Supreme Court to consider CalPERS case against Lehman Bros.

The U.S. Supreme Court agreed Friday to consider reviving an attempt by the California Public Employees’ Retirement System to recover some of the $300 million it lost when the Lehman Brothers investment bank collapsed in 2008.

CalPERS, the nation’s largest public pension fund with more than 1.7 million state and local government workers as members, bought Lehman stocks and bonds between July 2007 and September 2008, when the bank filed for bankruptcy. The chief cause of the bankruptcy was the downward spiral of the U.S. housing market, in which Lehman had invested much of its assets.

At first, CalPERS was part of a class-action suit by other investors, but it decided to drop out and file its own suit rather than sharing in a $417 million settlement in 2011. The pension fund, which estimated its losses at $300 million, has reported recovering $90 million from Lehman’s bankruptcy proceedings and another $28 million in settlements with the bank’s auditor, former officers and directors, and some underwriters.

But its suit against other underwriters and financial institutions, whom it accused of misrepresentations in the investment offerings, was dismissed by federal courts in New York, where all Lehman-related cases were transferred. The courts said the three-year legal deadline for filing securities lawsuits had started to run in July 2007, when the bank made its first securities offering, so CalPERS’ February 2011 suit was too late.

CalPERS argued that the deadline should have been suspended when it joined the class-action suit, which was filed before the three-year deadline. The Supreme Court had ruled nearly 43 years ago that plaintiffs who take part in a class action can be allowed more time to file their own suits, but hasn’t yet decided whether such an extension applies to securities cases.

The justices indicated they would resolve that issue when they announced Friday that they had granted review of CalPERS’ appeal. The court has only eight members, following the death of Justice Antonin Scalia in February, so it may wait until the term that starts in October before hearing the case.

The case is CalPERS vs. ANZ Securities, 16-373.

Bob Egelko is a San Francisco Chronicle staff writer.