The Mysteries of Class Action Tolling and the Impacts on Opt-Out Litigation
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The Mysteries of Class Action Tolling and the Impacts on Opt-Out Litigation Wendy Gerwick Couture University of Idaho College of Law
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Transcript of The Mysteries of Class Action Tolling and the Impacts on Opt-Out Litigation
The Mysteries of Class Action Tolling and the Impacts on Opt-Out Litigation
Wendy Gerwick CoutureUniversity of Idaho College of Law
Class cert decision
Class action complaint
filed
Class cert decision
Class action complaint
filed
American Pipe TOLLING
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification. (Denial of certification/intervention.)
Class cert decision
Class action complaint
filed
American Pipe TOLLING
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification. (Denial of certification/intervention.)
Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) DICTA:The plaintiff, after certification of a 23(b)(3) class action asserting violations of the securities and antitrust laws, was required to provide notice to all class members re: the option to opt out, citing American Pipe to reject the plaintiff’s argument that no one would opt out because the statute of limitations had run for the unnamed potential class members. (Grant of certification/opt-out individual claim.)
Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983) HOLDING:The statute of limitations on the plaintiff’s individual Title VII claim was tolled during the pendency of a class action asserting Title VII violations from the time of filing until the denial of class certification.(Denial of certification/individual claim.)
Class cert decision
Class action complaint
filed
American Pipe TOLLING
SCENARIO
1. Federal securities class action, asserting claims under §§ 11, 12 &/or 10(b).
2. Individual suit in federal court, asserting same claims.
Class cert decision
Section 13 of the Securities ActNo action shall be maintained to enforce any liability created under section 77k or 77l(a)(2) of this title
unless brought within one year after the discovery of the untrue statement or the omission, or after
such discovery should have been made by the exercise of reasonable diligence . . . In no event shall
any such action be brought to enforce a liability created under section 77k or 77l(a)(1) of this title
more than three years after the security was bona fide offered to the public, or under section 77l(a)(2)
of this title more than three years after the sale.
28 U.S.C.A. § 1658
(b) Notwithstanding subsection (a), a private right of action that involves a claim of fraud, deceit,
manipulation, or contrivance in contravention of a regulatory requirement concerning the securities
laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)),
may be brought not later than the earlier of--
(1) 2 years after the discovery of the facts constituting the violation; or
(2) 5 years after such violation.
Class action complaint
filed
American Pipe TOLLING
Class cert decision
American Pipe TOLLING
Section 13 of the Securities ActNo action shall be maintained to enforce any liability created under section 77k or 77l(a)(2) of this title
unless brought within one year after the discovery of the untrue statement or the omission, or after
such discovery should have been made by the exercise of reasonable diligence . . . In no event shall
any such action be brought to enforce a liability created under section 77k or 77l(a)(1) of this title
more than three years after the security was bona fide offered to the public, or under section 77l(a)(2)
of this title more than three years after the sale.
28 U.S.C.A. § 1658
(b) Notwithstanding subsection (a), a private right of action that involves a claim of fraud, deceit,
manipulation, or contrivance in contravention of a regulatory requirement concerning the securities
laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)),
may be brought not later than the earlier of--
(1) 2 years after the discovery of the facts constituting the violation; or
(2) 5 years after such violation.
Class action complaint
filed
Class cert decision
Section 13 of the Securities ActNo action shall be maintained to enforce any liability created under section 77k or 77l(a)(2) of this title
unless brought within one year after the discovery of the untrue statement or the omission, or after
such discovery should have been made by the exercise of reasonable diligence . . . In no event shall
any such action be brought to enforce a liability created under section 77k or 77l(a)(1) of this title
more than three years after the security was bona fide offered to the public, or under section
77l(a)(2) of this title more than three years after the sale.
28 U.S.C.A. § 1658
(b) Notwithstanding subsection (a), a private right of action that involves a claim of fraud, deceit,
manipulation, or contrivance in contravention of a regulatory requirement concerning the securities
laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)),
may be brought not later than the earlier of--
(1) 2 years after the discovery of the facts constituting the violation; or
(2) 5 years after such violation.
?
Class action complaint
filed
American Pipe TOLLING
Are the 3-year outer time limit on § 11 & § 12 claims & the 5-year outer time limit on § 10(b) claims tolled?
86 Securities Class Actions Asserting Only § 11 or § 12 Claims, Filed During the Period 2002-2009:
o The 3-year time period would have expired prior to a certification decision in 73% of cases that reached a certification decision.
SOURCE: Brief of Civil Procedure and Securities Law Professors as Amici Curaie in Support of Petitioner, Public Employees’ Retirement System of Miss. v. IndyMac MBS, Inc., No. 13-640, 2014 WL 2361893, at *4-10 (S. Ct., filed May 28, 2014).
86 Securities Class Actions Asserting Only § 11 or § 12 Claims, Filed During the Period 2002-2009:
o The 3-year time period would have expired prior to a certification decision in 73% of cases that reached a certification decision.
Random Sample of 500 Securities Class Actions Asserting § 10(b) Claims, Filed During the Period 2002-2009:
o The 5-year time period would have expired prior to a certification decision in 44% of cases that reached a certification decision.
SOURCE: Brief of Civil Procedure and Securities Law Professors as Amici Curaie in Support of Petitioner, Public Employees’ Retirement System of Miss. v. IndyMac MBS, Inc., No. 13-640, 2014 WL 2361893, at *4-10 (S. Ct., filed May 28, 2014).
Putative class action
filedClass cert decision
American Pipe TOLLING
Are the 3-year outer time limit on § 11 & § 12 claims & the 5-year outer time limit on § 10(b) claims tolled?
Putative class action
filedClass cert decision
SPLIT
Joseph v. Wiles, 223 F.3d 1155 (10th Cir. 2000) – “We conclude that the [3-year] repose period for Mr. Joseph’s section 11 claims was tolled on October 4, 1989, the date the federal Combined Amended Complaint was filed on behalf of both common stock and debenture purchasers, asserting claims under both section 11 and section 10(b).”
American Pipe TOLLING
Are the 3-year outer time limit on § 11 & § 12 claims & the 5-year outer time limit on § 10(b) claims tolled?
Putative class action
filedClass cert decision
SPLIT
Joseph v. Wiles, 223 F.3d 1155 (10th Cir. 2000) – “We conclude that the [3-year] repose period for Mr. Joseph’s section 11 claims was tolled on October 4, 1989, the date the federal Combined Amended Complaint was filed on behalf of both common stock and debenture purchasers, asserting claims under both section 11 and section 10(b).”
Police & Fire Ret. Sys. of the City of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013) – “The tolling rule set forth by the Supreme Court in American Pipe [] does not apply to the three-year statute of repose in Section 13 of the Securities Act of 1933.”
American Pipe TOLLING
Are the 3-year outer time limit on § 11 & § 12 claims & the 5-year outer time limit on § 10(b) claims tolled?
Putative class action
filedClass cert decision
SPLIT
Joseph v. Wiles, 223 F.3d 1155 (10th Cir. 2000) – “We conclude that the [3-year] repose period for Mr. Joseph’s section 11 claims was tolled on October 4, 1989, the date the federal Combined Amended Complaint was filed on behalf of both common stock and debenture purchasers, asserting claims under both section 11 and section 10(b).”
Police & Fire Ret. Sys. of the City of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013) – “The tolling rule set forth by the Supreme Court in American Pipe [] does not apply to the three-year statute of repose in Section 13 of the Securities Act of 1933.”
Petition for Writ of Certioriari granted on March 10, 2014.
American Pipe TOLLING
Are the 3-year outer time limit on § 11 & § 12 claims & the 5-year outer time limit on § 10(b) claims tolled?
Putative class action
filedClass cert decision
SPLIT
Joseph v. Wiles, 223 F.3d 1155 (10th Cir. 2000) – “We conclude that the [3-year] repose period for Mr. Joseph’s section 11 claims was tolled on October 4, 1989, the date the federal Combined Amended Complaint was filed on behalf of both common stock and debenture purchasers, asserting claims under both section 11 and section 10(b).”
Police & Fire Ret. Sys. of the City of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013) – “The tolling rule set forth by the Supreme Court in American Pipe [] does not apply to the three-year statute of repose in Section 13 of the Securities Act of 1933.”
Petition for Writ of Certioriari granted on March 10, 2014.Writ of Certiorari dismissed as improvidently granted on Sept. 29, 2014.
American Pipe TOLLING
Are the 3-year outer time limit on § 11 & § 12 claims & the 5-year outer time limit on § 10(b) claims tolled?
SOURCE: Cornerstone Research, Securities Class Action Filings: 2013 Year in Review, p.25.
2nd Circuit –no tolling of outer limits
10th Circuit –tolling of outer limits
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification.
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification.
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification.
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification.
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification.
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification.
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification.
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification.
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification.
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
Consistent with the antitrust SOL, which was not meant to affect substantive rights.
American Pipe = Rule of Federal Common Law
Stephen B. Burbank, Hold the Corks: A Comment on Paul Carrington's "Substance"' and "Procedure"' in the Rules Enabling Act, 1989 DUKE L.J. 1012, 1027 (1989).
“Rule 23 does not provide a rule for tolling the applicable limitations period, state or federal, in a class action brought in federal court, and American Pipe & Construction Co. v. Utah, does not suggest otherwise. In that case, the Supreme Court was making federal common law. Both the governing substantive law and the applicable limitations period were federal.”
Stephen B. Burbank & Tobias Barrington Wolff, Redeeming the Missed Opportunities of Shady Grove, 159 U. PA. L. REV. 17, 49-50 (2010).
“Rule 23 was not the source of the limitations-tolling rule that the Court announced in American Pipe & Construction Co. v. Utah nor of the rule of preclusion that it announced in Cooper v. Federal Reserve Bank of Richmond. Rather, the application of Rule 23 in those proceedings was the occasion for the Court to implement class action policies in federal common law that it was otherwise authorized to make.”
American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) HOLDING:The Clayton Act’s 4-year statute of limitations was tolled during the pendency of the class action, until certification was denied, allowing the unnamed potential class members to intervene in the action as plaintiffs post-denial of certification.
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
Consistent with the antitrust SOL, which was not meant to affect substantive rights.
Class action tolling applies where (1) it would not allow “one-way intervention;” (2) it would further the Rule 23 purpose of avoiding unnecessary filings; (3) it would not frustrate the goals of the time limit; and (4) it is consonant with the legislative scheme.
CTS Corp. v. Waldburger, 134 S. Ct. 2175 (2014).
STATUTE OF LIMITATIONS
• Time limit generally based on date when claim accrued
POLICY• Requires plaintiff to pursue diligent
prosecution of claims• Promotes justice by preventing
surprises through revival of claims after evidence has been lost, memories faded, and witnesses disappeared
CTS Corp. v. Waldburger, 134 S. Ct. 2175 (2014).
STATUTE OF LIMITATIONS
• Time limit generally based on date when claim accrued
STATUTE OF REPOSE
• Time limit measured from date of last culpable act
POLICY• Requires plaintiff to pursue diligent
prosecution of claims• Promotes justice by preventing
surprises through revival of claims after evidence has been lost, memories faded, and witnesses disappeared
POLICY• Same policies• In addition, effectuates a legislative
judgment that, after a certain period of time, a defendant has freedom from liability
Section 13 of the Securities ActNo action shall be maintained to enforce any liability created under section 77k or 77l(a)(2) of this title unless brought within one year after the discovery of the untrue statement or the omission, or after such discovery should have been made by the exercise of reasonable diligence . . . In no event shall any such action be brought to enforce a liability created under section 77k or 77l(a)(1) of this
title more than three years after the security was bona fide offered to the public, or under section
77l(a)(2) of this title more than three years after the sale.
28 U.S.C.A. § 1658
(b) Notwithstanding subsection (a), a private right of action that involves a claim of fraud, deceit,
manipulation, or contrivance in contravention of a regulatory requirement concerning the securities
laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)),
may be brought not later than the earlier of--
(1) 2 years after the discovery of the facts constituting the violation; or
(2) 5 years after such violation.
STATUTE OF LIMITATIONS
• Time limit generally based on date when claim accrued
STATUTE OF REPOSE
• Time limit measured from date of last culpable act
Section 13 of the Securities ActNo action shall be maintained to enforce any liability created under section 77k or 77l(a)(2) of this title unless brought within one year after the discovery of the untrue statement or the omission, or after such discovery should have been made by the exercise of reasonable diligence . . . In no event shall any such action be brought to enforce a liability created under section 77k or 77l(a)(1) of this
title more than three years after the security was bona fide offered to the public, or under section
77l(a)(2) of this title more than three years after the sale.
28 U.S.C.A. § 1658
(b) Notwithstanding subsection (a), a private right of action that involves a claim of fraud, deceit,
manipulation, or contrivance in contravention of a regulatory requirement concerning the securities
laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)),
may be brought not later than the earlier of--
(1) 2 years after the discovery of the facts constituting the violation; or
(2) 5 years after such violation.
STATUTE OF LIMITATIONS
• Time limit generally based on date when claim accrued
STATUTE OF REPOSE
• Time limit measured from date of last culpable act
POLICY• Same policies• In addition, effectuates a legislative
judgment that, after a certain period of time, a defendant has freedom from liability.
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
Consistent with the antitrust SOL, which was not meant to affect substantive rights.
YES - Nothing to join if certification denied.
Class action tolling applies where (1) it would not allow “one-way intervention;” (2) it would further the Rule 23 purpose of avoiding unnecessary filings; (3) it would not frustrate the goals of the time limit; and (4) it is consonant with the legislative scheme.
Tolling of statute of repose until DENIAL of certification in cases brought under §§ 11, 12, & 10(b)?
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
Consistent with the antitrust SOL, which was not meant to affect substantive rights.
Class action tolling should apply where (1) it would not allow “one-way intervention;” (2) it would further the Rule 23 purpose of avoiding unnecessary filings; (3) it would not frustrate the goals of the time limit; and (4) it is consonant with the legislative scheme.
YES - Nothing to join if certification denied.
YES – Fear of denial of certification would compel duplicative filings.
Tolling of statute of repose until DENIAL of certification in cases brought under §§ 11, 12, & 10(b)?
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
Consistent with the antitrust SOL, which was not meant to affect substantive rights.
Class action tolling should apply where (1) it would not allow “one-way intervention;” (2) it would further the Rule 23 purpose of avoiding unnecessary filings; (3) it would not frustrate the goals of the time limit; and (4) it is consonant with the legislative scheme.
YES - Nothing to join if certification denied.
YES – Fear of denial of certification would compel duplicative filings.
YES – Individual suits after denial of class certification would not interfere with freedom from liability; merely disaggregation of previously asserted claims.
Tolling of statute of repose until DENIAL of certification in cases brought under §§ 11, 12, & 10(b)?
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
Consistent with the antitrust SOL, which was not meant to affect substantive rights.
Class action tolling should apply where (1) it would not allow “one-way intervention;” (2) it would further the Rule 23 purpose of avoiding unnecessary filings; (3) it would not frustrate the goals of the time limit; and (4) it is consonant with the legislative scheme.
YES - Nothing to join if certification denied.
YES – Fear of denial of certification would compel duplicative filings.
YES – Individual suits after denial of class certification would not interfere with freedom from liability; merely disaggregation of previously asserted claims.
YES –Deterrence & compensation policies served by individual suits if classwideresolution not possible.
Tolling of statute of repose until DENIAL of certification in cases brought under §§ 11, 12, & 10(b)?
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
Consistent with the antitrust SOL, which was not meant to affect substantive rights.
Class action tolling should apply where (1) it would not allow “one-way intervention;” (2) it would further the Rule 23 purpose of avoiding unnecessary filings; (3) it would not frustrate the goals of the time limit; and (4) it is consonant with the legislative scheme.
NO – Akin to one-way intervention, if can wait until grant of certification (and, in reality, proposed settlement) to decide whether to join.
Tolling of statute of repose until GRANT of certification in cases brought under §§ 11, 12, & 10(b)?
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
Consistent with the antitrust SOL, which was not meant to affect substantive rights.
Class action tolling should apply where (1) it would not allow “one-way intervention;” (2) it would further the Rule 23 purpose of avoiding unnecessary filings; (3) it would not frustrate the goals of the time limit; and (4) it is consonant with the legislative scheme.
NO – Opt-out litigation asserting same claims is duplicative of class action.
NO – Akin to one-way intervention, if can wait until grant of certification (and, in reality, proposed settlement) to decide whether to join.
Tolling of statute of repose until GRANT of certification in cases brought under §§ 11, 12, & 10(b)?
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
Consistent with the antitrust SOL, which was not meant to affect substantive rights.
Class action tolling should apply where (1) it would not allow “one-way intervention;” (2) it would further the Rule 23 purpose of avoiding unnecessary filings; (3) it would not frustrate the goals of the time limit; and (4) it is consonant with the legislative scheme.
NO – Defendant who thought that actions will either proceed as a class or as disaggregated individual claims now faces both.
NO – Akin to one-way intervention, if can wait until grant of certification (and, in reality, proposed settlement) to decide whether to join.
NO – Opt-out litigation asserting same claims is duplicative of class action.
Tolling of statute of repose until GRANT of certification in cases brought under §§ 11, 12, & 10(b)?
Prior to the 1966 amendments to Rule 23, many courts required individual satisfaction of the SOL because Rule 23 allowed potentially abusive “one-way intervention.”
Now that Rule 23 requires certification to occur “as soon as practicable,” class actions are no longer “invitations to joinder.”
The purpose of Rule 23 class actions is to avoid, rather than encourage, unnecessary filings of repetitious papers and motions.
Not tolling the SOL would frustrate this purpose because it would necessitate the filing of individual motions to intervene.
Statutes of limitations are meant to ensure fairness to defendants and bar a plaintiff who has slept on rights.
The filing of the class action notifies the defendant of the essential information re: the subject matter and size of the prospective litigation, & the named plaintiff (as representative) has not slept on rights.
Tolling in a given context must be consonant with the legislative scheme.
Consistent with the antitrust SOL, which was not meant to affect substantive rights.
Class action tolling should apply where (1) it would not allow “one-way intervention;” (2) it would further the Rule 23 purpose of avoiding unnecessary filings; (3) it would not frustrate the goals of the time limit; and (4) it is consonant with the legislative scheme.
NO – Akin to one-way intervention, if can wait until grant of certification (and, in reality, proposed settlement) to decide whether to join.
NO – Opt-out litigation asserting same claims is duplicative of class action.
NO – Defendant who thought that actions will either proceed as a class or as disaggregated individual claims now faces both.
Tolling of statute of repose until GRANT of certification in cases brought under §§ 11, 12, & 10(b)? PARTIALLY
NO –Defendant’s withholding from class action settlement will undercut compensation of those who remain in class.
Class cert decision
Section 13 of the Securities ActNo action shall be maintained to enforce any liability created under section 77k or 77l(a)(2) of this title
unless brought within one year after the discovery of the untrue statement or the omission, or after
such discovery should have been made by the exercise of reasonable diligence . . . In no event shall
any such action be brought to enforce a liability created under section 77k or 77l(a)(1) of this title
more than three years after the security was bona fide offered to the public, or under section
77l(a)(2) of this title more than three years after the sale.
28 U.S.C.A. § 1658
(b) Notwithstanding subsection (a), a private right of action that involves a claim of fraud, deceit,
manipulation, or contrivance in contravention of a regulatory requirement concerning the securities
laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)),
may be brought not later than the earlier of--
(1) 2 years after the discovery of the facts constituting the violation; or
(2) 5 years after such violation.
My recommendation: Tolled if class certification denied; not tolled if class certified.
Class action complaint
filed
American Pipe TOLLING
Are the 3-year outer time limit on § 11 & § 12 claims & the 5-year outer time limit on § 10(b) claims tolled?
The Mysteries of Class Action Tolling and the Impacts on Opt-Out Litigation
Wendy Gerwick CoutureUniversity of Idaho College of Law
