The Second Circuit last week ruled on a key aspect of the timing of securities suits. Under the Supreme Court’s decision in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), plaintiffs are often able to revive claims by relying on earlier-filed class actions to toll the statute of limitations. RMBS plaintiffs have recently turned to American Pipe when their putative class actions are dismissed for lack of standing.
In In re IndyMac Mortgage-Backed Securities Litigation, lead plaintiffs lacked standing to bring certain claims, which were dismissed by the district court. Other members of the asserted class—who had not been named as plaintiffs—sought to intervene in the action in order to bring those dismissed claims. Judge Lewis A. Kaplan of the United States District Court for the Southern District of New York denied the investors’ motions to intervene. READ MORE