November 12, 2019

November 11, 2019

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U.S. Supreme Court Limits Potential for Repeat Class Actions

In a unanimous opinion handed down this week, the U.S. Supreme Court provided needed protection against the specter of successive class action lawsuits. In China Agritech v. Resh, the court held that the mere filing of a case labeled as a class action does not “toll” or pause the statute of limitations for future class actions addressing the same claims. The court’s opinion holds that if the statute of limitations expires while a class action case is pending, a member of the class may not assert a second class action of the time-barred claim even if the court in the first case denies class action status.

The court had previously held that the filing of a class action lawsuit tolls the statute of limitations period for claims brought by individuals in the event the court denies a motion to certify a class action. This holding protected individuals from the statute of limitations in the event an attempt at a class action ultimately failed. It allowed individuals to hold off suing on their own claims until it the courts could determine whether there was going to be a class action

Writing for a unanimous Supreme Court, Justice Ginsburg refused to extend that logic to future class actions (as opposed individual claims.) The opinion concluded that “the ‘efficiency and economy of litigation’ that support tolling of individual claims . . . do not support maintenance of untimely successive class actions.” As the court explained, “there is little reason to allow plaintiffs who passed up opportunities to participate in the first (and second) round of class litigation to enter the fray several years after class proceedings first commenced.”

Under this holding, if the limitations period for a claim expires while a case remains pending, the class members cannot bring a second class action lawsuit asserting the claim even if the first court refused to certify the case as a class action. Instead, the limitations period forever bars hearing the claim as a class action.

The facts of the China Agritech opinion illustrate the danger a contrary result would pose. The lawsuit is the third separate class action asserting the same allegation that a company’s misfeasance had injured its stock price. A federal court refused to grant class certification after a group of plaintiffs sued in 2011. A second lawsuit followed in 2012, but the courts again denied class certification. The same lawyers then filed a third class action complaint in 2014. The Supreme Court held that enough was enough and barred further class litigation of the claim.

Justice Sotomayor wrote separately to suggest that the court’s holding should be limited to actions under federal securities law. No other justice joined her opinion.

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Brian Casey Business & Securities Litigation Attorney
Partner

Brian Casey is a partner in the Litigation Department of Barnes & Thornburg's South Bend, Indiana, office. He concentrates his practice on business litigation, particularly securities and ERISA litigation, as well as appellate practice.

Brian has represented issuers, and their directors and officers in private securities fraud class actions, SEC and Department of Labor investigations and enforcement actions, as well as investigations by the Department of Justice and the Internal Revenue Service. He has represented ERISA plan sponsors, plan administrators, and plan fiduciaries in...

574-237-1285
Mark Crandley Litigation Attorney
Partner

Appellate adviser and litigator Mark Crandley is at his best when faced with high-stakes claims that involve issues of critical importance and concern. After nearly two decades of practice, Mark knows what does and does not work. Clients and colleagues alike rely upon him for his judgement and leadership throughout the dispute resolution process.

Mark focuses his practice on appeals, constitutional and government law, commercial litigation, and the resolution of probate disputes. He has represented government entities and businesses in courts across the country, and is valued for his skill in creating effective and efficient litigation strategies, particularly in expedited litigation.

As co-chair of the firm’s Appeals and Critical Motions practice and a founder and chair of the firm’s Government Litigation group, Mark has represented clients in scores of appeals in both state and federal courts. He has argued before the Indiana Supreme Court on numerous occasions and has also argued before the U.S. Court of Appeals for Seventh Circuit and for the Sixth Circuit Court, the Indiana Court of Appeals and the Ohio Court of Appeals. Mark has also authored dozens of amicus curiae briefs, including amicus briefs submitted to the U.S. Supreme Court. Mark collaborates with other Barnes & Thornburg attorneys to produce an annual review examining the Indiana Supreme Court’s docket that is published by the Indiana Law Review.

Mark’s practice includes representing local governments in litigation throughout the state of Indiana. He has litigated a broad spectrum of constitutional and municipal law issues, including cases involving municipal utilities, annexation, municipal finance, government contracting, the Home Rule Act, zoning and the federal and Indiana constitutions. He has represented clients in cases of first impression regarding access to public records, public-private partnerships, municipal reorganization, and election issues. He has defended complex constitutional challenges to a variety of state laws and local ordinances. In addition, Mark regularly speaks on topics affecting state and local governments and has co-taught a law school class on the Indiana Constitution.

Mark’s commercial litigation practice includes litigation in both state and federal court, where he has tried cases both to the bench and to juries. He has represented clients in cases involving breach of contract, Articles 2, 3, 4 and 9 of the Uniform Commercial Code, trade secrets and various forms of trade regulation.

Mark also represents individuals and corporate fiduciaries in probate disputes. He has tried multiple trust and guardianship cases throughout Indiana and on appeal.

Prior to rejoining the firm in 2005, Mark served as in-house counsel for the city of Indianapolis, representing the city in complex civil rights litigation and appeals in state and federal courts. As a result, Mark has an inside perspective on how government agencies operate and what drives their decision-making process, often a key component of effectively representing them today.

Before launching his legal career, Mark worked as a newspaper reporter and editor.

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L Rachel Lerman, Barnes Thornburg Law Firm, Los Angeles, Finance Law Attorney
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L. Rachel Lerman is a partner in Barnes & Thornburg LLP’s Los Angeles office and a member of the firm’s Litigation Department. Formerly a partner at Akin Gump Strauss Hauer & Feld LLP, she focuses on appellate practice and trial strategy in complex civil cases. She has handled writs and appeals in commercial, bankruptcy, patent, trade mark, trade secret, labor, insurance defense, white collar, and family law cases in state and federal courts nationwide. She works regularly with trial counsel on law and motion and trial strategy.

310-284-3871
Peter J. Rusthoven, Barnes Thornburg Law Firm, Indianapolis, Corporate, Finance and Litigation Law Attorney
Partner

Peter J. Rusthoven, a partner in the Indianapolis, Indiana office, has a multi-dimensional practice. His business experience includes transactional and corporate governance work, in areas ranging from manufacturing to publishing to healthcare. He was active in drafting Indiana's corporation statute and official comments and has frequently written and spoken on corporate change-of-control issues. In the governmental services area, he is experienced in gaming and alcoholic beverage licensing and other regulatory and legislative services matters.

317-231-7299