6/11/2018 SCOTUS Limits Reach of American Pipe Tolling

The U.S. Supreme Court on June 11, 2018 resolved a circuit split over whether American Pipe tolling applied to plaintiffs who filed successive class actions. In a detailed opinion by Justice Ginsburg, the majority in China Agritech, Inc. v. Resh, Case No. 17-432, 584 U.S. ___ (2018), held that the tolling provisions established in American Pipe and Construction Co. v. Utah, 414 U.S. 538 (1974), do not extend to individual class members wanting to file a new proposed class action on behalf of others after the statutory limitations deadline has passed. The Supreme Court rejected arguments that its holding would force plaintiffs to file protective class actions within the applicable limitations period in order to preserve their rights, rather than rely on similar, pending class actions of which they would be a member if certified. The Court noted that its announced rule had been previously adopted by the Second and Fifth Circuits (which the Court noted were no strangers to class actions) and that there had not been a noticeable increase in protective class actions filed in those jurisdictions. Justice Sotomayor wrote a concurrence agreeing with the result, but arguing that the announced rule should be limited to federal securities class actions because of the unique federal rules that apply to them. Click here to see the opinion.