Paying the Toll To Be Class Member: The Impact of the American Pipe Doctrine on Section 13 of the Securities Act of 1933

Authors

Bryan Denberg

Document Type

Note

Abstract

(Excerpt)

This Note argues that the three-year statute of repose in Section 13 of the 1933 Act runs uninterrupted from the bona fide offering or sale of a security and operates as an absolute bar, extinguishing claimants’ rights to bring an action after the three year period ends. Part I of this Note provides an overview of the early legislation on which the 1933 Act is based and surveys the events that led to the Act’s current form. Thereafter Part I discusses four Supreme Court cases that courts are struggling to apply consistently in the context of claims governed by Section 13. Part II identifies the significance of how the doctrine established by the Supreme Court in American Pipe is characterized and the range of consequences the different classifications carry with respect to Section 13’s statute of repose. Part II also analyzes the conflicting interpretations of the doctrine articulated in American Pipe, which has led to the current split among courts. Lastly, Part III argues that Section 13’s statute of repose is not susceptible to what has become known as the American Pipe doctrine. Part III maintains that regardless of whether or not the American Pipe doctrine is recognized as a tolling doctrine, Section 13’s statute of repose bars actions brought pursuant to Sections 11 and 12 that are initiated more than three years after the bona fide offering or sale of a security.