Second Circuit rules that equitable tolling principles do not apply to the statute of repose under the Securities Act

Last week, the Second Circuit Court of Appeals affirmed a district court's decision, holding that the American Pipe tolling doctrine does not apply to the three-year statute of repose under the Securities Act of 1933.

In re IndyMac Mortgage-Backed Securities Litigation, the Second Circuit found that the U.S. Supreme Court's ruling in American Pipe & Construction Co. v. Utah that 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" does not apply to statutes of repose. These statutes, in general, have an "absolute" three-year limitation that is stricter than the statute of limitations, which can be subject to tolling.

The Second Circuit’s decision resolved a split of authority within the Second Circuit, but other U.S. Courts of Appeals, including the Federal, Fourth and Tenth Circuits, remain split.  For more, read the full decision.

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