We’ve previously argued that courts should eliminate class action tolling of the statute of limitations in the mass tort context. In a nutshell, we see the rule first announced in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974) – allowing for tolling of the statute of limitations for all members of a putative federal class until the court’s class certification decision – to be a bit hoary in the current fast-paced, go-go world of MDL and state consolidations and mass actions. Pipe tolling is especially annoying in the mass tort personal injury context, where we all know that plaintiffs have a low likelihood of getting a class certified in federal court, and thus the filing of a class action feels like either: (1) a not-so-clever ruse to toll the statute of limitations while plaintiffs’ lawyers go out and solicit real-life, individual clients, or; (2) a not-so-clever ruse to get a seat at the table when the court picks the plaintiffs’ lawyers who will serve as “lead counsel” in the inevitable MDL/consolidation. There’s also the potential for real abuse of the doctrine, as individual plaintiffs may try to claim they are entitled to tolling of very different claims than those asserted in the class action.
While we wait for the courts to wake up and realize that Pipe tolling makes no sense for personal injury mass torts, we take some solace that at least the doctrine isn’t being abused too much every time we see a decision like this one from the Fosamax MDL out of the Southern District of New York. In re Fosamax Prods. Liab. Litig., 2010 U.S. Dist. LEXIS 23885 (Mar. 15, 2010). The quick procedural rundown, which is always important in Pipe tolling cases: (1) In 2005, plaintiffs file a nationwide personal injury class action in federal court in the Middle District of Tennessee (thank you, CAFA); (2) the case gets sent to New York as part of the MDL, where (insert ironic gasp here) the court denies class certification in 2008, 248 F.R.D. 389 (S.D.N.Y. 2008); (3) while the class action is pending, three Virginia plaintiffs file individual personal injury lawsuits (in 2007 and early 2008); and (4) a fourth Virginia plaintiff files her personal injury lawsuit a few months after class certification is denied.
The defendant moved for summary judgment, claiming that all four Virginia individual cases were barred by the statute of limitations. There was no dispute that Virginia’s two-year statute of limitations applied. Id. at *4. There was also no dispute that the four plaintiffs filed their individual lawsuits more than two years after they sustained their alleged injuries. Id. Case closed, right?
Not so fast, said the plaintiffs. They claimed that the Virginia statute of limitations should have tolled on their claims during the pendency of the class certification decision in the MDL, thanks to American Pipe and its progeny. Id. at *5-6. The court rejected this argument, and in doing so, refused to expand Pipe tolling to allow for “cross-jurisdictional tolling.” This is kind of a big deal in Pipe-land (which is a land ruled by egg-heads) – so big of a deal that we’ve written about it on a bunch of occasions, and even have a cross-jurisdictional tolling scorecard. Cross-jurisdictional tolling addresses the following scenario: Class action is filed in jurisdiction A. Subsequently, a putative class member files a lawsuit in jurisdiction B. Did the statute of limitations for the claims filed in jurisdiction B toll during the pendency of the jurisdiction A class certification decision?
Of course, for a federal court sitting in diversity and determining whether a state statute of limitations tolls for a state-law claim, the federal court has to apply state statutes of limitations, including state tolling principles. So the question becomes, what does the state law have to say about whether it’s adopted an expansive version of American Pipe tolling for a class action filed in another jurisdiction? Often, the answer is a deafening silence. In those cases, the federal court sitting in diversity has two choices: (1) decline to import cross-jurisdictional tolling absent a clear and explicit sign from the state’s legislature or highest court that the state is one of the few where the doctrine has been adopted; or (2) take a wild shot in the dark and guess that the state would adopt cross-jurisdictional tolling – they just haven’t gotten around to it yet. The Fosamax court took the high road, noting that “federal courts generally have been disinclined to import cross-jurisdictional tolling into the law of a state that has not ruled on the issue.” Id. at *8-9. We agree, and call the first approach a well-reasoned attempt faithfully to interpret applicable state law and respect the principles of comity and federalism. We call the second approach judicial activism. So, if we’re going to have to live with Pipe tolling for a while, at least we have courts like the Fosamax court refusing to expand the doctrine.