Cleary Gottlieb Wins Supreme Court Ruling That Securities Act’s Statute of Repose Is Not Subject to Class-Action Tolling

June 30, 2017

This week, the Supreme Court issued an opinion that will significantly impact the scope of opt-out litigation from securities class actions, by holding that the Securities Act’s three-year statute of repose is not subject to class-action tolling.

California Public Employees’ Retirement System v. ANZ Securities, Inc., No. 16-373 (June 26, 2017).  Cleary Gottlieb has represented the respondents in this and more than a dozen related actions concerning Lehman Brothers securities since the fall of 2008, and served as co-counsel before the Supreme Court.

The impact of the CalPERS decision, in which the Supreme Court highlighted distinctions between statutes of repose and statutes of limitations, extends beyond cases asserting claims under the Securities Act to repose periods in other statutes, including claims under Section 10(b) of the Exchange Act.  The decision will prompt putative class members to consider whether to take protective actions within the repose period to maintain their ability to pursue individual recoveries after the expiration of the statute of repose, and will provide defendants with greater certainty about the scope of potential opt-outs when they settle class actions after the expiration of a repose period.