In 2007 and 2008, Lehman Brothers raised capital through several public securities offerings. In 2008, a putative class action asserted claims under Section 11 of the Securities Act, alleging that the registration statements included material misstatements or omissions. Because the complaint was filed on behalf of all persons who purchased the identified securities, petitioner was a member of the putative class. In 2011, petitioner filed a separate complaint against respondents alleging violations identical to those asserted in the class action. Soon thereafter, a proposed settlement was reached in the putative class action, but petitioner opted out of the class. Respondents then moved to dismiss petitioner’s individual suit, alleging that the  Section 11 violations were untimely under Section 13 of the Act, (i.e. “In no event shall any such action be brought to enforce a liability created under [Section 11] more than three years after the security was bona fide offered to the public” 15 U.S.C. §77m). The District Court, the Second Circuit, and the U.S. Supreme Court each held that American Pipe was limited to statutes of limitations, and did not apply to statutes of repose.

“The 3–year time bar in §13 reflects the legislative objective to give a defendant a complete defense to any suit after a certain period. From the structure of §13, and the language of its second sentence, it is evident that the 3–year bar is a statute of repose….

“Tolling may be of great value to allow injured persons to recover for injuries that, through no fault of their own, they did not discover because the injury or the perpetrator was not evident until the limitations period otherwise would have expired. This is of obvious utility in the securities market, where complex transactions and events can be obscure and difficult for a market participant to analyze or apprehend. In a similar way, tolling as allowed in American Pipe may protect plaintiffs who anticipated their interests would be protected by a class action but later learned that a class suit could not be maintained for reasons outside their control. 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 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.”


California Public Employees’ Retirement System v. ANZ Securities, No.16-373, 2017 WL 2722415 (June 26, 2017).