For Whom the Class Action Tolls: American Pipe to be Revisited
The United States Supreme Court recently granted certiorari in a significant case that will test the limits of class action tolling.
Since 1974, federal courts have held that the filing of a class action tolls the statute of limitations for the individual claims of the putative class members. However, cases have percolated among the federal district courts and circuit courts of appeals—with varying results—addressing the issue whether statutes of limitation were tolled allowing putative class members to bring their own successive class action lawsuit as named plaintiffs. That is, there is a split of authority whether putative class members from a previously defective or failed class action may then follow with an individual lawsuit, or file a successive class action lawsuit.
The United States Supreme Court appears ready to resolve this division.
The potential resolution of the case, China Agritech, Inc. v. Resh, is significant for a number of reasons. Foremost, the fact that courts are split almost certainly creates circumstances of potential forum-shopping.
In those district courts and circuits where successive class actions are permitted, e.g.,
Sixth Circuit, Seventh Circuit, and Ninth Circuit, plaintiffs and their lawyers may enjoy the opportunity to toll indefinitely the statute of limitation. On the other hand, in circuits where the courts permit only individual suits following a failed class action attempt, e.g.,
First Circuit, Second Circuit, Fifth Circuit, and Eleventh Circuit, the opportunity to continue with a class action is much more limited or even nonexistent. The different treatment of prospective plaintiffs and defendants, depending upon where suit is filed, is a significant impediment to uniformity among the federal courts.
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