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IN RE WORLDCOM

United States District Court, S.D. New York


January 20, 2004.

IN RE WORLDCOM, INC. SECURITIES LITIGATION, This Document Relates to: 02 Civ. 3288 (DLC); SLS INVESTORS, L.P., et al., Plaintiff, -v- BERNARD J. EBBERS, et al., Defendants

The opinion of the court was delivered by: DENISE COTE, District Judge

MEMORANDUM OPINION AND ORDER

On October 3, 2003, SLS Investors, L.P., SLS Offshore Fund, Ltd., and GS SLS Portfolio, LLC (collectively "SLS") filed an action arising out of the collapse of WorldCom, Inc. alleging claims pursuant to the Securities Act of 1933 ("Securities Act") Page 3 as well as other federal and state law claims. SLS amended its action on October 24, 2003. On that same day, a class was certified in the WorldCom Securities Litigation. See In re WorldCom, Inc. Securities Litig., No. 02 Civ. 3288 (DLC), 2003 WL 22420467 (S.D.N.Y. Oct. 24, 2003) ("Certification Decision").

The defendants have moved to dismiss all of the Securities Act claims based on the rulings contained in In re WorldCom, Inc. Sec. Litig., No. 02 Civ. 3288 (DLC), 2003 WL 22738546 (S.D.N.Y. Nov. 21, 2003) ("November 21 Opinion"). The November 21 Opinion held, inter alia, that the one year/three statute of limitations applied to the Securities Act claims in the individual action addressed in that opinion, and that American Pipe tolling was not available to individual actions filed before there was a decision on class certification. SLS has been required to show why the November 21 Opinion does not require the motions to dismiss its Securities Act claims to be granted.

  In addition to preserving its right to contend that the November 21 Opinion was wrongly decided, SLS first argues that American Pipe tolling should apply to its action since its pleading included state law claims that are not being pursued in the class action. SLS cites no law to support this exception to the principles described in the November 21 Opinion. The relation — back doctrine may permit otherwise time — barred claims to be added to a complaint, but the American Pipe tolling doctrine does not. Page 4

  The American Pipe tolling doctrine is designed to discourage the filing a lawsuits pending a decision on the motion for class certification. As a consequence, any lawsuit or amendment of a pleading filed before that decision must be timely, based on the governing statute of limitations or other applicable principles of law. American Pipe tolling is not available simply because a federal claim is joined with a state law claim.

  SLS next contends that its entire amended pleading is timely since it was filed on the same day as the decision certifying a class in the WorldCom Securities Litigation. It contends that, "at a minimum," American Pipe tolling should permit it to sue the defendants who were named for the first time in the amended pleading.*fn1 SLS filed its action before the decision on certification. As a result, American Pipe tolling is unavailable to the entire action, including to its amended pleading.

  Conclusion

  The motions to dismiss the Securities Act claims in this action are granted.

  SO ORDERED.


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