U.S. Supreme Court Agrees to Address Reach of American Pipe in Securities Class Actions

U.S. Supreme Court Agrees to Address Reach of American Pipe in Securities Class Actions

 WASHINGTON, D.C. — (Mealey’s) The U.S. Supreme Court today agreed to hear an appeal in a lawsuit seeking a determination as to the reach of the American Pipe & Construction Co. v. Utah rule in securities class action lawsuits (Public Employees’ Retirement System of Mississippi v. IndyMac BBS Inc., et. al., No. 13-640, U.S. Sup.; See February 2014, Page 24).

Investors brought class action suits in the U.S. District Court for the Southern District of New York against IndyMac MBS Inc., Credit Suisse Securities (USA) LLC and other defendants, alleging violations of the Securities Act of 1933 (the Securities Act).  The suits were consolidated.

General Retirement System of the City of Detroit, Los Angeles County Employees Retirement System and Public Employees’ Retirement System of Mississippi (MissPERS) (collectively, the proposed interveners) moved to intervene and revive claims that were dismissed after the expiration of the statute of repose.  The District Court partially denied the motions, and the proposed interveners appealed to the Second Circuit U.S. Court of Appeals.

American Pipe Rule

The Second Circuit affirmed the District Court’s order insofar as it partially denied the motions to intervene.  The Second Circuit held that the tolling rule in American Pipe & Construction Co. v. Utah, 414 U.S. 538, 94 S. Ct. 756, 38 L. Ed. 2d 713 (1974) [an enhanced version of this opinion is available to lexis.com subscribers], does not apply to the three-year statute of repose in Section 13 of the Securities Act and “absent circumstances that would render the newly asserted claims independently timely, neither Rule 24 nor the Rule 15(c) ‘relation back’ doctrine permits members of a putative class, who are not named parties, to intervene in the class action as named parties in order to revive claims that were dismissed from the class complaint for want of jurisdiction.”

MissPERS then appealed to the Supreme Court.

The question presented is:  “Does the filing of a putative class action serve, under the American Pipe rule, to satisfy the three-year time limitation in § 13 of the Securities Act with respect to the claims of putative class members?”

Counsel

MissPERS is represented by David D. Frederick and Brendan J. Crimmins of Kellogg, Huber, Hansen, Todd, Evans & Figel in Washington, Elizabeth J. Cabraser and Joy A. Kruse of Lieff, Cabraser, Heimann & Bernstein in San Francisco and Michael J. Miarmi of Lieff Cabraser in New York.

The defendants are represented by Theodore B. Olson, Mark A. Perry, Matthew D. McGill and Jonathan C. Bond of Gibson, Dunn & Crutcher in Washington and Robert F. Serio, Aric H. Wu and Jason W. Myatt of Gibson Dunn in New York.

Amicus curiae Pension Funds are represented by Max W. Berger of Bernstein Litowitz Berger & Grossman in New York. 

Amicus NASCAT is represented by James J. Sabella of Grant & Eisenhofer in New York. 

Amici Civil Procedure and Securities Law Professors are represented by David Freeman Engstrom of Stanford Law School in Stanford, Calif.

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