The Supreme Court Holds that American Pipe Tolling Does Not Apply to Subsequent Class Actions; Clarifies that Five-Year Period for Section 10(b) Claims Is a Statute of Repose
On June 11, 2018, the United States Supreme Court handed down its decision in China Agritech v. Resh, holding that the American Pipe equitable tolling rule—which tolls the statute of limitations for individual claims while a class action is pending—does not apply to subsequently filed class action claims. The Court also clarified that the five-year limit on bringing claims under the Exchange Act is a statute of repose. Accordingly, under the Court’s prior decision in CalPERS v. ANZ Securities, Inc., the Exchange Act’s five-year statute of repose is not tolled by the filing of a class action lawsuit.
The China Agritech decision follows a trend set by other recent Supreme Court decisions limiting the application of equitable doctrines to expand or contract a legislatively enacted statute of limitations.