February 12, 2017

Supreme Court Rules That Securities Act Time Bar Is Not Subject to American Pipe Tolling

Christopher F. Moriarty – October 3, 2017

In 1974, in American Pipe & Construction Co. v. Utah, the U.S. Supreme Court held that “the commencement of the original class suit tolls the running of the statute for all purported members of the class who make timely motions to intervene after the court has found the suit inappropriate for class action status.” 414 U.S. 538, 553 (1974). This ruling has for decades provided protection to absent class members who have been able to wait on developments in a class action before deciding whether or not to opt out and file an individual action. On June 26, 2017, the Supreme Court issued its opinion in California Public Employees’ Retirement System v. ANZ Securities, Inc., 137 S. Ct. 2042 (2017), which resolved a circuit split as to whether the three-year time bar in section 13 of the Securities Act of 1933 is subject to American Pipe tolling.

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