The year in review
Notable decisions in 2018 concerning class actions include the following cases.
In China Agritech, Inc v. Resh, the Supreme Court held that the filing of a timely putative class action does not extend (i.e., 'toll') the statutory time period within which an absent class member may file the same claim as a subsequent class action. Prior Supreme Court precedent - American Pipe & Construction Co. v. Utah - provides that, under certain circumstances, the commencement of a class action will suspend 'the applicable statute of limitations as to all asserted members of the class'. The Supreme Court found that the American Pipe rule only allowed the tolling of subsequent individual claims and did not permit the filing of successive class actions beyond the time prescribed by the applicable statute of limitations. Though considerations of 'efficiency and economy of litigation' supported tolling individual claims pending class certification, the Court found that those policies favoured the 'early assertion of competing class representative claims', allowing courts to decide the question of class certification 'once for all the would-be class representatives' and to 'select the best plaintiff with knowledge of the full array of potential class representatives and class counsel'.
In Cyan, Inc v. Beaver County Employees Retirement Fund, the Supreme Court held that the Securities Litigation Uniform Standards Act of 1998 (SLUSA) does not prohibit state courts from adjudicating class actions alleging violations of the Securities Act of 1933 (the Securities Act). SLUSA amended the Securities Act to prohibit certain state law securities class actions and to authorise the removal of other state law securities class actions to federal court. However, the Court found that nothing in SLUSA limited the Securities Act's grant of state court jurisdiction over class actions based on federal law. Consequently, the Securities Act class action was properly brought in state court where it was not subject to the additional procedural requirements applicable in securities class actions brought in federal courts.
Additionally, the Supreme Court approved amendments to Rule 23 in 2018. The amendments mainly address the procedure that applies to a proposed class-wide settlement, clarifying, among other things, the criteria courts need to consider in determining whether a class-wide settlement is fair, reasonable and adequate.