Client Alert

Second Circuit Declines to Extend American Pipe Tolling to Statute of Repose in Section 13 of the Securities Act of 1933

July 08, 2013


In Police & Fire Retirement System of City of Detroit v. IndyMac MBS, Inc., the Second Circuit addressed “an unsettled question of law” and held that American Pipe tolling does not apply to the three-year statute of repose in Section 13 of the Securities Act of 1933. In doing so, the Second Circuit is squarely in conflict with the Tenth Circuit and has elevated to the circuit level a dispute over how to apply American Pipe tolling in the securities context. In light of recent Supreme Court activity in seeking to resolve similar disagreements, particularly in the securities litigation context, this development may portend future review by that Court. Until the Supreme Court clarifies its holding in American Pipe, the Second Circuit’s decision provides defendants in securities cases a strong argument for defeating the stale claims of those who seek to invoke the statute of repose.

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