On June 11, 2018, the U.S. Supreme Court issued a decision that enforces a reasonable limitations period in class actions. The decision was a victory for WLF, which filed a brief urging the Court to reject efforts by the plaintiffs’ bar to authorize the filing of long-delayed class actions simply because another lawsuit was pending in the years prior to the class-action filings. A two-year statute of limitations applies to securities fraud lawsuits. Under current law, the statute is tolled with respect to individual claims while a putative class action is pending; absent class members have an opportunity to file their own suit if the court hearing that case denies a motion for class certification. But if the two-year limitations period has expired, an absent class member should not be permitted to file a second class action on behalf of other shareholders, the court held. Otherwise, the plaintiffs’ bar could file class actions seriatim in hopes that one eventually would be certified.
China Agritech, Inc. v. Resh