(CN) – The 9th Circuit revived a class action accusing Halifax Building Society of deceiving investors about the bank’s conversion to a publicly traded company. A three-judge panel extended the lower court’s four-year statute of limitations by two years, saying the claims were not time-barred.
In 1997, the United Kingdom-based bank sent a voting packet and a “transfer document” to 9 million members, informing them that HBS would be converting to a publicly traded company called Halifax. The transfer document stated that “qualified members” would receive free shares in the new company.
To qualify, a member had to live in the United Kingdom or a “permitted territory.” The United States was not considered a “permitted territory.”
Most members, including lead plaintiff Hatfield, voted for the conversion, only to discover that they weren’t entitled to the free shares.
In 2003, Hatfield and three former members filed a class action in New Jersey, naming Halifax and HBOS PLC, which bought the company in 2001, as defendants. That action was dismissed, and the plaintiffs brought the same class action in California two years later.
The California district court dismissed the action as barred by the state’s four-year statute of limitations.
But the federal appeals court in San Francisco agreed with the plaintiffs that the case was governed by English law, which has a six-year statute of limitations from the conversion date. The plaintiffs had filed the New Jersey action within deadline, the court concluded.