                United States Court of Appeals
                    For the First Circuit
                                         

No. 92-2148

           COOPERATIVA DE AHORRO Y CREDITO AGUADA,

                    Plaintiff, Appellant,

                              v.

                KIDDER, PEABODY &amp; CO., ET AL.,

                    Defendants, Appellees.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

               FOR THE DISTRICT OF PUERTO RICO

        [Hon. Jose Antonio Fuste, U.S. District Judge]
                                                     

                                         

                            Before

                    Selya, Cyr, and Stahl,
                       Circuit Judges.
                                     

                                         

Enrique Peral,  with whom  Edgardo L. Rivera, Roberto  Boneta, and
                                                             
Munoz  Boneta Gonzalez  Arbona  Benitez &amp;  Peral,  were on  brief  for
                                            
appellant.
Nestor M.  Mendez-Gomez, with  whom Patricia  Rivera-MacMurray and
                                                              
Pietrantoni  Mendez  &amp; Alvarez,  were  on brief  for  appellee Kidder,
                          
Peabody  &amp; Co., Gladys Isabel  Flores for appellee  Ramon Almonte, and
                                 
Guillermo J. Bobonia and Carlos A. Bobonis on brief for appellee Paine
                                      
Webber Incorporated.

                                         

                         May 19, 1993
                                         

          STAHL,  Circuit Judge.    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. 

                              I.
                                

           FACTUAL BACKGROUND AND PRIOR PROCEEDINGS
                                                   

          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

                    

1.  For more  detailed accounts of the  case, see Cooperativa
                                                             
de Ahorro y  Credito Aguada v. Kidder, Peabody &amp;  Co., 758 F.
                                                     
Supp.  64   (D.P.R.  1990)  (hereinafter   "Cooperativa  I");
                                                          
Cooperativa de Ahorro  y Credito Aguada v.  Kidder, Peabody &amp;
                                                             
Co., 777 F. Supp. 153 (D.P.R. 1990) (hereinafter "Cooperativa
                                                             
II");  Cooperativa  de Ahorro  y  Credito  Aguada v.  Kidder,
                                                             
Peabody  &amp; Co., 799  F. Supp. 261  (D.P.R. 1990) (hereinafter
              
"Cooperativa III").
                

2.  Section 10(b) of the Securities Exchange Act  of 1934, 15
U.S.C.   78j(b), states in relevant part:

     It shall  be unlawful  for any person,  directly or
     indirectly,   by   the   use   of   any  means   or
     instrumentality  of interstate  commerce or  of the
     mails,  or   of  any  facility   of  any   national
     securities exchange .  . . [t]o  use or employ,  in

                             -2-
                              2

financial  services   brokers,  defendants-appellees  Kidder,

Peabody &amp; Co.  ("Kidder") and Ramon Almonte.4   The complaint

                    

     connection  with  the  purchase   or  sale  of  any
     security  registered  on   a  national   securities
     exchange  or any  security not  so registered,  any
     manipulative or deceptive  device or contrivance in
     contravention of such rules and  regulations as the
     Commission   may   prescribe   as    necessary   or
     appropriate  in  the  public  interest  or for  the
     protection of investors.  

3.  Rule 10b-5, 17 C.F.R.   240.10b-5 states:

     It shall  be unlawful  for any person,  directly or
     indirectly,   by  the   use   of   any   means   or
     instrumentality  of interstate commerce,  or of the
     mails or of any facility of any national securities
     exchange,

          (a)  To employ  any  device,  scheme,  or
          artifice to defraud,

          (b) To  make  any untrue  statement of  a
          material  fact  or  to omit  to  state  a
          material fact necessary in order  to make
          the statements made, in  the light of the
          circumstances under which they  are made,
          not misleading, or

          (c)  To engage in  any act,  practice, or
          course  of  business  which  operates  or
          would operate  as a fraud  or deceit upon
          any person,

     in  connection with  the  purchase or  sale of  any
     security.

4.  The complaint also  named Almonte's subsequent  employer,
Paine  Webber, Inc.,  ("Paine Webber"),  as a  defendant, and
alleged other securities, RICO, and mail fraud claims against
Almonte, Kidder  and Paine Webber.   These additional federal
claims  were dismissed  by  the district  court  and are  not
before us on this appeal.  See Cooperativa I, 758 F. Supp. at
                                            
64; Cooperativa II, 777 F. Supp. at 157-61.  
                  
     In  addition, the  complaint  included  state law  fraud
claims  against  all three  defendants.    These claims  were
dismissed for  want of  pendent jurisdiction  coincident with

                             -3-
                              3

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  &amp;
                                                             

Petigrow v. Gilbertson, 111  S. Ct. 2773 (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

                    

the  dismissal  of  the   federal  securities  claims.    See
                                                             
Cooperativa II, 777 F. Supp.  at 161.  While our  decision in
              
the instant appeal will result in the  reinstatement of those
claims as well,  we reinstate them  without prejudice to  the
district court's  further consideration of whether  or not it
should   hear  and   determine  them  under   pendent  and/or
supplemental jurisdiction.

5.  The  parties do  not dispute  that at  the time  the Coop
filed  suit, the  applicable statute  of limitations  was the
two-year provision "borrowed" from the Puerto Rico Securities
Act, 10  L.P.R.A.    890(e).   This  two-year limitation  was
subject to equitable tolling under the doctrine of fraudulent
concealment, which provides that "the  statute of limitations
applicable  to  claims under  Section  10(b)  and Rule  10b-5
begins to run when an investor, in the exercise of reasonable
diligence, discovered  or should have discovered  the alleged
fraud."   General  Builders Supply  Co.  v. River  Hill  Coal
                                                             
Venture, 796 F.2d 8, 11 (1st Cir. 1986).
       

                             -4-
                              4

than three years after the violation  itself. Id. at 2781-82.
                                                 

The one-and-three  year limitation announced in  Lampf is not
                                                      

subject to tolling.  Id. 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. 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

                    

6.  Section 27A provides:

     (a)  Effect on pending causes of action

          The  limitation period  for any  private civil
     action  implied  under  [section  10(b)]  that  was
     commenced on or before June 19, 1991,  shall be the
     limitation period provided  by the laws  applicable
     in  the  jurisdiction,   including  principles   of
     retroactivity, as  such laws  existed  on June  19,
     1991.

     (b)  Effect on dismissed causes of action

          Any  private  civil  cause of  action  implied
     under  [section 10(b)]  that  was  commenced on  or
     before June 19, 1991--

          (1)   which  was  dismissed   as  time  barred
     subsequent to June 19, 1991, and 

          (2) which  would have been  timely filed under
     the   limitation  period   provided  by   the  laws

                             -5-
                              5

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

                    

     applicable    in   the    jurisdiction,   including
     principles of  retroactivity, as such  laws existed
     on  June 19, 1991, shall be reinstated on motion by
     the plaintiff not later than 60 days after Dec. 19,
     1991.

7.  Defendants  argue that  the  district court  applied Rule
60(b) to the motion  for reinstatement.  Though the  district
court  did refer to  the motion as  a "Fed. R.  Civ. P. 60(b)
motion for reconsideration," Cooperativa III, 799 F. Supp. at
                                            
262, it went on to apply a Rule 12(b) standard, "[l]ooking at
the facts in a light most  favorable to [the Coop] and taking
them as true, Fed. R. Civ. P. 12(b)(6)."  Id. at 264. 
                                             
     Nothing  in  the  language  of Section  27A  or  in  its
legislative  history  suggests  that  district  courts should
apply Rule  60(b) to  motions  for reinstatement  thereunder.
Rather,   Section   27A  states   that  claims   meeting  its
requirements "shall be reinstated on motion by the plaintiff"
                                 
(emphasis supplied).   The  district court properly  chose to
apply  a  Rule  12(b)  standard  to  the  Coop's  motion  for
reinstatement, and  we reject defendant's  argument that  the
court applied or should have applied Rule 60(b).

                             -6-
                              6

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   

                    

8.  The district court relied upon articles from, inter alia,
                                                            
The  Christian  Science  Monitor,  Barrons,  Forbes, Business
                                                             
Week, Fortune,  and The Los Angeles Times.   Cooperativa III,
                                                            
799 F. Supp. at 264 nn. 5, 6.   

9.  Here,  the district  court  relied on  articles from  The
                                                             
Financial  Times,  Reuters,  The  New  York  Times,  and  The
                                                             
Washington Post.  Cooperativa III, 799 F. Supp. at 265-66 nn.
                                 
10, 12.

                             -7-
                              7

          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.

                             II.
                                

                          DISCUSSION
                                    

          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).  
                        

                             -8-
                              8

          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),

                    

10.  Fed. R. Evid. 201(b) provides:

     A judicially  noted fact must be one not subject to
     reasonable  dispute   in  that  it  is  either  (1)
     generally known within the territorial jurisdiction
     of  the trial court or (2)  capable of accurate and
     ready  determination  by  resort  to  sources whose
     accuracy cannot reasonably be questioned.  

                             -9-
                              9

cert. denied, 400  U.S. 878  (1970); 21 Charles  A. Wright  &amp;
            

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,  No. 92-1099,  1992  WL 391280  (Apr.  19, 1993),  we
      

reject  defendants'  constitutional  challenges   to  Section

27A.11   See also Henderson v.  Scientific-Atlanta, Inc., 971
                                                        

                    

11.  "Given  the   existence  of  a   cogent,  well-reasoned,
eminently correct  opinion closely on point,  we embrace it."
United States v. 29 Cartons, 987 F.2d 33, 37 (1st Cir. 1993).
                           
Beyond Anixter, we add only the following comment in order to
              
address    defendants'    argument    that     Section    27A
unconstitutionally deprived them of  a vested property right.
It is well  established that  a party's property  right in  a
cause  of action does  not vest "until  a final, unreviewable
judgment has  been obtained."  Hammond v.  United States, 786
                                                        
F.2d 8,  12 (1st  Cir. 1986).   See also  Hoffman v.  City of
                                                             
Warwick, 909 F.2d 608, 621 (1st Cir. 1990).  At the time that
       
Section 27A was signed  into law, no final judgment  had been
entered  in  the  instant  case.    Accordingly,  defendants'
argument  that Section 27A deprived them of a vested property
right is without merit.

                             -10-
                              10

F.2d  1567,  1571-75  (11th  Cir. 1992);  Berning  v.  United
                                                             

States, No. 91-3318, 1993 WL 84590, **5-7 (7th Cir. March 25,
      

1993).  

                             III.
                                 

                          CONCLUSION
                                    

          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.
                                                     

                             -11-
                              11
