Held, the limitations period in §1658(b)(1) begins to run once the plaintiff actually discovered or a reasonably diligent plaintiff would have "discover[ed] the facts constituting the violation"--whichever comes first. In the statute of limitations context, "discovery" is often used as a term of art in connection with the "discovery rule," a doctrine that delays accrual of a cause of action until the plaintiff has "discovered" it.
In determining the time at which "discovery" occurs, terms such as "inquiry notice" and "storm warnings" may be useful insofar as they identify a time when the facts would have prompted a reasonably diligent plaintiff to begin investigating. But the limitations period does not begin to run until the plaintiff thereafter discovers or a reasonably diligent plaintiff would have discovered "the facts constituting the violation," including scienter--irrespective of whether the actual plaintiff undertook a reasonably diligent investigation. Thus none of the circumstances alleged reveal "facts" indicating the relevant scienter. Therefore holding of Third Circuit Court affirmed.
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