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.

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