTRODUCTION

       In American Pipe & Construction Co. v. Utah, 

, 

(1974)

(“American Pipe”), the Supreme Court established a class action tolling rule providing

for tolling of the time for bringing lawsuits by unnamed members of a class in a putative

class action during the time that a district court was deciding whether to certify the

plaintiff class. In the cases now before us on Merck and Co.’s (“Merck”) and Merck and

Co. as successor to Schering Plough Pharmaceuticals’s (“Schering”) (together

“appellants”) consolidated appeals, we determine whether, in this action that GIC Private

Limited and North Sound Capital LLC (“appellees”) and other plaintiffs brought under

the Securities Exchange Act of 1934 (“Exchange Act”) against appellants, the American

Pipe rule can be applied to toll the time for bringing actions otherwise beyond the time

allowed by statutes of repose. It is undisputed that, in the absence of tolling, appellees’

actions would be untimely as appellees initiated their cases beyond that time. It is now

clear that in the light of California Public Employees Retirement System v. ANZ

Securities, Inc., No. 16-373, S.Ct. ____ (June 26, 2017), that the American Pipe tolling

rule cannot be invoked to toll the running of time under the statutes of repose at issue in

these cases and that appellees’ Exchange Act claims therefore were untimely.

Accordingly, we will reverse an order that the District Court entered on August 26, 2015,

denying appellants’ motions to dismiss appellees’ Exchange Act cases and will remand




                                              5
the cases to the District Court to dismiss appellees’ cases insofar as they assert Exchange

Act claims.

                II.    JURISDICTION AND STANDARD OF REVIEW

       The District Court had jurisdiction under Section 27 of the Exchange Act, 15

U.S.C. § 78aa, and 28 U.S.C. §§ 1331, 1337, and 1367. Merck and Merck as successor

to Schering filed a timely motion in the District Court seeking certification for appeal of

the statute of repose questions that the District Court addressed in entering the August 26,

2015 order. On January 7, 2016, that Court granted the motion and certified its August

26, 2015 order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). After the

District Court granted their motion, appellants filed a timely petition in this Court for

leave to appeal, which we granted on February 11, 2016. 2 Consequently, we have

jurisdiction pursuant to 28 U.S.C. § 1292(b). See, e.g., Weitzner v. Sanofi Pasteur, Inc.,

, 62 n.1 (3d Cir. 2016). We exercise plenary review of the District Court’s

denial of appellants’ motions to dismiss. See Keystone Redevelopment Partners, LLC v.

Decker, 

, 95 (3d Cir. 2011).

                                 III.   BACKGROUND 3
A.     The ENHANCE Trial


2
 There are additional appellants but it is adequate for us to refer only to Merck and
Merck as successor to Schering as the appellants. Of course, our opinion reversing
applies to all appellants.
3
  The District Court primarily relied on the allegations in North Sound Capital’s
complaint filed on November 14, 2013. We, too, will rely on North Sound’s allegations
in this opinion. In any event, the individual complaints filed in the actions now on appeal
are “extremely similar.” (JA 6 n.2).

                                              6
       In 2002, Merck and Schering entered into a joint venture for the purpose of

combining their cholesterol treating drugs, respectively Zocor and Zetia, to create a new

pharmaceutical product called “Vytorin.” 4 In furtherance of this venture, Merck and

Schering designed a clinical trial known as ENHANCE to demonstrate the benefits of

Vytorin. In particular, Merck and Schering expected that the ENHANCE trial would

establish that Vytorin simultaneously could lower LDL cholesterol levels and reduce the

intima-media thickness of the carotid arterial wall. (JA 85, ¶ 41).

       The ENHANCE trial ran from August 2002 to August 2006 but was unsuccessful.

According to appellees, notwithstanding the hurdles attributable to ENHANCE’s

experimental design, appellants allegedly misrepresented Vytorin’s prospects for clinical

efficacy. Appellees claim that appellants made 17 misrepresentations concerning

Vytorin, the last by Schering on November 19, 2007, and by Merck on January 30, 2008.

They also allege that an individual defendant made sales of Schering stock based on

insider knowledge of the results of ENHANCE, the last insider transaction having been

on May 1, 2007.

       The final results of the ENHANCE trial became public between January and

March 2008 and the ENHANCE data indicated that Vytorin did not produce any added

benefit when compared to Zocor alone. Indeed, according to appellees, researchers

characterized Vytorin’s active ingredient as an “expensive placebo.” (JA 132, ¶ 142).


4
  Merck and Schering completed a merger in November 2009 in which Schering became
a part of Merck. (JA 73, ¶ 21). Thus, Merck and Merck as successor to Schering Plough
are appellants on this appeal.

                                             7
Appellees assert that in the period immediately following the release of these results,

Schering’s “common stock price fell more than 52%, wiping out more than $23.63 billion

in market capitalization, and the . . . preferred stock price similarly fell more than 40% . .

. wiping out $1.039 billion in market capitalization.” (JA 216, ¶ 320) (emphasis in the

original).

B.     The Class Actions

       After the results of ENHANCE became public in 2008, representative plaintiffs

filed two putative class actions related to the test’s failure, one against Merck and one

against Schering. See In re Schering-Plough Corp./ENHANCE Sec. Litig., No. 2:08-cv-

00397 (DMC) (JAD), 

(D.N.J. Sept. 25, 2012) (“Schering Class

Action”); In re Merck & Co., Vytorin/Zetia Sec. Litig., No. 2:08-cv-02177 (DMC)

(JAD), 

(D.N.J. Sept. 25, 2012) (“Merck Class Action”). The District

Court certified classes in both cases on September 25, 2012. See Schering Class Action,

, at *1; Merck Class Action, 

, at *1. On December

28, 2012, the Court approved notices to be given to members of the proposed classes,

and, in both cases permitted class members to opt-out of the classes until March 1, 2013.

Ultimately the parties settled the class actions.

C.     Appellees Opt-Out of the Class
       Appellees North Sound Capital LLC and GIC Private Limited, both institutional

investors, who were within the classes in the underlying actions, timely opted-out of the

classes on March 1, 2013. Then appellees initiated four district court actions against




                                              8
appellants on November 14, 2013, and January 14, 2014. 5 In their essentially identical

complaints, appellees alleged that appellants violated §§ 10(b), 20(a), and 20A of the

Exchange Act, and engaged in common law fraud actionable under New Jersey law.

Specifically, appellees allege that they, or their investment managers, relied on

appellants’ misrepresentations when they purchased Schering securities during the

ENHANCE trial and that “[a]s a direct and proximate result of [appellants’] wrongful

conduct, [appellees] suffered damages in connection with their respective purchases and

sales of [Schering’s] securities during the [r]elevant [p]eriod.” (JA 225, ¶ 346).

Appellees also allege that an individual defendant, other than Merck and Merck as

successor to Schering, engaged in a series of insider sales of Schering stock. (JA 410-11,

¶¶ 351-52). As we already have stated, the last alleged insider trade was executed on

May 1, 2007, and the final alleged misstatement was made on January 30, 2008, more

than five years before appellees initiated their individual actions. (JA 410-11, ¶¶ 351-52;

JA 744-45, ¶¶ 317-18).

D.     Appellants’ Motions to Dismiss and Petitions for Interlocutory Review

       On November 17, 2014, appellants moved under Fed. R. Civ. P. 12(b)(6) to

dismiss all four of appellees’ post-opt-out-cases. 6 In support of their motions, appellants


5
 Two of the actions were against Merck in its own capacity and two were against Merck
as successor to Schering. Appellants characterize the complaints in these actions as copy
cats of the class actions.
6
  The District Court initially stayed the four actions after the Supreme Court granted
certiorari in Police & Fire Retirement System of the City of Detroit v. IndyMac MBS,
Inc., 

(2d Cir. 2013), a case dealing with the issue of the applicability of
American Pipe’s class action tolling rule to statutes of repose. See Pub. Emps.’ Ret. Sys.
                                             9
asserted that the five-year period for bringing actions that the statutes of repose set forth

in 28 U.S.C. § 1658(b)(2) for claims under §§ 10(b) and 20(a), and 15 U.S.C. § 78t-

1(b)(4) for claims under § 20A, barred appellees’ Exchange Act actions because

appellees brought their actions after the expiration of the five-year period. Appellants

argued that American Pipe did not save appellees’ cases because American Pipe applied

to “equitable” tolling of statutes of limitation and was not a precedent for extending the

time for initiating actions barred by statutes of repose. Appellants also argued that even

if American Pipe tolling applied a form of “legal,” as distinguished from “equitable”

tolling, the Rules Enabling Act (“REA”), 28 U.S.C. § 2072(b), precluded the application

of Fed. R. Civ. P. 23 on which the District Court relied in denying appellants’ motions to

dismiss to extend the time for commencing actions under the Exchange Act statutes of

repose. 7 (JA 9).

       Appellees, in opposing dismissal of their actions in the District Court, asserted that

the Exchange Act time limitations are statutes of limitations rather than statutes of repose

of Miss. v. IndyMac MBS, Inc., 

(2014). The Supreme Court ultimately
dismissed its grant of certiorari as improvident, and proceedings in the cases now before
us resumed in the District Court. See Pub. Emps.’ Ret. Sys. of Miss. v. IndyMac MBS,
Inc., 

(2014).
7
  In their motions to dismiss, appellants also argued that the District Court should decline
to exercise supplemental jurisdiction over appellees’ common law fraud claims, or, in the
alternative, that appellees insufficiently pled the fraud claims. Inasmuch as the District
Court held that appellees’ Exchange Act claims survived the motions to dismiss, the
Court did not rule on the jurisdictional argument and it limited its analysis of the common
law fraud claims to appellants’ inadequate-pleading argument, which it rejected. We do
not review this conclusion because it is not within the scope of the issues we have
certified for appeal. On the remand that will follow the disposition of these appeals, the
District Court may consider the question of whether it should exercise jurisdiction over
the common law claims, a matter on which we do not express an opinion.
                                              10
and thus the limitations periods in the statutes could be equitably tolled. Appellees

further contended that, even if the Exchange Act time limitations are statutes of repose,

there could be tolling under American Pipe in these cases because the tolling in American

Pipe had a “legal” foundation rooted in an interpretation of Fed. R. Civ. P. 23.

Accordingly, appellees contended that there was a statutory basis for the tolling. Finally,

appellees argued that the REA did not preclude extending American Pipe tolling to

statutes of repose.

       On August 26, 2015, the District Court denied appellants’ motions to dismiss. The

Court first concluded that the time limitations in 28 U.S.C. § 1658(b)(2) and 15 U.S.C. §

78t-1(b)(4) are statutes of repose and that, in the absence of tolling, the time for bringing

appellees’ Exchange Act actions expired before appellees opted-out of the class actions

and subsequently initiated their individual actions. The Court, however, determined that

it could apply American Pipe tolling to the Exchange Act repose periods as it accepted

appellees’ contention that American Pipe tolling has a “legal” foundation. It reached this

conclusion on the bases of its interpretation of Rule 23 and its conclusion that American

Pipe was applicable to statutes of repose. The Court then addressed the impact of the

REA and reasoned that American Pipe tolling is purely procedural and therefore

American Pipe could be applicable as tolling under that case had only an incidental

impact on the parties’ substantive rights. Accordingly, the Court applied American Pipe

tolling to appellees’ individual actions brought after they opted-out of the class actions

following the class actions’ certification. The Court therefore held that appellees’



                                             11
Exchange Act claims were timely and it denied appellants’ Rule 12(b)(6) motions to

dismiss. 8

       As we set forth above, appellants filed a motion in the District Court seeking an

order certifying the statute of repose questions to this Court for appeal pursuant to 28

U.S.C. § 1292(b). The District Court granted appellants’ motion on January 7, 2016, and

certified the following two questions for interlocutory review:

              1.     Whether the tolling rule set forth in American Pipe &
                     Constr. Co. v. Utah, 

(1974) is ‘legal’ or
                     ‘equitable’ in nature;

              2.     Whether interpreting American Pipe & Constr. Co.
                     v. Utah, 

(1974) tolling to extend the five-
                     year statutes of repose under the Securities Exchange
                     Act of 1934 would abridge [appellant]s’ substantive
                     rights, enlarge [appellee]s’ substantive rights, or
                     otherwise modify any substantive right within the
                     meaning of the Rules Enabling Act, 28 U.S.C. §
                     2072(b)[.]

(JA 34). After the District Court entered the above order, appellants petitioned this Court

for leave to file an interlocutory appeal and we granted their petition pursuant to 28

U.S.C. § 1292(b) on February 11, 2016. In our order we accepted the District Court’s

framing of the questions for the appeal.


                                   IV.     DISCUSSION

       When this case was before the District Court the outcome was not obvious. But

that was before the Supreme Court decided ANZ Securities. After the Court decided that

8
 Appellants do not contend that even if tolling applied, appellees’ actions would be
untimely.

                                             12
case we directed the parties to inform us by letter with respect to their positions

concerning the impact of that case on this case. Appellees have stated that ANZ made

clear that American Pipe recognized a form of “equitable tolling that does not apply to

the federal securities laws’ statutes of repose. Because this is the precise question at issue

in [these consolidated appeals], we believe that the Supreme Court’s decision is

dispositive of the issues raised in Defendants’ appeals.” Letter of Daniel Hume of Kirby

McInerney LLP dated July 6, 2017. Not surprisingly, appellants have filed a letter taking

the same position.


                                   V.     CONCLUSION

       For the foregoing reasons, we will reverse the District Court’s order of August 26,

2015, denying appellants’ motions to dismiss appellees’ Exchange Act claims, and will

remand the cases to that Court for it to dismiss the Exchange Act claims as time-barred,

and for further proceedings on the remaining issues.




                                             13