In American Pipe and Construction Co. v. Utah, 414 U.S. 538 (1974), the Supreme Court held that the filing of a class action complaint tolls the statute of limitations for members of the proposed class. Trial courts have struggled with whether the American Pipe rule also applies to toll statutes of repose that extinguish the right to relief after a given period of time even if the plaintiff could not have been aware of its cause of action until after the time period expired. In Police & Fire Retirement System of the City of Detroit v. IndyMac MBS, Inc., No. 11- 2998-cv (2d Cir. June 27, 2013), the Second Circuit refused to extend the American Pipe rule to toll the threeyear statute of repose in Section 13 of the Securities Act.

The court reasoned that, although statutes of limitations are generally equitable in nature and therefore subject to equitable tolling principles, statutes of repose grant defendants a substantive right to be free from liability after a legislatively determined period of time. Accordingly, a statute of repose is absolute unless subject to a legislatively created exception. Although the court’s holding is limited to the three-year statute of repose in Section 13, its reasoning would likely apply to other Sections of the Securities Act as well as statutes of repose in other contexts, including the False Claims Act and state product liability statutes.