U.S. Supreme Court Holds American Pipe Does Not Permit Repeat Filing of Class Claims After Limitations Period

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The United States Supreme Court’s June 11, 2018 decision in China Agritech, Inc. v. Resh, clarified the scope of a decades-old equitable tolling rule for class actions, holding that the Court’s 1974 opinion in American Pipe & Construction Company v. Utah does not permit the filing of successive class claims after the expiration of the applicable statute of limitations. Following China Agritech, after the limitations period has run, unnamed class members may seek to intervene in a case in which class certification has been denied or may separately file their own individual suits, but they may not seek to reboot the claims on behalf of the class. The China Agritech decision is a significant development that will have important implications in class action litigation of all types.

BACKGROUND -

In American Pipe, the Supreme Court held that the timely filing of a class action tolls the statute of limitations for members of the putative class. Thus, putative class members may timely seek to intervene in a pending case in which class certification has been denied, even after the applicable statute of limitations has expired. In 1983, the Court further clarified the scope of this tolling rule in Crown, Cork & Seal Co. v. Parker, holding that, under American Pipe, thestatute of limitations is also tolled as to putative class members who “prefer to bring an individual suit rather than intervene.” Last year, in California Public Employees’ Retirement System v. ANZ Securities, Inc., the Court again examined the scope of American Pipe tolling, holding that such tolling does not apply to a statute of repose—specifically, the three-year repose period specified by Section 13 of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. §77m.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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