On May 27, Judge Laura Taylor Swain of the Southern District of New York granted Morgan Stanley's motion for reconsideration and dismissed as time-barred claims brought by certain named plaintiffs (the New Plaintiffs) first added to the case more than a year after it was originally filed. The New Plaintiffs, several banks and pension funds, asserted claims under Sections 11, 12 and 15 of the Securities Act of 1933 but did so after the expiration of the three-year statute of repose applicable to such claims. In September 2011, Judge Swain originally held that the claims were nonetheless timely under the American Pipe tolling doctrine, which holds that the statute of limitations for an absent class member's individual claim is tolled during the pendency of a putative class action. In 2013, however, the Second Circuit in In re IndyMac Mortgage-Backed Securities Litigation, 721 F.3d 95 (2d Cir. 2013), held that American Pipe tolling applies to statutes of limitations, but does not apply to statutes of repose. (As discussed in the March 17, 2014, Week in Review, the Supreme Court granted a petition for a writ of certiorari in the IndyMac case to resolve the applicability of American Pipe to statutes of repose; the case remains pending). Upon reconsideration in light of the Second Circuit's IndyMac decision, Judge Swain held that the New Plaintiffs' claims were barred by the applicable statute of repose. She rejected the New Plaintiffs' attempt to rely on relation back under Rule 15 or joinder under Rule 17(a), finding those rules equally inapplicable to avoid statutes of repose as American Pipe tolling. Order.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
