29 September 2014

Law in Plain English: Public Employees’ Retirement System of Mississippi v. IndyMac MBS, Inc.

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblogPublic Employees’ Retirement System of Mississippi v. IndyMac MBS, Inc.

Argument: Oct 6 2014 (Aud.)

Background: In American Pipe & Construction Co. v. Utah, the Supreme Court held that the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action. In this case, two securities class action lawsuits were filed against IndyMac, alleging violations of the Securities Act. The district court dismissed all claims because the original lead and sole named plaintiffs (a group of Wyoming entities) could not demonstrate standing. The dismissed claims included those involving securities purchased by other members of the asserted class (including the Public Employees' Retirement System of Mississippi, PERS), but none of whom were named plaintiffs in the original class action. PERS and other municipal retirement systems moved into intervene. Although the three-year period of repose in Section 13 had run on their claims, these plaintiffs invoked the tolling rule set forth in American Pipe. The district court denied the motions to intervene. The Second Circuit affirmed, distinguishing between a statute of limitations (which is subject to equitable considerations such us tolling) and a statute of repose (which is considered an absolute limitation).

Issue: The question before the Court is whether the filing of a putative class action serves, under American Pipe & Construction Co. v. Utah, to satisfy the three year time limitation in § 13 of the Securities Act with respect to the claims of putative class members.

Holding: The Supreme Court dismissed the writ of ceriorari as improvidently granted.
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