On June 1, 2017, the First Department issued a decision in MBI International Holdings Inc. v. Barclays Bank PLC, 2017 NY Slip Op. 04381, affirming the dismissal of a fraud claim as time-barred because the plaintiffs were on inquiry notice of their claim more than two years before they brought suit, explaining:
An action in New York based upon fraud must be commenced within the greater of six years from the date of the fraud or within two years from the time plaintiffs discovered, or with reasonable diligence, could have discovered the fraud. Here, the parties do not dispute that the alleged fraud occurred in or around July 2006, the date of the 2006 Settlement, more than six years prior to the commencement of plaintiffs’ action. Therefore, the question we face is whether plaintiffs commenced their action within two years from the time they discovered, or could have discovered the alleged fraud with reasonable diligence. Under this inquiry, when the plaintiffs have knowledge of facts from which the fraud could be reasonably inferred, they will be held to have discovered the fraud.
Plaintiffs allege that they first discovered the facts underlying their fraud-based claims after the Financial Times articles were published in May 2013; they argue they could not have reasonably discovered these facts until then. However, as persuasively argued by defendant, plaintiffs’ own complaint establishes that they were on inquiry notice by at least 2008.
. . .
Plaintiffs’ own allegations, which we must accept as true on a motion to dismiss, establish that plaintiffs were apprised of facts from which fraud could have been reasonably inferred by at least 2008. Accordingly, by at least 2008, New York law imposed on plaintiffs a duty to inquire, and plaintiffs’ subsequent failure to pursue a reasonable investigation triggered the running of the statute of limitations at that time.
(Internal quotations and citations omitted) (emphasis added).