An international group of 75 pension funds and other institutional investors filed a Supreme Court amicus brief Tuesday seeking to restore a legal precedent on how much time investors have to join or opt out of class-action lawsuits.
The investors, who together represent $4 trillion in assets, are backing an appeal to the Supreme Court brought by the $311 billion California Public Employees’ Retirement System, Sacramento, against ANZ Securities, asking the court to decide whether the filing of a securities class-action suspends, also called tolls, the statute of limitations for all members of the asserted class. Without that clarity, potential plaintiffs would have to track and file cases separately before a limitations period expires in order to protect their right to sue, once the initial case is certified. The Supreme Court will hear arguments April 17.
Investors have long relied on a 1974 Supreme Court decision in American Pipe & Construction Co. vs. Utah holding that the commencement of a securities class action preserves the timeliness of their individual claims while a court decides whether to grant class-action status. That changed in 2013 with a 2nd U.S. Circuit Court of Appeals decision in Police & Fire Retirement System vs. IndyMac MBS Inc., which said that American Pipe applies only to the statute of limitations and not to the statute governing repose, which creates an absolute deadline for filing an action.
The case against ANZ and many other underwriters of Lehman Brothers debt offerings was settled, but CalPERS wants to pursue its own case, arguing that the filing of a similar class action should stop the clock.
The consequences of the 2013 decision have spread to other circuits, the investors’ brief argues, bringing additional costs for all parties and courts, “with no compensating benefits to any of the interests Congress was trying to protect in enacting the limitations periods” in the two relevant securities laws.
Securities litigation firm Bernstein Litowitz Berger & Grossmann is representing the amicus group, which includes the National Conference on Public Employee Retirement Systems, many large state and municipal U.S. pension funds, and large overseas investors such as the $468 billion APG Asset Management, Aegon Asset Management, with $351 billion in assets under management, and PGGM Investments in the Netherlands, which manages $210 billion in pension fund money.
“This tolling issue is of great importance to the institutional investor community, and it is extremely important for efficiency and resource purposes that the IndyMac decision is overturned,” said Blair A. Nicholas, the law firm’s San Diego-based managing partner, in an interview.