On January 13, 2017, the Supreme Court granted certiorari in California Public Employees’ Retirement System v. ANZ Securities, Inc., No. 16-373 (ANZ Securities), to resolve whether the filing of a putative class action tolls the statute of repose for individual class members’ claims brought under Section 13 of the Securities Act.
The California Public Employees’ Retirement System (CalPERS or Petitioner) was a member of a putative class action in the Southern District of New York alleging securities fraud in connection with stock losses prior to the bankruptcy of Lehman Brothers Holdings Inc. Before the district court had ruled on class certification, CalPERS filed an individual action in the Northern District of California, which later consolidated with the class action. See MDL Transferred In, Cal. Pub Emps.’s Ret. Sys. v. Fuld, No. 3:11-cv-01281-LAK (S.D.N.Y. Feb. 25, 2011). After the parties to the class action reached a settlement and the district court preliminarily certified the class, CalPERS opted out, deciding to pursue its individual claim. But because CalPERS had filed its individual action “more than three years after the securit[ies] [at issue] [were] offered to the public,” the district court dismissed its suit as beyond the Securities Act’s three-year statute of repose. The Second Circuit affirmed, ruling that the putative class action did not toll the Securities Act’s statute of repose for CalPERS’s individual suit. See In re Lehman Bros. Sec. & ERISA Litig., No. 15-1879, slip op. at 6 (2nd Cir. July 8, 2016), ECF No. 102. In doing so, it acknowledged that circuits are divided on this tolling question, noting a conflict between itself and the Tenth Circuit, based upon the rule in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974). Continue Reading