Source: http://www.brokeandbroker.com/3512/calpers-supreme-court/
Timestamp: 2019-04-22 02:38:53+00:00

Document:
16-373 CA PUBLIC EMPLOYEES' RETIREMENT V. ANZ SECURITIES, INC.
This case presents two questions about whether, under American Pipe & Construction Co. v. Utah, 414 U.S. 538, 554 (1974), a member of a putative damages class can opt out of the class action and pursue its individual claims if the class action was timely, but the individual class member's complaint was filed more than three years after the offending conduct such that it could arguably be barred by a three-year statute of repose. The Second Circuit affirmed the dismissal of petitioner's claims as untimely, applying circuit precedent from a case in which this Court granted certiorari but did not reach the merits because the case settled. See Police & Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013), cert. granted sub nom., Pub. Emps.' Ret. Sys. of Miss. v. IndyMac MBS, Inc., 134 S. Ct. 1515 (2014), cert. dismissed as improvidently granted , 135 S. Ct. 42 (2014). Here, the court of appeals acknowledged a circuit split, and stated that "the Supreme Court is in the best position to resolve" these questions, which "implicate the very nature of American Pipe tolling."
2. May a member of a timely filed putative class action file an individual suit on the same causes of action before class certification is decided, notwithstanding the expiration of the relevant time limitations?
LIMITED TO QUESTION 1 PRESENTED BY THE PETITION.
Respondents then moved to dismiss petitioner's individual suit alleging §11 violations as untimely under the 3-year bar in the second sentence of §13. Petitioner countered that its individual suit was timely because that 3- year period was tolled during the pendency of the class action filing. The principal authority cited to support petitioner's argument that the 3-year period was tolled was American Pipe & Constr. Co. v. Utah, 414 U. S. 538 (1974).
The Court of Appeals also rejected petitioner's alternative argument that its individual claims were "essentially 'filed' in the putative class complaint," so that the filing of the class action within three years made the individual claims timely. 655 Fed. Appx., at 15. . .
(1) The two categories of statutory time bars-statutes of limitations and statutes of repose-each have "a distinct purpose." CTS Corp. v. Waldburger, 573 U. S. ___, ___. Statutes of limitations are designed to encourage plaintiffs " 'to pursue diligent prosecution of known claims,' " id., at ___, while statutes of repose "effect a legislative judgment that a defendant should 'be free from liability after the legislatively determined period of time,' " id., at ___. For this reason, statutes of limitations begin to run "when the cause of action accrues," while statutes of repose begin to run on "the date of the last culpable act or omission of the defendant." Id., at ___.
(b) Also unpersuasive is petitioner's alternative argument: that §13's requirement that an "action" be "brought" within three years of the relevant securities offering is met here because the filing of the class-action complaint "brought" petitioner's individual "action" within the statutory time period. This argument presumes that an "action" is "brought" when substantive claims are presented to any court, rather than when a particular complaint is filed in a particular court. The term "action," however, refers to a judicial "proceeding," or perhaps a "suit"-not to the general content of claims. Taken to its logical limit, petitioner's argument would make an individual action timely even if it were filed decades after the original securities offering-provided a class-action complaint had been filed within the initial 3-year period. Congress would not have intended this result. This argument is also inconsistent with the reasoning in American Pipe itself. If the filing of a class action made all subsequent actions by putative class members timely, there would be no need for tolling at all. Pp. 14-15.
The purpose of a statute of repose, on the other hand, is to allow more certainty and reliability. These ends, too, are a necessity in a marketplace where stability and reliance are essential components of valuation and expectation for financial actors.
The statute in this case reconciles these different ends by its two-tier structure: a conventional statute of limitations in the first clause and a statute of repose in the second. The statute of repose transforms the analysis. In a hypothetical case with a different statutory scheme, consisting of a single limitations period without an additional outer limit, a court's equitable power under American Pipe in many cases would authorize the relief petitioner seeks. Here, however, the Court need not consider how equitable considerations should be formulated or balanced, for the mandate of the statute of repose takes the case outside the bounds of the American Pipe rule.
The final analysis, then, is straightforward. The 3-year time bar in §13 of the Securities Act is a statute of repose. Its purpose and design are to protect defendants against future liability. The statute displaces the traditional power of courts to modify statutory time limits in the name of equity. Because the American Pipe tolling rule is rooted in those equitable powers, it cannot extend the 3- year period. Petitioner's untimely filing of its individual action is ground for dismissal . . .
Today's decision disserves the investing public that §11 was designed to protect. The harshest consequences will fall on those class members, often least sophisticated, who fail to file a protective claim within the repose period. Absent a protective claim filed within that period, those members stand to forfeit their constitutionally shielded right to opt out of the class and thereby control the prosecution of their own claims for damages. See Wal-Mart Stores, Inc. v. Dukes, 564 U. S. 338, 363 (2011) ("In the context of a class action predominantly for money damages," the "absence of . . . opt-out violates due process."). Because critical stages of securities class actions, including the class-certification decision, often occur years after the filing of a class complaint, the risk is high that class members failing to file a protective claim will be saddled with inadequate representation or an inadequate judgment.

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