1 F.4th 168
3d Cir.2021Background
- Valeant shareholders purchased stock during Feb–Oct 2015; allegations that Valeant engaged in deceptive practices inflated its stock price and triggered securities litigation.
- Multiple class complaints were consolidated; operative consolidated class complaint filed June 24, 2016 alleging Section 10(b), Rule 10b-5, and Section 20(a) claims governed by a 2‑year limitations period and a 5‑year statute of repose.
- Appellants (putative class members) filed an individual (opt-out) complaint on Dec 19, 2018—before the district court ruled on class certification—bringing the same claims.
- The district court dismissed the individual complaint as time‑barred, holding American Pipe tolling does not apply to individual suits filed before a certification decision.
- On appeal the Third Circuit held American Pipe tolling applies to pre‑certification individual filings (to avoid penalizing members who file early or who face overlapping repose periods), vacated the dismissal, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether American Pipe tolling suspends the statute of limitations for individual opt‑out suits filed before a district court rules on class certification | American Pipe tolls limitations from the filing of the class action and that tolling should cover individual suits filed either before or after certification | Tolling applies only after a class‑certification denial; pre‑certification individual suits cannot rely on American Pipe and are untimely | American Pipe tolling applies upon commencement of the class action and remains in effect for putative members; pre‑certification individual claims are tolled — case remanded |
Key Cases Cited
- American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) (establishes that filing a class action tolls the statute of limitations for putative class members)
- Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983) (extends American Pipe tolling to individual suits filed after certification is denied)
- CalPERS v. ANZ Secs., 137 S. Ct. 2042 (2017) (holds American Pipe does not toll statutes of repose and rejects constructive‑filing theory)
- China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018) (declines to allow American Pipe tolling to revive successive class actions filed after limitations expired)
- In re WorldCom Sec. Litig., 496 F.3d 245 (2d Cir. 2007) (adopts view that American Pipe tolling covers individual suits filed before or after certification decision)