American Pipe Tolling Does Not Apply To A Second (Or Third) Bite At The Class Action Apple, SCOTUS Holds
During the pendency of a pre-certification class action lawsuit, the statute of limitations for the potential class members is "tolled" under a 1974 U.S. Supreme Court decision often referred to as American Pipe. (The full case name is American Pipe & Constr. Co. v. Utah (1974) 414 U.S. 538.) Under American Pipe, if the trial court denies class certification, then the would-be class members can come forward and pursue individual lawsuits without the time-period over which the class action extended being counted against them for statute of limitations purposes. But what if class certification is denied and one or more would-be class members wants to try a second bite at the apple by filing a new class action lawsuit -- does the same tolling rule apply to class action lawsuits?
In an opinion issued on June 11, 2018, the U.S. Supreme Court held that the answer is "no." An individual's "[t]ime to file a class action lawsuit falls outside the bounds of American Pipe." The net effect of this ruling is that it will often prevent multiple successive class actions over the same claims.
The case is China Agritech, Inc. v. Resh and the opinion can be found here.
-John M. Scheppach