Class Action Tolling Does Not Apply to Trusts That Did Not Join the Class

On May 10, 2022, in Zittman v. Bank of N.Y. Mellon, Index No. 656037/2021, Justice Andrew Borrok of the New York County Commercial Division held that tolling that saved claims brought by a class of certificate holders in residential mortgage-back security trusts did not apply to claims relating to trusts that were not part of the class even though the plaintiffs and trustee were the same and the claims similar. The Court explained:

Relying on NECA-IBEW Health & Welfare Fund v Goldman Sachs & Co., 693 F.3d 145 (2d Cir. 2012) and Chavez v Occidental Chem. Corp., 35 NY3d 492, 132 N.Y.S.3d 224, 158 N.E.3d 93 (2020), the Plaintiffs argue that all of the Trusts even those that were not part of the class (i.e., because the claims are similar to the class members) are entitled to class action tolling. The argument fails. These cases merely stand for the proposition that having similar claims is a requirement for class standing. They do not stand for the unsupportable proposition that class action tolling applies to potential plaintiffs that never joined the class. The result is not changed by the other cases relied on by the Plaintiffs where the court held that newly added members of the class are entitled to class action tolling. Therefore, dismissal is required as to the Trusts which otherwise would need to avail itself of class action tolling to have its claims be timely but can not [sic] because those Trusts were never part of the class.

The attorneys at Schlam Stone & Dolan frequently litigate class action claims and statute of limitations issues. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.