Statute of Limitations – Class Action

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United States Supreme Court

Case Name: China Agritech, Inc. v. Resh, et al.

Case No.: 17-432

Focus: Statute of Limitations – Class Action

This case concerns the tolling rule first stated in American Pipe & Constr. Co. v. Utah, 414 U. S. 538 (1974). The Court held in American Pipe that the timely filing of a class action tolls the applicable statute of limitations for all persons encompassed by the class complaint. Where class-action status has been denied, the Court further ruled, members of the failed class could timely intervene as individual plaintiffs in the still-pending action, shorn of its class character. See id., at 544, 552–553. Later, in Crown, Cork & Seal Co. v. Parker, 462 U. S. 345 (1983), the Court clarified American Pipe’s tolling rule: The rule is not dependent on intervening in or joining an existing suit; it applies as well to putative class members who, after denial of class certification, “prefer to bring an individual suit rather than intervene . . . once the economies of a class action [are] no longer available.” 462 U. S., at 350, 353–354; see California Public Employees’ Retirement System v. ANZ Securities, Inc., 582 U. S. ___, ___ (2017) (slip op., at 13) (American Pipe “permitt[ed] a class action to splinter into individual suits”); Smith v. Bayer Corp., 564 U. S. 299, 313–314, n. 10 (2011) (under American Pipe tolling rule, “a putative member of an uncertified class may wait until after the court rules on the certification motion to file an individual claim or move to intervene in the [existing] suit”).

The question presented in the case now before us: Upon denial of class certification, may a putative class member, in lieu of promptly joining an existing suit or promptly filing an individual action, commence a class action anew beyond the time allowed by the applicable statute of limitations? Our answer is no. American Pipe tolls the statute of limitations during the pendency of a putative class action, allowing unnamed class members to join the action individually or file individual claims if the class fails. But American Pipe does not permit the maintenance of a follow-on class action past expiration of the statute of limitations

Reversed and Remanded

Dissenting:

Concurring: SOTOMAYOR, J., filed an opinion concurring in the judgment.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.