SAN FRANCISCO (Legal Newsline) – The U.S. Court of Appeals for the Ninth Circuit has reversed a lower court ruling, finding that plaintiffs are not time-barred from bringing a class action lawsuit under the Securities Exchange Act.
The court found that plaintiff Michael H. Resh’s class action is not time barred where, “(1) the plaintiffs were unnamed plaintiffs in two earlier would-be class actions against many of the same defendants based on the same underlying events, (2) class action certification was denied in both cases; (3) the earlier actions were timely; and (4) under American Pipe & Construction Co v. Utah, 414 U.S. 538 (1974), and Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983), the statute of limitations for the individual claims of would-be class members in the earlier actions was tolled during the pendency of those actions.”
The court explained that if Resh wished to file a complaint in another suit, it does not mean that Resh’s class action complaint against China Agritech Inc. cannot be appealed.
China Agritech Inc. is a holding company incorporated in Delaware with its main business in Beijing, China. The company is involved in manufacturing and selling organic compound fertilizers to farmers in 28 Chinese provinces.
The company listed its shares on the NASDAQ Stock Exchange in 2005. By 2009, they filed a net revenue of $76 million with the U.S. Securities and Exchange Commission (SEC), the opinion states.
In June 2014, Resh filed a class action against China Agritech Inc. and filed an amended complaint with other plaintiffs in September 2014. Resh and other plaintiffs alleged China Agritech Inc. violated two sections of the Securities Exchange Act.
In December 2014, the lower court granted China Agritech Inc. a motion to dismiss, claiming Resh and other plaintiff’s actions were untimely.
The appeals panel reversed this decision and held that Resh and other plaintiff’s actions were timely.