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Escott v. Barchris Constr. Corp. - 340 F.2d 731 (2d Cir. 1965)

Rule:

The statute of limitations is tolled for those in whose behalf a representative action is brought as well as for those who actually bring the action. If a class action is maintainable as such, it is incongruous to say that the absent members, who are represented by those present, may not rely upon the commencement of the action by their brethren to toll the running of the statute.

Facts:

Plaintiff debenture holders filed a class action for damages against defendant corporation to recover damages under § 11 of the Securities Act of 1933 for a false registration statement. Intervenor debenture holders filed a motion to intervene. The trial court denied the motion on the ground that it was barred by the statute of limitations. Intervenors sought review of the order.

Issue:

Was the motion to intervene barred by the statute of limitations?

Answer:

No.

Conclusion:

The court reversed, holding that intervenors' action was not barred by the statute of limitations because plaintiffs' action was timely filed. The original action was filed as a class action pursuant to Fed. R. Civ. P. 23 and was representative of intervenors' claims. Questions of law and fact were common to all the asserted claims, therefore defendants were made aware of the nature of the evidence that would be needed at the trial. Since the action was brought on behalf of all others similarly situated, defendants were on notice of the possibility of intervenors' claims.

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