China Agritech, Inc. v. Michael Resh, Et Al.

Whether the rule from American Pipe and Construction Co. v. Utah, 414 U.S. 538 (1974) tolls statutes of limitations to permit a previously absent class member to bring a subsequent class action outside the applicable limitations period.

Respondents are shareholders of Petitioner and are attempting for a third time to certify a class asserting violations of the Securities Exchange Act of 1934. The first two attempts of class certification were timely, but deficient. The federal district court’s interpretation of American Pipe and Construction Co. v. Utah, 414 U.S. 538 (1974), tolls the statute of limitations for individual claims, but not recurring class actions. Without the rule from American Pipe, the present claim may not proceed as it is indisputably outside the statute of limitations. On appeal, the Ninth Circuit reversed. It construed American Pipe to allow absent class members to bring claims on behalf of other absent class members even when the statute of limitations has passed and previous classes could not be certified. On appeal to the US Supreme Court, Petitioners highlight a circuit split on whether ill-timed class actions are permissible, noting opinions from the First, Second, Fifth, and Eleventh Circuits that diverge from the Ninth Circuit. The court below joined the reasoning of the Sixth and Seventh Circuits that allow successive class actions to “nevertheless go forward indefinitely.” To resolve the circuit split, prevent duplicative litigation, and avoid forum shopping, Petitioners ask the Court to reverse the Ninth Circuit decision.