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The Third Circuit Addresses American Pipe Tolling before a Class Certification Decision

New Jersey Legal Pulse

The Third Circuit recently issued a decision holding that putative class members can benefit from equitable tolling even before a district court decides a motion for class certification. Aly v. Valeant Pharms. Int’l. Inc., No. 19-3326, __ F.3d __ (3d Cir. June 16, 2021).

The decision addresses a class action doctrine known as “American Pipe” tolling. Under American Pipe & Construction Company v. Utah, 414 U.S. 538 (1974), for which the doctrine is named, the statute of limitations for claims by putative class members is tolled from the time a putative class action complaint is filed until a class certification decision. The doctrine serves important policy goals. Without the rule, for example, putative class members would be forced to intervene or file their own claims while awaiting a decision on class certification in order to satisfy the statute of limitations. American Pipe, therefore, preserves the right for putative class members to file a timely complaint after class certification is denied while avoiding a multiplicity of lawsuits pending a class certification decision.

The Supreme Court has elaborated on the American Pipe doctrine in subsequent cases to clarify that tolling applies to separate lawsuits, not just motions to intervene, see Crown, Cork & Seal Co., 462 U.S. 345 (1983); that tolling only applies to statutes of limitations, not statutes of repose, see Cal. Public Employees’ Retirement System v. ANZ Securities, Inc., 137 S. Ct. 2042 (2017); and that tolling only applies to individual, rather than class, complaints, see China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018).

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