Munger, Tolles & Olson attorney John M. Gildersleeve published an article for Bloomberg’s Securities Regulation & Law Report on July 24, 2017 about a U.S. Supreme Court ruling that is expected to enhance the peace enjoyed by defendants in securities class actions after the Securities Act’s three-year statute of repose.
In his article, Mr. Gildersleeve describes the interaction of two rules at play in California Public Employees’ Retirement System vs. ANZ Securities, Inc.: the three-year statute of repose governing private actions under the Securities Act of 1933, and the longstanding rule, known as American Pipe tolling, that the commencement of a class action suspends the applicable statute of limitations as to all absent class members. That tolling rule was often invoked by plaintiffs who opted out of securities class actions to assert otherwise time-barred claims after the Securities Act’s repose period. The Supreme Court’s decision in ANZ Securities clarifies that American Pipe tolling does not apply to the Securities Act’s statute of repose.
The result of the ruling, Mr. Gildersleeve writes, is that opt-out lawsuits, like the one filed by the plaintiff in ANZ Securities, must be ruled untimely if filed after the three-year repose period. He also argues that the ruling’s logic may have additional implications, including for fraud-based claims under Section 10(b) of the Securities Exchange Act.
Based in Los Angeles, Mr. Gildersleeve focuses his practice on securities and complex commercial litigation in U.S. state and federal court.