Deveny

I. INTRODUCTION

Plaintiffs and appellants Joseph Deveny et al. appeal from judgment following the trial court’s granting of defendants’ motion for summary judgment on the basis of the affirmative defense of the statute of limitations in plaintiffs’ class action alleging securities violations. Plaintiffs contend the trial court erred in applying the doctrine of inquiry notice and in ignoring plaintiffs’ amended pleadings and related evidence under the “sham pleading” doctrine. Although we agree with the trial court’s conclusion that inquiry notice rather than actual knowledge triggers the running of the applicable statute of limitations, we conclude that triable issues of material fact exist as to whether plaintiffs had constructive notice of the facts underlying their complaint. We therefore reverse.

II. FACTS AND PROCEDURAL BACKGROUND

Plaintiffs are a class of about 1,000 individuals who invested in securities issued by defendant Entropin, Inc. (Entropin). During the class period (Aug. 1998 to Sept. 2002), Entropin was a pharmaceutical company whose sole business was to develop and market Esterom, a topical solution intended to treat impaired range of motion…