The Second Circuit previously held, in Police & Fire Retirement System of the City of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013) (“IndyMac”), that the class action tolling rule set forth by the Supreme Court in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974) (“American Pipe”) does not apply to the statutes of repose in the federal securities laws.
The Second Circuit’s summary order in In re Lehman Brothers Securities & ERISA Litigation, Case No. 15-1879 (2d Cir. July 8, 2016), clarifies that IndyMac’s holding applies with equal force to opt-out actions. In doing so, the Second Circuit rejected arguments that plaintiffs have frequently made in an attempt to limit IndyMac’s reach, including that the IndyMac decision should be limited to situations where the class plaintiffs lack standing and that declining to toll a statute of repose violates absent class members’ due process rights to opt out of a class action.