U.S. Supreme Court Holds American Pipe Equitable Tolling Does Not Apply to the Securities Act’s Statute of Repose

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This week the U.S. Supreme Court addressed two significant inconsistencies in Securities Act jurisprudence.

Yesterday, the Court issued a long-awaited decision in California Public Employees’ Retirement System v. ANZ Securities, Inc. holding that the Securities Act of 1933’s statute of repose (the time period within which claims must be brought) cannot be equitably tolled during the pendency of a class action (commonly referred to as American Pipe tolling). The Court’s decision, which resolved a circuit split, will have far-reaching impact on both plaintiffs and defendants in securities actions.

Today, the Court granted certiorari in Cyan v. Beaver County Employees Retirement Fund and will decide next term whether state courts lack subject matter jurisdiction over covered class actions that allege only Securities Act of 1933 claims. The Court’s decision in this case will resolve the question of whether the Securities Litigation Uniform Standards Act of 1998 permits state court subject matter jurisdiction over class actions solely asserting Securities Act of 1933 claims, which some federal courts have accepted, while others have not.

In this alert, we assess the Court’s decision in ANZ Securities, its effect on securities litigation, and the anticipated extension of it by courts to other types of securities claims, and also provide an update on Cyan.

View the alert.