On June 26, 2017, in California Public Employees’ Retirement System v. ANZ Securities, Inc., the Supreme Court held that the three-year statute of repose in the Securities Act of 1933 prevents plaintiffs from pursuing individual actions under Section 11 more than three years after the challenged offering, even if a class action was pending, because the pendency of a class action tolls statutes of limitations and not statutes of repose. In resolving the circuit split on the issue, the Supreme Court, in a 5-4 decision, gave defendants a complete defense against suits initiated after the conclusion of that period. As a result, plaintiffs with Section 11 claims must opt out of a class action and file their own actions (or perhaps move to intervene in the class action) within the three-year period or be barred from pursuing individual claims. This holding provides class action defendants with greater certainty and predictability concerning their exposure and requires class action plaintiffs to consider filing timely actions to protect their ability to opt out of a future class settlement. Defendants in other types of class actions will doubtless look to characterize the limitations periods applicable to those types of claims as statutes of repose that also cannot be tolled.
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