June 11, 2018
China Agritech Inc. v. Resh, No. 17-432
Decided June 11, 2018
Today, the Supreme Court held that the filing of a class action does not toll the statute of limitations for putative class members to file their own class actions. That means that if class certification is denied, putative class members cannot file successive class actions after the statute of limitations has expired.
Stockholders filed two timely class actions against China Agritech, Inc. alleging that the company violated the Securities Exchange Act of 1934. After class certification was denied in both actions, stockholders filed a third class action, well outside the two-year limitations period. They argued that their claims were timely because the limitations period was tolled while the earlier class actions were pending.
Whether previously absent class members may bring a class action outside the applicable limitations period on the theory that the pendency of a previous class action (in which the court ultimately denied class certification) tolled the statute of limitations during the pendency of earlier class actions.
No. Previously absent class members may not bring successive (also called “stacked”) class actions outside the limitations period.
“The ‘efficiency and economy of litigation’ that support tolling individual claims, . . . do not support maintenance of untimely successive class actions; any additional class filings should be made early on, soon after the commencement of the first action seeking class certification.”
Justice Ginsburg, writing for the Court
Gibson Dunn filed amicus briefs arguing against tolling for successive class actions for the Chamber of Commerce, Retail Litigation Center, and the American Tort Reform Association
What It Means:
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court. Please feel free to contact the following practice leaders:
Appellate and Constitutional Law Practice
|Caitlin J. Halligan
|Mark A. Perry
|Nicole A. Saharsky
Related Practice: Class Actions
|Theodore J. Boutrous, Jr.
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