This month, the Supreme Court resolved an emerging circuit split on the availability of tolling for successive class action claims. The split concerned differing interpretations of the Court's decision in American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974), which holds that the statute of limitations may be tolled for putative class members during the pendency of a class action. Under American Pipe and subsequent cases, in the event that a class is not certified, putative class members may either (a) join the ongoing action individually, or (b) file new individual actions, notwithstanding the expiration of the limitations period.

In China Agritech, Inc. v. Resh, 584 U.S. ___ (2018), the Court clarified that the American Pipe tolling rule only extends to putative class members who file individual claims after a court declines to certify a class. Tolling under American Pipe does not apply to putative class members who file a new class action complaint beyond the limit set by the applicable statute of limitations.

The Court explained that the purpose of American Pipe tolling is to promote judicial economy (which it said is also a key purpose of the Rule 23 class action procedure) by eliminating the need for would-be class members to file protective motions to secure their claims in the event that the class is not certified. In China Agritech, the Court explained that the same judicial economy considerations warrant the opposite result with respect to filing subsequent class action lawsuits: it is in the interest of the courts and all litigants to resolve class representative issues as early as possible in the litigation, instead of permitting would-be class representatives to wait in the wings while others forge ahead with their claims.

The decision provides new certainty to class action defendants. In the event that a class action complaint fails to achieve certification, and the limitations period has run, putative class members standing on the sidelines may no longer file a new class action complaint.

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