In this appeal, we must decide whether the district court properly applied Fed.R.Civ.P. 12(b) in dismissing plaintiff's complaint as time barred. Because the district court improperly relied on materials not within the pleadings in reaching its decision, we reverse the dismissal.

For purposes of this appeal, we provide only a summary of the procedural history of this case.1 Plaintiff-appellant Cooperativa de Ahorro y Credito Aguada ("the Coop") is a single-branch savings and loan cooperative located in Aguada, Puerto Rico. On December 28, 1989, more than three years after purchasing shares in Drexel Burnham Lambert Unit Trust Bond Funds (hereinafter "Unit Trusts"), the Coop brought Section 10(b)2 and Rule 10b-53 claims against its financial services brokers, defendants-appellees Kidder, Peabody & Co. ("Kidder") and Ramon Almonte.4 The complaint alleged that Almonte, while employed at Kidder, had fraudulently induced the Coop to purchase shares in the Unit Trusts by misrepresenting to the Coop the nature and risk of these investments. As to timeliness, the complaint alleged that, because Almonte had continued to misrepresent the nature and value of the Unit Trusts from the date of purchase through July of 1989, the applicable Puerto Rico two-year statute of limitations had tolled.5

While the Coop's claims were pending before the district court, the United States Supreme Court announced a uniform federal statute of limitations for all Section 10(b) and Rule 10b-5 claims in Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, --- U.S. ----, 111 S. Ct. 2773, 115 L. Ed. 2d 321 (1991). Lampf held that such claims must be brought within one year of discovery of the facts which give rise to the violation, and no more than three years after the violation itself. Id. at ---- - ----, 111 S. Ct. at 2781-82. The one-and-three year limitation announced in Lampf is not subject to tolling. Id. at ----, 111 S.Ct. at 2782. Because the Coop's claims had been filed more than three years after the purchase of the Unit Trusts, the district court, relying on Lampf, dismissed the claims (hereinafter "the first dismissal"). Cooperativa II, 777 F. Supp. at 155-56.

Less than two months after the first dismissal, the Coop's claims were reinstated by Section 476 of the Federal Deposit Insurance Corporation Improvement Act of 1991, Pub.L. No. 102-242, 105 Stat. 2236, 2387 (codified as § 27A of the Securities Exchange Act of 1934, 15 U.S.C. § 78aa-1) (hereinafter "Section 27A").6 Section 27A reinstates claims which, like the Coop's, were (1) pending at the time Lampf was decided, and (2) dismissed as time barred under Lampf. Pursuant to Section 27A, the Coop filed a timely motion for reinstatement.

With the Coop's claims before it a second time, the district court set out to apply the pre-Lampf statute of limitations, which, as noted above, was subject to tolling. Having no discovery before it on the issues of timeliness and tolling, the district court applied Fed.R.Civ.P. 12(b)7 to the Coop's motion for reinstatement.

The district court began its application of Rule 12(b) with a brief analysis of the junk bond market. Relying extensively on articles in the national press, submitted by neither party, the district court found that "it was public common knowledge within institutional investment circles that ... the high yield bonds sold by Drexel were accompanied by an equally high risk," Cooperativa III, 799 F. Supp. at 264, and that "any reasonabl[y] sophisticated institutional investor should have recognized that it was investing in junk bonds."8 Id. at 266. The district court concluded that the Coop "was under an obligation to conduct a reasonably diligent inquiry from the date of purchase of [the Unit Trusts] and so the statute of limitations began to run on that date." Id.

As an alternative date for commencing the running of the statute of limitations, the district court found that the stock market crash of October 19, 1987, was sufficient to put the Coop on notice of its possible securities claims against defendants. Id. at 265-66. Again, the court relied on national press reports submitted by neither party to support its view that such notice was within the realm of common knowledge.9

Applying either date, the district court found that the Coop's December 28, 1989, complaint failed to state a timely claim under Puerto Rico's two-year statute of limitations. Accordingly, it dismissed the Coop's claims a second time (hereinafter "the second dismissal"). Id.

The Coop now appeals the second dismissal, arguing that the district court's reliance on materials outside of the pleadings was improper and thus not a valid basis for dismissing its claim. For the reasons that follow, we agree.

Under Rule 12(b), "any consideration of documents not attached to the complaint, or not expressly incorporated therein, is forbidden, unless the proceeding is properly converted into one for summary judgment under [Fed.R.Civ.P.] 56." Watterson v. Page, 987 F.2d 1, 3 (1st Cir.1993). See also Fed.R.Civ.P. 12(b) (if "matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56"). Moreover, upon conversion to summary judgment, "all parties shall be given a reasonable opportunity to present all material made pertinent" by the conversion. Fed.R.Civ.P. 12(b). See also Whiting v. Maiolini, 921 F.2d 5, 6 (1st Cir.1990).

Here, the district court relied extensively on materials outside the pleadings in reaching its conclusion as to when the statute of limitations began to run on the Coop's claims. In relying on these extraneous materials, the district court gave the parties neither notice nor opportunity to be heard, nor did it convert the proceeding to one for summary judgment. Such use of outside materials is beyond the scope of Rule 12(b).

Nor do we find that the district court's reliance on such material was within the scope of "judicial notice" under Fed.R.Evid. 201(b).10 Ordinarily, when a district court takes judicial notice of a fact other than at the request of a party, it should notify the parties that it is doing so and afford them an opportunity to be heard. United States v. Garcia, 672 F.2d 1349, 1356 n. 9 (11th Cir.1982). See also Barr Rubber Prods. Co. v. Sun Rubber Co., 425 F.2d 1114, 1125-26 (2d Cir.) (stating that failure to notify parties "exceeded the bounds of judicial notice, and thereby denied [party] an effective opportunity to object [to], examine and rebut the matters noticed") (footnote omitted), cert. denied, 400 U.S. 878, 91 S. Ct. 118, 27 L. Ed. 2d 115 (1970); 21 Charles A. Wright & Kenneth W. Graham, Federal Practice and Procedure § 5107 (1977) ("[T]he judge must notify the parties that [s/]he is taking judicial notice of an adjudicative fact.") (footnote omitted). As noted above, the district court gave the parties no such opportunity to be heard. Accordingly, we find that the district court's use of scattered press reports to take judicial notice of an adjudicative fact was beyond the proper scope of judicial notice.

Finally, defendants offer an alternative ground for affirming the district court's dismissal of the Coop's claims, claiming that Section 27A is constitutionally infirm. For the reasons persuasively stated in Anixter v. Home-Stake Prod. Co., 977 F.2d 1533, 1543-47 (10th Cir.1992), cert. denied, --- U.S. ----, 113 S. Ct. 1842, 123 L. Ed. 2d 467 (1993), we reject defendants' constitutional challenges to Section 27A.11 See also Henderson v. Scientific-Atlanta, Inc., 971 F.2d 1567, 1571-75 (11th Cir.1992); Berning v. United States, 990 F.2d 272, 277-79 (7th Cir.1993).

For the foregoing reasons, the order of the district court denying the Coop's motion for reinstatement under Section 27A is reversed.

Reversed and remanded.