On May 20, 2016, the firm published an alert titled “Sixth Circuit Follows Second Circuit in Holding That Statutes of Repose Are Not Subject to Class Action Tolling.”
The Supreme Court acknowledged the significant differences between statutes of limitations and statutes of repose in CTS Corporation v. Waldburger, 134 S. Ct. 2175 (2014). The Sixth Circuit’s opinion in Stein v. Regions Morgan Keegan Select High Income Fund, Inc., Case Nos. 15-5903, 15-5905 (6th Cir. May 19, 2016), is the first by a circuit court to apply CTS to the statutory time limits applicable to private civil actions under the federal securities laws. Stein held that class action tolling does not toll the statutes of repose applicable to claims under Sections 11 and 12(a)(2) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. In so ruling, Stein embraced the Second Circuit’s conclusion in 2013 that repose periods are not subject to class action tolling, and rejected the opposite view reached in 2000, before CTS, by the Tenth Circuit. Whether statutes of repose can be tolled is a recurring issue with material consequences. Cases pending before two other circuits may result in a deeper split making Supreme Court review more likely, or a growing consensus reducing the likelihood of such review.