CalPERS v. ANZ Securities—U.S. Supreme Court Holds That Securities Act’s Three-Year Statute of Repose Is Not Tolled by a Pending Class Action: Decision Has Important Implications for Class Action Lawsuits and Potential Opt-Out Claimants

Sullivan & Cromwell LLP - June 27, 2017

Yesterday, in a case closely watched by the securities bar, the U.S. Supreme Court held in California Public Employees’ Retirement System v. ANZ Securities that American Pipe tolling is inapplicable to the three-year statute of repose for claims brought under Section 11 of the Securities Act of 1933, because statutes of repose, as opposed to statutes of limitations, are not subject to equitable tolling.  As a result of yesterday’s decision, the filing of putative class action lawsuits will serve only to toll statutes of limitations but not statutes of repose.  The ruling may encourage unnamed putative class members in cases subject to statutes of repose to file separate actions or to seek to join the putative class action as a named plaintiff before the statute of repose expires in order to protect their right to pursue individual claims at a later stage.  Yesterday’s decision will also allow class action defendants in cases where statutes of repose apply to better assess the risk they face from opt-out litigants and other potential individual actions beyond the risks faced from the putative class action.