United States: U.S. Supreme Court Holds That Timely Class Action Complaint Does Not Toll Time For Subsequent, Untimely Class Actions

On June 11, 2018, the U.S. Supreme Court handed a victory to class action defendants in China Agritech, Inc. v. Resh, overturning a Ninth Circuit rule that allowed the filing of successive class action complaints, even after the limitations period expired. The Court held that the rule in American Pipe v. Construction Co., under which the timely filing of a putative class action tolls the time for filing individual claims (if class certification is later denied), does not apply to successive class actions. Justice Ginsburg's majority opinion, joined by seven justices, suggests the same rule applies to all manner of class action litigation. Only Justice Sotomayor, writing alone in concurrence, believed that the holding should be limited to suits, like China Agritech, brought under the Private Securities Litigation Reform Act of 1995 (PSLRA). The Court's decision will benefit defendants by preventing plaintiffs from repeatedly filing class action suits as an end run around statutes of limitation. The majority rejected the concerns of the plaintiffs that limiting tolling to individual claims would incentivize a "needless multiplicity" of protective class-action filings, expressing faith in district courts' ability to manage such challenges. Defendants will need to be mindful to work with courts to limit the potential ill effects of duplicitous class actions.

The American Pipe Rule

In American Pipe, the Supreme Court established a tolling rule under which the timely filing of a class action tolls the applicable statute of limitations for members of the class. Should class certification be denied, other individual plaintiffs would still be able to intervene in the original suit (or, as the Court later held, file their own separate suits). American Pipe left open the question of whether tolling also applied to successive class actions. The First, Second, Fifth, and Eleventh Circuits later held that it did not. In 2015, the Sixth Circuit ruled the other way, permitting American Pipe tolling for a successive class action, and the Ninth Circuit followed suit in 2017.

China Agritech v. Resh

In China Agritech, the Supreme Court reversed the Ninth Circuit and held that American Pipe does not apply to successive class actions. Writing for an eight-member majority, Justice Ginsburg distinguished the case from American Pipe. Whereas many of the beneficial efficiencies of the class action mechanism would be lost if every possible class member had to file an individual suit, incentivizing additional plaintiffs seeking to serve as class representatives to file earlier would enhance court efficiency, by allowing the courts to choose among potential class representatives, delineate appropriate sub-classes, or identify obstacles to proceeding as a class action. The majority held that Rule 23 of the civil rules (relating to class actions) itself supported this conclusion, thereby strongly suggesting that the rule adopted by the majority applies to all class action claims, and not just the type of securities claim at issue in China Agritech.

In her concurring opinion, Justice Sotomayor questioned whether the majority's holding should apply to all successive class action suits. Sotomayor noted that the PSLRA was a particularly poor statute to receive the benefits of tolling because it already required plaintiffs to publish a nationwide notice alerting putative class members of the action in order to permit selection of the best class representative. Sotomayor feared that statutes without similar notice requirements might foreclose unknowing plaintiffs from participation as lead plaintiffs in class actions. Instead, Justice Sotomayor proposed that tolling should only be unavailable when class certification is denied for a reason that bears on the suitability of the claims for class treatment.

What does China Agritech mean for class actions defendants?

China Agritech is a significant win for class action defendants, who will not have to worry about plaintiffs continuously filing class action suits to extend statutes of limitation indefinitely. The complaint in China Agritech, for example, was the third successive class action to be filed asserting the same claims. The plaintiffs (and Justice Sotomayor in her concurrence) suggested that the majority's rule could be bad for defendants because it would lead to an increase in unnecessary, duplicative class action suits by plaintiffs seeking to preserve their ability to bring class action claims if the initial class suit failed. But the majority rejected those concerns, noting that there was no evidence that the same rule in the Second and Fifth Circuits had increased "protective" class action filings. The majority observed that traditional tools at district courts' disposal like the ability to stay, consolidate, or transfer proceedings would be enough to manage these cases. Class action defendants will need to work closely with their counsel to ensure that duplicative, but timely, class action filings are handled in a way that prevents plaintiffs a "second bite at the apple," if class certification is denied in the lead case.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions