In 1974, the Supreme Court of the United States issued a decision in American Pipe & Constr. Co. v. Utah that allowed individuals to bring a claim after the statute of limitations ended if the court did not allow a class action complaint that encompassed them to go forward. Ultimately, the American Pipe holding tolled (paused), the statute of limitations on a claim brought by an individual while a court was deciding the appropriateness of the class action claim. However, on June 11, 2018, in a 9-0 decision, the Supreme Court limited the American Pipe tolling rule to individual claims, not successive class action suits.
In China Agritech, Inc. v. Resh, an employee, Michael Resh, filed a class action a year and a half after the statute of limitations for his claim expired. Prior to the statute of limitations expiring, the court had denied two class action claims. The employee argued that his claim was timely because the rejection of the two prior class actions tolled the statute of limitations. The Court rejected his argument and found his claim was untimely since it was filed after the statute of limitations expired. Importantly, the Court further held that the tolling rule established in American Pipe did not apply to successive class action claims, because it could result in an endless extension of the statute of limitations (the statute of limitations would be extended each time a class action was filed).
While the Court’s holding in China Agritech limits the ability of plaintiffs to bring class action claims, it also exposes employers to multiple individual claims if the court does not allow a class action suit to proceed.