In the

United States Court of Appeals

For the Seventh Circuit ____________

Nos. 04-1713, 04-1714, 04-1715, 04-1716, 04-1717, 04-1719

IN RE

COPPER ANTITRUST LITIGATION

____________

Appeals from the United States District Court 

for the Western District of Wisconsin.

Nos. 02-C-0707-C, 03-C-0314-C, 03-C-0316-C,

03-C-0317-C, 03-C-0318-C, 03-C-0368-C,

MDL Docket No. 1303—Barbara B. Crabb, Chief Judge. 

____________

ARGUED NOVEMBER 1, 2004—DECIDED FEBRUARY 6, 2006

____________

Before CUDAHY, ROVNER, and WOOD, Circuit Judges.

WOOD, Circuit Judge. Although this appeal arises out

of the extensive alleged conspiracy to fix prices in various

copper markets that this court addressed in Loeb Indus.,

Inc. v. Sumitomo Corp., 306 F.3d 469, 477 (7th Cir. 2002)

(Loeb I), the issues that concern us here would find a more

comfortable home in a civil procedure class than an antitrust class. We must decide whether, on the basis of any of

the theories the plaintiffs have presented to us, some or all

of their claims are entitled to go forward. The district court

found that the plaintiffs filed their suit too late, based on an

accrual date that it thought could not be disputed. It also

rejected plaintiff Southwire’s argument that the earlier

litigation that reached this court in Loeb I tolled its claims

against two of the defendants long enough to make them
2 Nos. 04-1713, et al.

timely in this case. Finally, it concluded that the federal

statute of limitations applicable to the plaintiffs’ claims was

not tolled during the pendency of certain state class actions

in the California courts, which were necessarily based on

state rather than federal antitrust law.

We conclude that the district court erred in its conclusion

that the undisputed facts demonstrate that the plaintiffs’

right to sue J.P. Morgan has to be measured from July 23,

1996. Whether viewed as a question of the time when the

plaintiffs reasonably could have discovered that Morgan

had anything to do with their injuries or viewed as a

question of equitable estoppel and fraudulent concealment,

the facts taken in the light most favorable to the plaintiffs

could support a finding that their suit was timely. We find,

however, that the plaintiffs’ claims against Sumitomo and

Global were correctly dismissed, as that set of claims does

not benefit from any form of tolling. We therefore affirm in

part and reverse and remand in part for further proceedings

consistent with this opinion.

I

Loeb I describes the allegations about the extensive

manipulations of the copper market that gave rise to

these suits. We therefore limit our discussion of the facts

(taken for present purposes in the light most favorable to

plaintiffs) to those that are of particular relevance. See

generally 306 F.3d at 474-78. Briefly, in the underlying

actions that were consolidated under the multidistrict

litigation (MDL) statute, 28 U.S.C. § 1407, a group of

purchasers of copper rod and cathode sued J.P. Morgan

Chase & Company, and Morgan Guaranty Trust Company

of New York (collectively referred to as Morgan) for their

participation in the copper price-fixing scandal of the 1990s,

claiming that the defendants had violated the Sherman Act,

15 U.S.C. § 1, et seq., and the Clayton Act, 15 U.S.C. § 15,
Nos. 04-1713, et al. 3

et seq. In a separate action, plaintiffs Southwire Company

and Gaston Copper Recycling Corporation, a wholly owned

subsidiary of Southwire (collectively referred to as

Southwire), sued Sumitomo Corporation and Global

Minerals & Metals Corporation (Global), claiming that the

latter two companies had combined to manipulate the price

of copper by artificially restricting the physical supply of

copper and creating a false demand for it. These manipulations allegedly “caused the price of primary copper to rise

more than 50% over a two-year period.” Loeb I, 306 F.3d at

477. In June 1996, when Sumitomo announced that it had

lost over $1.8 billion as a result of the supply restriction

scheme perpetrated in large part by its employee Yasuo

Hamanaka, “the trading price for copper dropped by a third

almost overnight. The prices of physical copper cathode,

rod, and scrap crashed comparably.” Id.

In Loeb I, we upheld the district court’s dismissal of

a putative class that included purchasers of only copper

scrap, because their injuries were indirect. 306 F.3d at 475.

In the same decision, we held that the purchasers of copper

rod and cathode could go forward with their antitrust

claims against Morgan because they had suffered “direct

and independent” injuries. Id. This case raises the question

whether the next chapter of the litigation can proceed.

A. The Parties

The majority of plaintiffs now before us are purchasers of

copper cathode and copper rod. This group includes the

following companies: Asarco Inc., American Insulated

Wire Corp., Essex Electric Inc., Kennecott Utah Copper

Corp., Leviton Manufacturing Company, Inc., Mueller

Copper Tube Company, Inc., Mueller Copper Tube Products, Inc., and Superior TeleCom, Inc. (now known as

Superior Essex, Inc.). We collectively refer to this entire

group of plaintiffs as the Asarco Group. Plaintiff South-
4 Nos. 04-1713, et al.

wire Company manufactures and distributes electrical

quality copper rod, wire and cable.

Defendant Sumitomo is a Japanese trading corporation

that allegedly engaged in various trades and transactions

to fix the price of copper from September 1993 to June 1996.

Global is a copper merchant that allegedly engaged in

transactions with Sumitomo to restrict the physical supply

of copper. Morgan provided loans to Sumitomo during the

relevant time period.

B. The District Court Proceedings

Our decision in Loeb I allowing the claims of purchasers

of cathode and rod to go forward gave rise to a new round of

litigation. The dates when these suits were commenced are

important to the central statute of limitations issue.

Southwire filed its complaint against defendants Morgan,

Sumitomo, and Global on December 30, 2002. On June 13,

2003, the Asarco Group filed their actions against Morgan,

except for plaintiff Superior TeleCom, Inc., which filed its

action on July 11, 2003. On September 4, 2003, the district court consolidated the actions with the rest of the

copper antitrust litigation for pretrial purposes. 

On March 3, 2004, the district court granted Morgan’s

motion for summary judgment against the Asarco Group

and converted Morgan’s motion to dismiss against

Southwire into a motion for summary judgment. The

court granted these motions, finding that all of the plaintiffs’ claims against Morgan were filed after the expiration of the applicable four-year limitations period. See 15

U.S.C. § 15b. It came to the same conclusion for Southwire’s

claims against Sumitomo and Global.

The first issue that the court addressed was when the

plaintiffs’ claims accrued. In one order, it confirmed that

Southwire’s claims against Sumitomo and Global accrued

on June 14, 1996, as Southwire had admitted in its com-
Nos. 04-1713, et al. 5

plaint. In another order, it selected the date July 23, 1996,

as the point when all claims against Morgan had accrued,

placing conclusive weight on the fact that by this time, the

general press had reported that Sumitomo had financed its

transactions through Morgan. For example, an article

published in The New York Times on June 17, 1996,

reported that the Commodity Futures Trading Commission

was investigating ties between Sumitomo and Global. This

article also reported that Morgan and Bankers Trust had

taken “an active part” in the hedging transactions of the

copper market. The court also referenced an Associated

Press release dated July 23, 1996, stating that “[l]oan

agreements between Sumitomo and Chase Manhattan Corp.

and J.P. Morgan & Co. are under scrutiny because they may

have played a role in [Yasuo] Hamanaka’s attempt to buy

large supplies of copper and artificially boost copper prices.”

Finally, the court relied on a Wall Street Journal article

published the same day discussing loans that were made in

the form of derivative contracts from Chase to Sumitomo in

the amount of $500 million and from Morgan to Sumitomo

in the amount of $400 million. The article described the

loans as being “unusually structured.” Based on these

reports and articles that appeared later in 1996 and 1997,

the district court reasoned that:

[p]laintiffs do not argue that as of July 23, 1996, they

did not know that they had been injured or that

Sumitomo was potentially responsible for the injuries.

They argue only that despite the newspaper reports,

they did not know and could not have known as of this

date that the J.P. Morgan defendants had played a part

in producing their injuries. They are correct, but the

point is not whether they would have known that

defendants played a part; it is whether they knew

enough to suspect a violation that they could have

detected with due diligence or whether they had knowledge of facts that would have led to actual knowledge in
6 Nos. 04-1713, et al.

the exercise of reasonable diligence. It is clear that they

did. The articles did not say simply that Sumitomo

Corporation did its banking with defendants and that

defendants might suffer losses as a result of their

banking role; they said that the Commodities Futures

Trading Commission was investigating who might have

helped Yasuo Hamanaka arrange fictitious trades and

that defendants were among the institutions that took

an active part in those transactions. One does not have

to be a sophisticated corporation to infer a possible

connection between “who helped” and “the institutions

that took an active part in those transactions.”

Next, the court considered the plaintiffs’ argument that,

at least with respect to Morgan, the statute of limitations

was tolled on grounds of equitable estoppel or fraudulent

concealment. To support this point, plaintiffs alleged that

Morgan had concealed its involvement in the conspiracy in

several ways: by entering into confidentiality agreements in

the lawsuits and investigations with which it was involved;

by giving untruthful statements to the New York State

Banking Department and the New York Federal Reserve

Bank during their investigation; by allowing its head of

media relations in London to destroy a notebook containing

his notes of conversations with media contacts; and by

declining to give information to the London Metals Exchange about a customer of Morgan Guaranty Trust

Company. The court was unpersuaded. It found instead that

each one of these actions could be characterized only as a

denial of liability.

Even if that were not the case, the court found, the

plaintiffs acted too slowly in bringing their suit. It explained that by August 13, 1999, the date on which

Sumitomo’s complaint against Morgan was unsealed, the

plaintiffs “had the requisite factual support to sue defendants for violation of the antitrust laws,” a claim the court
Nos. 04-1713, et al. 7

noted that plaintiffs conceded. Relying on its previous

holding that the claim accrued on July 23, 1996, this meant

that plaintiffs still had eleven months after Sumitomo

revealed its complaint to file suit before the four-year

statute of limitations expired on July 23, 2000. Plaintiffs

filed this case on December 30, 2002, more than six and a

half years after the accrual—too late, in the district court’s

view.

Finally, the court concluded that the statute of limitations

was not tolled during the pendency of certain state antitrust

class actions that had been filed against Sumitomo and

Morgan. In order to benefit from the tolling rule for plaintiffs covered by a class action announced in the Supreme

Court’s decision in American Pipe & Constr. Co. v. Utah,

414 U.S. 538 (1974), the court ruled, identical legal theories

must be involved in both cases. Both the Asarco Group and

Southwire were unnamed class members in a class action

that had been filed in California state court on July 8, 1996,

Heliotrope General, Inc. v. Sumitomo Corp., No. 701679

(Cal. Super. Ct. 1996) (Heliotrope I). The class in Heliotrope

I was defined as businesses that “purchased copper-based

products and paid prices for such copper-based products

that were inflated due to the defendants’ manipulative and

unlawful actions.” On February 14, 2000, Morgan was

added as a defendant to the Heliotrope I litigation action. In

June 2000, the Heliotrope I litigation was abandoned, but

on June 5, 2000, a group of plaintiffs filed a new action,

Heliotrope General, Inc. v. Credit Lyonnais Rouse, Ltd., No.

749280 (Cal. Super. Ct. 2000) (Heliotrope II), that included Morgan as a defendant. The California Superior

Court granted class certification in Heliotrope II on January

22, 2003. All of the plaintiffs except for Southwire opted out

of the Heliotrope litigation on March 21, 2003. (Although

the court initially rejected plaintiff Asarco’s request for

exclusion, the court granted it on June 20, 2003.) Plaintiff
8 Nos. 04-1713, et al.

Southwire filed its opt-out request for Heliotrope II on

March 22, 2003.

If the time between the commencement of Heliotrope II

and the date when the various plaintiffs opted out of the

state class did not count against the four-year limitations

period, then the suit against Morgan filed at the end of

2002 was easily brought in time. The district court concluded that this time is excludable only if the American Pipe

rule makes it so. It then found that American Pipe did not

save the plaintiffs’ actions “[b]ecause the Heliotrope actions

did not involve the same causes of action as those in plaintiffs’ present case against defendants, plaintiffs may not

claim any tolling benefit from the Heliotrope class actions.”

Although the court also found that the plaintiffs could

benefit from tolling under American Pipe and Crown, Cork

& Seal Co. v. Parker, 462 U.S. 345 (1983), for the federal

antitrust class action filed against Morgan in Loeb Indus.,

Inc. v. J.P. Morgan & Co., No. 00-C-274-C (W.D. Wis. 2000)

(Loeb II), this time period was not great enough to make a

difference. The court calculated that Loeb II’s tolling benefit

ran from the day the complaint was filed on May 8, 2000,

until January 2, 2001, the day the district court dismissed

the action, for a total of seven months and 25 days. The

court rejected the plaintiffs’ contention that the period

lasted during the pendency of the earlier appeal to this

court that culminated in Loeb I.

Finally, the court declined to answer the question

whether the tolling agreements entered into by the defendants in the In re Sumitomo Copper Litigation, No. 96 Civ.

4584 (MP) (S.D.N.Y.), tolled the statute of limitations in

this case. Even if the agreements had that effect, they

would not have sufficed to save the plaintiffs’ claims from

dismissal, assuming the accuracy of the court’s choice of the

date of accrual and the unavailability of any other ground

for tolling.
Nos. 04-1713, et al. 9

II

We review a district court’s grant of summary judgment

de novo, taking all facts in the light most favorable to the

non-moving party. See, e.g., Moser v. Ind. Dep’t of Corr., 406

F.3d 895, 900 (7th Cir. 2005). An award of summary

judgment is proper when “there is no genuine issue as to

any material fact and that the moving party is entitled to a

judgment as a matter of law.” FED. R. CIV. P. 56(c); Celotex

Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Here, plaintiffs present three arguments for reversing the district

court: (1) material issues of fact exist on the question

whether their claims against Morgan accrued on July 23,

1996; (2) material issues of fact exist on the question

whether the statute was tolled by the doctrine of fraudulent

concealment; (3) even if their claims accrued on June 14,

1996 (for Southwire’s claims against Sumitomo and Global),

and July 23, 1996 (for all claims against Morgan), as the

district court held, the cases are timely because the statute

of limitations was tolled as a matter of law during the

pendency of the state court class actions. This opinion

addresses only the first two of these points in detail. Judges

Cudahy and Rovner have rejected the third argument, for

the reasons explained in Judge Cudahy’s separate opinion.

A. The Accrual Date of Plaintiffs’ Antitrust Injuries

The plaintiffs argue that the district court improperly

selected July 23, 1996, as the date on which their claims

accrued and contend instead that August 13, 1999, the date

on which Sumitomo’s complaint against Morgan

was unsealed, is the proper date. Plaintiffs further argue

that even if their actions accrued as early as 1996, they

should benefit from tolling under the doctrine of fraudulent

concealment because of Morgan’s efforts to hide its involvement with Sumitomo’s price-fixing. We first address the

question of accrual. Whether the district court selected the
10 Nos. 04-1713, et al.

proper accrual date depends on the application of the

discovery rule to these facts.

As an initial matter, plaintiffs’ antitrust claims are

subject to a four-year statute of limitations. 15 U.S.C. § 15b;

see also Zenith Radio Corp. v. Hazeltine Research, Inc., 401

U.S. 321, 338 (1971) (“The basic rule is that damages are

recoverable under the federal antitrust acts only if suit

therefor is ‘commenced within four years after the cause of

action accrued’. . . .” (quoting 15 U.S.C. § 15b)). Generally,

an antitrust “cause of action accrues and the statute begins

to run when a defendant commits an act that injures a

plaintiff’s business.” Zenith, 401 U.S. at 338. As in other

areas of the law, however, in the absence of a contrary

directive from Congress this rule is qualified by the discovery rule, which “postpones the beginning of the limitations

period from the date when the plaintiff is wronged to the

date when he discovers he has been injured.” See Cada v.

Baxter Healthcare Corp., 920 F.2d 446, 450 (7th Cir. 1990).

“This principle is based on the general rule that accrual

occurs when the plaintiff discovers that ‘he has been injured

and who caused the injury.’ ” Barry Aviation, Inc. v. Land

O’Lakes Mun. Airport Comm’n, 377 F.3d 682, 688 (7th Cir.

2004) (quoting United States v. Duke, 229 F.3d 627, 630 (7th

Cir. 2000) (emphasis in original)).

Plaintiffs discovered that they had suffered some kind

of injury on June 13, 1996, when Sumitomo announced that

it had incurred almost $1.8 billion in losses from its illegal

activities. At this point, the plaintiffs knew that their

businesses had been injured by Sumitomo’s actions, but

they did not know that Morgan might also be liable. As the

district court noted, however, several articles indicated that

Morgan had financed Sumitomo’s copper transactions. The

district court thought that the plaintiffs should have

suspected Morgan’s possible culpability by July 23, the date

when the Associated Press reported that Morgan and other

banks were under investigation by the Commodities
Nos. 04-1713, et al. 11

Futures Trading Commission (CFTC), because by this date,

“plaintiffs had enough information to trigger their obligation to make further inquiry.” The court concluded that

whether it applied the discovery rule to when the claim

accrued or the fraudulent concealment doctrine to toll the

statute of limitations, by July 23 the plaintiffs “knew

enough to suspect a violation that they could have detected

with due diligence.” Absent any alleged wrongdoing on

Morgan’s part, the court thought that the plaintiffs should

have known of Morgan’s liability too. 

The problem is that in making its determination, the

court never explained what facts the plaintiffs’ diligent

inquiries would have revealed. (Sumitomo, it should go

without saying, was in a different position; as a party to the

deals with Morgan, it had access to information that was

not accessible to outsiders.) The court cites several articles

that mentioned Morgan and its loans to Sumitomo in June

and July 1996, none of which indicated that Morgan’s

actions were unlawful or even that Morgan knew about

Sumitomo’s fraudulent transactions. Even the articles

published in the spring of 1997 reporting the federal

investigation of Morgan did not state that Morgan had been

charged with violating the law. For example, on April 3,

1997, The Wall Street Journal reported that state and

federal authorities reprimanded Morgan after their investigation of Morgan’s financing the trades of Yasuo

Hamanaka, Sumitomo’s key copper trader. The article

suggested that Morgan may have had knowledge of

Hamanaka’s purposes behind the loans and it referred to a

six-month federal investigation, but it stopped short

of saying that Morgan had been charged with violating

any laws.

Perhaps most significantly, as the district court noted in

its opinion, Morgan was not named in any copper litigation until February 2000, six months after Sumitomo
12 Nos. 04-1713, et al.

unsealed its complaint against Morgan. See R.W. Strang

Mechanical v. Sumitomo Corp., No. 701680 (Cal. Super. Ct.

1996) (complaint amended to add defendant Morgan on

February 14, 2000); Heliotrope I, No. 701679 (Cal. Super.

Ct. 1996) (complaint amended to add defendant Morgan on

February 14, 2000); Nat’l Metals, Inc. v. Sumitomo Corp.,

No. 734001 (Cal. Super. Ct. 1999) (complaint amended to

add defendant Morgan on February 14, 2000); Heliotrope II,

No. 749280 (Cal. Super. Ct. 2000) (complaint filed against

defendant Morgan on June 5, 2000); Loeb Indus., Inc. v. J.P.

Morgan & Co., No. 00-C-0274-C (W.D. Wis. 2000) (complaint filed on May 8, 2000); Ocean View Capital, Inc. v.

J.P. Morgan & Co., No. 00-CV-3756 (S.D.N.Y. 2000) (filed

May 17, 2000). The district court cited these cases in

support of its belief that plaintiffs could have filed their

cases before July 23, 2000, four years after the accrual date

the court selected. But if the soonest that the plaintiffs were

put even on inquiry notice about Morgan’s role was late

1999, that was when the four-year period began to run;

plaintiffs were not left facing only an equitable extension of

time dating from some earlier point.

Under these circumstances, we conclude that a dispute of

material fact exists regarding when a diligent inquiry

on the part of the plaintiffs would have revealed Morgan’s

involvement. The only information available in the public domain was insufficient to suggest activities on Morgan’s

part that went beyond the normal role of a financial

institution. The press had reported that Morgan was

financing some of Sumitomo’s trades; that it was engaged

in hedging deals in the copper market; that it may have

participated in loan agreements supporting the Hamanaka

trades; that it was trading in derivative contracts; and that

the CFTC was investigating someone. We do not see how

this amounts to indisputable evidence of inquiry notice that

Morgan had stepped over any legal lines.
Nos. 04-1713, et al. 13

B. Equitable Estoppel and Fraudulent Concealment

The facts taken in the light most favorable to the plaintiffs also support a finding that equitable estoppel should be

invoked to toll the statute of limitations. In their appeal,

plaintiffs allege that Morgan affirmatively acted to conceal

its involvement using a variety of mechanisms: confidentiality agreements; its separation agreement with Keith

Murphy, Morgan’s former head of its base metals desk,

prohibiting him from disclosing confidential business

information in exchange for $225,000; its media strategy;

the destruction of evidence; and the withholding of information or giving of false information to regulatory investigations.

“Equitable estoppel [in the statute of limitations context] suspends the running of the statute of limitations

during any period in which the defendant took active steps

to prevent the plaintiff from suing.” Barry Aviation, 377

F.3d at 689 (internal citation omitted). The typical example

of equitable estoppel is when a defendant “promis[es] the

plaintiff not to plead the statute of limitations pending

settlement talks.” Singletary v. Continental Ill. Nat’l Bank

and Trust Co. of Chicago, 9 F.3d 1236, 1241 (7th Cir. 1993).

Fraudulent concealment is a type of tolling within the

doctrine of equitable estoppel. Fraudulent concealment

“presupposes that the plaintiff has discovered, or, as

required by the discovery rule, should have discovered, that

the defendant injured him, and denotes efforts by

the defendant—above and beyond the wrongdoing upon

which the plaintiff’s claim is founded—to prevent the

plaintiff from suing in time.” Cada, 920 F.2d at 451. In

order for a plaintiff to benefit from tolling for fraudulent

concealment, he must show “that he neither knew nor, in

the exercise of due diligence, could reasonably have known

of the offense.” Klehr v. A.O. Smith Corp., 521 U.S. 179,

194-95 (1997) (holding that “reasonable diligence” was
14 Nos. 04-1713, et al.

required to invoke the doctrine of fraudulent concealment in

the context of civil RICO by analogy to antitrust cases).

The district court found that the plaintiffs could not

benefit from tolling on the ground of fraudulent concealment because “[t]o sustain such a claim at trial, plaintiffs

would have to prove that defendants took active steps to

prevent plaintiffs from suing before the statutory deadline.”

After reviewing considerable quantities of discovery

materials, plaintiffs have unearthed three incidents

that they contend add up to obstructionism sufficient to

entitle plaintiffs to claim equitable estoppel. Defendants’ managing director of global commodities made

an allegedly untruthful statement to examiners of the

Federal Reserve Bank and New York State Banking

Department that defendants had had no suspicion

about Hamanaka’s dealings and no concern that a

March 1996 trade with Sumitomo was unauthorized;

defendants’ London head of media relations destroyed

a notebook containing his notes of conversations with

media representatives; and J.P. Morgan Securities Ltd.,

an entity related to defendant J.P. Morgan Chase,

declined to give information to the London Metals

Exchange about a customer of defendant Morgan

Guaranty Trust Company. These three incidents add up

to nothing of significance.

In our view, this does not do justice to the facts the

plaintiffs have presented for purposes of the summary

judgment motion. Plaintiffs began by pointing out that

Morgan was not contesting the fact that it had engaged

in fraudulent concealment prior to June 17, 1996. Other

representative facts plaintiffs proffered included the

following: (1) Morgan provided false information to authorities, by telling them that Hamanaka’s trades were fully

authorized by Sumitomo’s top management when it knew

that they were not; (2) Morgan publicly offered innocent
Nos. 04-1713, et al. 15

alternative explanations to explain away events related to

the price-fixing conspiracy, knowing that they were misleading; (3) Morgan affirmatively instructed

other conspirators not to divulge the existence of the

conspiracy; and (4) in violation of Morgan’s record retention

policy, its Head of Media Relations in London destroyed the

notebooks in which he recorded information about his

contacts with the press. Most suspiciously, almost two years

after it fired Murphy, who had headed Morgan’s base

metals business for a time and who was at the heart of the

arrangements with Sumitomo, Morgan entered into an

agreement with him requiring that he not disclose any

information relating to the business and that he give

Morgan notice of and an opportunity to resist any subpoenas. Notably, the silence was not simply vis à vis the press;

it was directed toward official inquiries. In exchange for

these promises, Morgan made a generous special payment

of $225,000 to Murphy and “reinstated” options for approximately 7,000 shares of Morgan stock, which Murphy had

forfeited at the time of his forced resignation.

We certainly do not rule out the possibility that Morgan

may have explanations for its actions. That is not the point.

At the summary judgment stage, this evidence is enough to

show that material facts are in dispute as to whether

plaintiffs can benefit from tolling under fraudulent concealment. See, e.g., Morton’s Market, Inc. v. Gustafson’s Dairy,

Inc., 198 F.3d 823, 832-33 (11th Cir. 1999) (reversing a

district court’s grant of summary judgment for defendants

because material facts existed on plaintiffs’ claim regarding

fraudulent concealment). In Morton’s, the Eleventh Circuit

noted the “stringent” standard of review at summary

judgment for determining whether the defendants’ conduct

“prevented the plaintiff from discovering his claim prior to

the expiration of the limitations period.” Id. at 832. The

court stated that, “[i]t is not enough for summary judgment

to point to facts which might have caused a plaintiff to
16 Nos. 04-1713, et al.

inquire, or could have led to evidence supporting his claim.

A defendant who does this has succeeded in demonstrating

only that there is a jury question regarding the tolling of

the statute of limitations by fraudulent concealment. To

award summary judgment on such a showing is error.” Id.

at 832-33 (emphasis in original).

Similarly here, defendants answer the plaintiffs’ evidence

only with references to articles that reveal information

about Morgan’s loans to Sumitomo that, it contends, should

have prompted further inquiry. But this evidence does not,

by itself, erase the contrary evidence that the plaintiffs

have proffered. The doctrine of fraudulent concealment

protects “both the diligent and the non-diligent plaintiff . .

. from the expiration of claims the factual basis for which

was shrouded by the veil of fraudulent concealment.” Id. at

836. While denying liability or failure to cooperate is not

enough to invoke the doctrine of fraudulent concealment,

see Singletary, 9 F.3d at 1241, plaintiffs went far beyond

simple denials. We conclude that there are facts in dispute

regarding Morgan’s fraudulent concealment and on that

basis we reverse the district court’s summary judgment

decision in favor of Morgan.

C. Timeliness After Discovery

As we noted earlier, the district court found in the

alternative that the plaintiffs acted too slowly in bringing

their suit, regardless of questions of discovery or fraudulent

concealment. It was on August 13, 1999, that Sumitomo’s

complaint against Morgan was unsealed, and it cannot be

disputed that the revelation of the information in that

complaint gave the plaintiffs the requisite factual support

for an antitrust suit against Morgan. In fact, plaintiffs did

not file their action until December 30, 2002, more than

three years later.

Because the district court’s view of the equities may

have been affected by its conclusion that the correct accrual

date was really July 23, 1996, we would reverse and
Nos. 04-1713, et al. 17

remand for further consideration of this point even if our

only ground of disagreement related to the equitable

estoppel or fraudulent concealment ground. Here, in

addition, our holding (based of course on the summary

judgment record) that the plaintiffs could not reasonably

have discovered Morgan’s role as early as the district

court thought means that the court was not free to shorten

the four-year limitations period in this way. Under the

discovery rule, the statute does not begin running until

the plaintiff discovers that he has been injured and

who caused the injury. Here, the statute did not begin

running until August 13, 1999, and thus the plaintiffs

had until August 13, 2003, to file their action. That was

a deadline they easily met.

D. Tolling Based on Loeb I: Sumitomo, Global

Southwire hopes to save its claims against Sumitomo and

Global through the argument that the statute of limitations

was tolled during the pendency of the federal class action

filed in Loeb Indus., Inc. v. Sumitomo Corp., No. 99-C-377-C

(W.D. Wis. 1999). The defendants respond that Loeb I tolled

the statute of limitations only from the date when the

action was filed on June 8, 1999, until the district court

dismissed the action with prejudice on August 24, 2000. If

they are correct, then Southwire is out of luck. If, on the

other hand, the statute was tolled until September 20, 2002,

when this court handed down its Loeb decision, then

Southwire’s case can go forward.

The general rule is that the judgment of a district

court becomes effective and enforceable as soon as it is

entered; there is no suspended effect pending appeal unless

a stay is entered. There is no reason why the

class certification question should somehow be exempt from

this rule. Culver v. City of Milwaukee, 277 F.3d 908 (7th

Cir. 2002), holds that the statute of limitations be-
18 Nos. 04-1713, et al.

gins running again as soon as class certification is denied

or, as we added, as soon as a party opts out of a class. Id. at

914. At that point, the parties are on notice that they must

take steps to protect their rights or suffer the consequences.

This is particularly true now that FED. R. CIV. P. 23(f)

makes it possible for parties to seek an interlocutory appeal

of a class certification decision, but it was true as well

before the advent of Rule 23(f). Furthermore, this rule is

clear and easy to enforce. Southwire is therefore not

entitled to take advantage of tolling from Loeb I beyond the

date when the district court dismissed the case in its suit

against Sumitomo and Global.

III

In summary, we conclude that Morgan was not entitled to

summary judgment with respect to the claims filed by

plaintiffs Southwire and Asarco Group, because issues of

fact pertinent to the date by which the plaintiffs should

have discovered their claims and to the related questions of

equitable estoppel and fraudulent concealment remain. We

also conclude that the district court correctly granted

summary judgment in favor of defendants Sumitomo

and Global, because plaintiffs filed those claims too late.

Judges Cudahy and Rovner also reject plaintiffs’ contention

that the statute of limitations was tolled as a matter of law

during the pendency of the Heliotrope class actions, for

reasons explained in Judge Cudahy’s separate opinion.

Judge Wood dissents on this point alone. The judgment of

the district court is therefore AFFIRMED in part and REVERSED in part, and the case is REMANDED for further

proceedings consistent with this opinion. Costs are to be

taxed equally between Morgan, on the one hand, and the

appellants, on the other.
Nos. 04-1713, et al. 19

CUDAHY, Circuit Judge, for the panel and concurring

in Part II. The plaintiffs argue with respect to the Heliotrope California class action that membership in the

Heliotrope class should not only toll the statute of limitations with respect to individual state antitrust claims

but also the federal statute of limitations governing

claims under the Clayton Act. Not only is there no suggestion in American Pipe, 414 U.S. 538, or in Crown, Cork

& Seal, 462 U.S. 345, that these decisions construing

Federal Rule of Civil Procedure 23 have any direct application to parallel state procedures, but the policies

underlying American Pipe and like precedents simply do not

apply in the cross-jurisdictional context.

The essential rationale of American Pipe is that members

of a class whose claims are embodied in a class action should not be required by the exigencies of the statute of limitations to clutter the courts with duplicative

lawsuits as long as their claims are encompassed by the

class action. In other words, as long as they are in effect

passively tendering their claims through inclusion in the

class action, they should not be forced to proceed individually, whether by intervention or otherwise.

The situation contemplated by the plaintiffs here is,

however, quite different. Here plaintiffs have become

members of a class in a state class action but want the

federal statute of limitations governing a factually similar

federal claim to be tolled. But, in this situation the state

claimants are not being forced by the federal statute of

limitations to file duplicative claims since, in any event, it is

necessary at some point to file suit in federal court if the

plaintiff desires to invoke federal antitrust protection. This

procedural requirement is unaffected by the status of an

ongoing state class action.

Since filing in federal court is a prerequisite to pursuing a

federal remedy regardless of the state class action, there
20 Nos. 04-1713, et al.

will be no efficiency gain whether the federal filing is made

while the claimant is part of the state class action or later

(or never). However similar or dissimilar the function of

federal antitrust law may be with respect to state law, the

federal claim is part of a distinct body of law that must be

pursued in a wholly different court system. This fact cuts

decisively against the application of the policies of American

Pipe across jurisdictional lines to respond to state class

actions, even if some federal interest in such an application

could be divined.

Another way of approaching this problem is to recognize

that Rule 23 allows litigants to protect their rights

passively—to “sit on the sidelines,” so to speak—without

individually asserting their own claims in accordance

with the theory that someone else is making identical

claims on behalf of silent and absent class members. The

key difference between an ordinary Rule 23 situation

and the present case is that no one here is asserting a

federal claim for those sitting on the sidelines. No one

has filed a federal antitrust claim at all, and no one may

ever file a federal antitrust claim. Hence, tolling the federal

statute of limitations may be a futile gesture of benefit to no

one.

Judge Wood in dissent asserts that “different tribunals

that entertain fundamentally the same case should not

be hermetically sealed off one from the other.” Dissent

of Wood, J., at 31. But this rhetorical conclusion overlooks

the fact that, however similar the purposes of federal

and state litigation, they must still be maintained by filing complaints and pursuing remedies in different courts.

This fact may be decisive for procedural issues like the

one here. The issue before us is a federal issue to be decided

under federal law. If it were a state issue, there is no reason

to believe that California would purport to toll the limitation contained in the Clayton Act, no matter how similar a

Clayton Act claim might be to the claim under a California
Nos. 04-1713, et al. 21

1 If we understand Judge Wood’s invocation of Marrese v. Am.

Acad. of Ortho. Surgeons, 470 U.S. 373 (1985) and the point that

a state judgment might “in some circumstances have a preclusive effect” on a subsequent federal action, as to claim preclusion (as we note above), this is certainly not the case in California.

On the other hand, preclusion of federal issues by a prior state

judgment will certainly not be avoided by tolling the fed-

(continued...)

antitrust statute that was the subject of a state class action

(like Heliotrope). This conclusion is particularly inescapable

in light of California’s analogous refusal even to apply its

law of claim preclusion (res judicata) to federal antitrust

claims that are factually similar to state claims.

Under California preclusion law, in order for res judicata to apply to claims not raised in previous proceedings, the court rendering the prior judgment must have

jurisdiction to hear such claims. . . . Because federal

antitrust claims are within the exclusive jurisdiction of

the federal courts . . . [a] California court . . . would

have had no jurisdiction over . . . federal antitrust

claims. Therefore, applying California res judicata

principles, [a] prior California suit cannot preclude [the

similar] federal action.

Eichman v. Fotomat Corp., 759 F.2d 1434, 1437 (9th Cir.

1985) (citations omitted).

The reference by Judge Wood to issue preclusion as

somehow relevant to the tolling of the statute of limitations

is wide of the mark. Here, the state claims have never been

fully litigated, and the issues eligible to be precluded are

therefore unknown. The fact that some issues in the federal

courts may someday be precluded by state decisions is not

a good reason to delay the corresponding federal actions by

tolling the statute of limitations (thereby arguably increasing the chance of preclusion).1

 Judge Wood also argues that
22 Nos. 04-1713, et al.

(...continued)

eral statute of limitations and delaying the federal lawsuit. As

to the possibility that a federal suit will never be brought, the

statute of limitations applicable to such a suit is, of course,

irrelevant in the circumstances. But if the problem is that

preclusion principles may ultimately provide an affirmative

defense to a federal suit, this is certainly not a reason to toll the

federal statute of limitations and delay the filing of a federal

action.

somehow fairness, efficiency and like values will be advanced if a state antitrust class action can effect a tolling of

the federal statute of limitations applicable to the Clayton

Act. As we have pointed out, this is simply not the case. If

an unnamed member of the state class wishes also to sue

under the Clayton Act, the member must at some point

bring a suit in federal court. If the requirements of the

statute of limitations result in the federal suit’s being

brought while the state class action is pending, there is

no inefficiency or unfairness. The plaintiff has simply

invoked an additional statutory right at an appropriate

time.

It merely confuses the issue to suggest that the Class

Action Fairness Act (CAFA), Pub. L. 109-2, 119 Stat. 4

(2005), has anything to do with the issue. If a state class

action is removed to federal court—diversity having been

found—the substantive law involved is still state law.

Claims under an analogous federal statute have not

been invoked, and they are not implicated. Similarly,

Johnson v. Railway Express, Inc., 421 U.S. 454 (1975),

relied on by the district court, has been properly invoked

because it illustrates the principle that there must be

identity of claims for tolling to be operative. It would appear

a fortiori that, if the second claim is not only under a

different statute but under a statute in another jurisdiction
Nos. 04-1713, et al. 23

2 This, of course, is not to say that a state statute of limitations implicated by a federal class action might not be tolled under

American Pipe. See, e.g., May v. AC&S, 812 F. Supp. 934, 938

(E.D. Mo. 1993). That, of course, is not the issue here. The

question here is claimed to be whether the limitations attaching to

a federal statute may be tolled to improve the efficiency of a state

class action. As we have noted, there is no efficiency gain here and

no federal interest in tolling.

(federal) and invokable only in a different court system

(federal), tolling would not be appropriate.

Cullen v. Margiotta, 811 F.2d 698 (2d Cir. 1987), cited by

Judge Wood, contains dicta that are clearly distinguishable

and, in addition, have provoked a telling dissent. First, in

Cullen, the claims under RICO and 42 U.S.C. § 1983 were

subject to the three-year limitations period imposed by state

law. The court noted that when a federal court looks to

state law to determine the most appropriate statute

of limitations, it must also, so long as federal policy is not

offended, apply the state’s rules as to the tolling of the

statute. This situation, then, contemplates the involvement

of state law in a way that the Clayton Act—with its own

statute of limitations and exclusive federal jurisdiction—does not. State courts have the power to adjudicate

both RICO and § 1983 cases along with federal courts; only

federal courts are competent to hear Clayton Act cases.

Thus, it is more palatable to permit state litigation to

toll state-based statutes of limitation with respect to claims

that could actually be adjudicated in state courts.2

 Here,

however, Judge Wood would allow an action in a jurisdictionally incompetent tribunal to toll the limitation for a

lawsuit that it could never hear.

Further, Judge Meskill’s partial dissent points out the

pitfalls in pushing American Pipe beyond its own rationale.

He argued that the majority had broadened the American

Pipe rule to an unwise extent, quoting Justice Powell’s
24 Nos. 04-1713, et al.

concurrence in Crown, Cork & Seal that “[t]he tolling rule

of American Pipe is a generous one, inviting abuse.” Cullen,

811 F.2d at 736 (Meskill, J., dissenting) (quoting Crown,

Cork & Seal, 462 U.S. at 354 (Powell, J., concurring)). While

California’s antitrust statute might be “similar” to the

Clayton Act, mere similarity is a murky standard for a

matter as needful of certainty as the statute of limitations.

Nor are our conclusions undermined by the repeated

assertion by Judge Wood that a major purpose of a statute of limitations is “to promote justice by preventing

surprises through the revival of claims that have been

allowed to slumber until evidence has been lost, memories

have faded, and witnesses have disappeared.” Order of R.R.

Tel. v. Ry. Express Agency, Inc., 321 U.S. 342, 348-49 (1944).

Judge Wood claims the bringing of a state class action

asserting a state claim that is similar to a federal claim

puts defendants on notice that they might be sued federally

and leads to the preservation of evidence and memories.

This might well be substantially correct, but notice alone is

certainly not enough to toll the statute of limitations. A

mere announcement of an intention to sue puts defendants

on notice. No one contends, however, that this simple notice

is sufficient to toll the statute. If notice were enough, there

would be no reason to resume the running of the statute

when a plaintiff opts out of the class or is otherwise removed from it. After all, opting out of the class does not

withdraw the notice that has been given by filing the class

action. American Pipe may claim the additional benefit from

bringing a class action of notice to the defendant, but the

driving force in that opinion is the gain to an efficient Rule

23 procedure of tolling the statute.

Functional equivalence, like simple notice, is not enough

to trigger tolling. If functional equivalence were enough,

then it ought to apply to individual claims as well, which

certainly is not the law. For example, if multiple plaintiffs filed a joint suit against a defendant in state court and
Nos. 04-1713, et al. 25

one of those plaintiffs immediately dropped out, Judge

Wood’s functional equivalence rationale would seemingly

toll the statute of limitations and permit that plaintiff

to file her own “similar” lawsuit in federal court well beyond

the normal statute of limitations. Since that plaintiff was

originally part of the state lawsuit, the defendant plainly

had notice of that plaintiff’s “similar” claim. But notice is

not enough; that plaintiff needs Rule 23 to protect her

rights as a passive participant. We find the proposition that

a defendant in state court can be on adequate notice that

someday—two, five, ten or even more years down the

road—a plaintiff might bring a functionally equivalent but

not identical claim in federal court difficult to accept.

It should finally be noted that our conclusion supports one

of the main purposes of the statute of limitations that Judge

Wood identifies—to allow a defendant to be free of stale

claims in due time. For all these reasons, the plaintiffs’

participation in Heliotrope should have no effect on tolling

the statute of limitations applicable to the Clayton Act.

On the other issue of when the plaintiffs’ claims accrued,

I concur, although I have some reservations, with the

majority. The majority concedes that, by July 23, 1996, the

plaintiffs knew, among other things, that Morgan and other

banks were under investigation by the Commodities

Futures Trading Commission. The district court believed that the plaintiffs at that time “knew enough to

suspect a violation that they could have detected with due

diligence.” The majority, however, is doubtful that plaintiffs’

diligent inquiries would have uncovered enough information

to support a suit. Considering plaintiffs’ highly expert,

knowledgeable and well-compensated attorneys, I have

somewhat less difficulty in postulating their capacity to

uncover enough incriminating facts. There may be enough

doubt here, however, to support the majority’s conclusion.
26 Nos. 04-1713, et al.

On the issue of equitable estoppel and fraudulent concealment, I have similar reservations, but, again, there may be

a sufficient question to deny summary judgment. Hence, I

concur in the opinion authored by Judge Wood to the extent

that it speaks for a majority and in the judgment which it

supports but rely on my own opinion joined by Judge

Rovner with respect to the Heliotrope issue.

WOOD, Circuit Judge, dissenting in part. Unlike my

colleagues, who conclude that a state-court class action like

Heliotrope cannot, as a matter of law, have an effect on the

statute of limitations applicable to the federal antitrust

class action here, I conclude that a federal court is both

entitled and obliged to take into account related activities

in a state court when it decides whether a federal class

action can go forward. My principal disagreement with the

majority’s tolling analysis is that it reads as if Marrese v.

Am. Acad. of Ortho. Surgeons, 470 U.S. 373, 380 (1985), in

which the Supreme Court stated that “a state court judgment may in some circumstances have preclusive effect in

a subsequent action within the exclusive jurisdiction of the

federal courts,” were never decided. Because of Marrese,

there will be a significant number of cases in which a state

antitrust claimant will not have the option, as the majority

puts it, of “at some point [ ] fil[ing] suit in federal court . . .

to invoke federal antitrust protection.” Opinion of Cudahy,

J., at 20. Instead, because of the operation of 28 U.S.C.

§ 1738, the claimant will have to be content with the way

that the state courts protected the interests embodied in the

federal antitrust laws. It is not open to this court to secondguess the wisdom of the holding of Marrese; instead, we

must base our interpretation of other parts of federal law,
Nos. 04-1713, et al. 27

including the class action rules and tolling principles,

on a realistic appreciation of the degree of interdependence between state and federal antitrust claims that

Marrese decreed.

The degree of weight any particular state court action

must be given in a later federal case will vary, of course,

depending on how related it is factually and legally to

the federal litigation—there will be a potential range

spanning from no weight at all, for wholly unrelated suits,

to full-blown claim preclusion, under the principles articulated in Marrese. In the present case, the close identity

between the facts and legal principles governing the state

and federal cases are enough to require tolling the statute

of limitations for the persons who were unnamed class

members in the California suit. An examination of the

pleadings in the Heliotrope litigation reveals that it covers

exactly the same matters that the present suit involves. As

unnamed members of the Heliotrope class, the plaintiffs

here had no ability to control the course of that litigation.

Moreover, had plaintiffs stayed in the Heliotrope litigation

and the court had finally resolved such critical questions as

relevant market and effect on competition, they would

probably have faced issue preclusion in any subsequent

effort to invoke the federal antitrust laws. Under those

circumstances, I would find that the American Pipe tolling

rule applies and I would thus conclude that the plaintiffs’

claims against Morgan are entitled to go forward without

further fact-finding. Even with the benefit of class action

tolling, however, I would find that Southwire’s claims

against Sumitomo and Global were time-barred.

I

I believe that it is common ground that if the plaintiffs are entitled to benefit from tolling during the Heliotrope litigation and the tolling period lasted long enough,
28 Nos. 04-1713, et al.

their claims against Morgan can proceed. I begin, therefore,

with a discussion of the legal principles that govern and

then turn to the application of those principles to the

plaintiffs’ case. 

A. American Pipe and Tolling

The question for this part of the case is whether the fouryear statute of limitations in the Clayton Act should have

been tolled during the pendency of the state antitrust

action. Although federal courts have an obligation to respect

state court proceedings—one that finds expression in

federal statutes such as the Full Faith and Credit Act, 28

U.S.C. § 1738, and the Anti-Injunction Act, 28 U.S.C. §

2283—our primary duty here is to give proper scope to both

the Clayton Act, 15 U.S.C. § 15b (four-year statute of

limitations), and FED. R. CIV. P. 23. In my view, there is no

per se rule that bars a federal court from tolling the Clayton

Act’s statute of limitations for litigants who earlier were

unnamed members in closely related state court class

litigation. Whether tolling is appropriate should depend

upon both the factual and legal overlap between the two

actions. If the earlier state court class action arises out of

the same transaction or occurrence as the later federal class

action, and the parties and claims are functionally identical,

as I believe they are here, I would find that the federal

interest in making a forum available to the unnamed

members of the earlier class who have allegedly suffered

from violations of the antitrust laws is strong enough to call

for tolling. 

My conclusion is consistent with the purpose that statutes

of limitations are designed to serve. Justice Jackson

summarized this purpose with characteristic eloquence in

Order of Railroad Telegraphers v. Railway Express Agency,

Inc., 321 U.S. 342 (1944):
Nos. 04-1713, et al. 29

Statutes of limitation, like the equitable doctrine of

laches, in their conclusive effects are designed to

promote justice by preventing surprises through the

revival of claims that have been allowed to slumber

until evidence has been lost, memories have faded,

and witnesses have disappeared. The theory is that

even if one has a just claim it is unjust not to put the

adversary on notice to defend within the period of

limitation and that the right to be free of stale claims in

time comes to prevail over the right to prosecute them.

Id. at 348-49. In American Pipe & Constr. Co. v. Utah, 414

U.S. 538 (1974), the Court observed that these goals are

satisfied in the class action setting when the named

plaintiff brings a putative class action and alerts the

defendants “not only of the substantive claims being

brought against them, but also of the number and generic

identities of the potential plaintiffs who may participate in

the judgment.” Id. at 555.

The Supreme Court has held that the same law should

govern both a statute of limitations and the tolling principles that go along with it. See, e.g., Board of Regents v.

Tomanio, 446 U.S. 478, 485 (1980). Thus, in Tomanio, as

well as in Chardon v. Fumero Soto, 462 U.S. 650, 662

(1983), both cases in which the federal courts were borrowing an analogous state statute of limitations for an

action under 42 U.S.C. § 1983, the Court held that the state

tolling rules had to be applied. This was so even though in

Chardon the result, consistent with governing Puerto Rican

law, was that the statute of limitations began running anew

after class certification was denied in the first suit, rather

than simply continuing after suspension. The Court acknowledged that American Pipe had required only

suspensive effect, but it distinguished American Pipe on the

ground that the antitrust case there was governed by a

federal statute of limitations provided by the Clayton Act.
30 Nos. 04-1713, et al.

These cases suggest that here, where the question is

whether to toll the Clayton Act’s limitations period, the

court should apply federal law to the issue rather than

California law. (In the present case, as it happens, there

is little difference between the federal and the state

tolling rules. The California Supreme Court follows American Pipe when it serves the twin purposes that the court

has recognized for that case’s tolling rule—efficiency of the

litigation process and protection of the defendant through

adequate notice. Jolly v. Eli Lilly & Co., 751 P.2d 923, 934-

35 (Cal. 1988).) Federal courts have a broad interest

in litigation efficiency even when an earlier lawsuit

occurs in the courts of a state or even those of a foreign

country. Indeed, both the federal law governing recognition and enforcement of foreign judgments and the law of

many states presently take the position that foreign

judgments should be recognized and enforced even if the

issuing court would not give similar treatment to a U.S.

judgment. See, e.g., Bank of Montreal v. Kough, 612 F.2d

467 (9th Cir. 1980); Somportex Ltd. v. Philadelphia Chewing Gum Corp., 453 F.2d 435 (3d Cir. 1971); Uniform

Foreign Money Judgments Recognition Act § 4 (not listing

lack of reciprocity as a permissible ground for non-recognition); RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW

OF THE UNITED STATES §§ 481-82 (1987). To the extent

that courts and legislatures have eschewed a reciprocity

rule, they are making the point that interests in both

efficiency and fairness operate across judicial systems;

different tribunals that entertain fundamentally the

same case should not be hermetically sealed off one from

the other. 

A look at the Heliotrope litigation reveals that all relevant

interests would be served here by tolling: efficiency, fairness

to the unnamed plaintiff class members, and protection of

the defendant through adequate notice. The claims in

Heliotrope are functionally the same as those in the federal

case, and the defendants were fully on notice of the alleged
Nos. 04-1713, et al. 31

misconduct of which they were accused. There is a separate

question whether individuals who opt out of a certified class

ought to be able to take advantage of tolling principles, but

I am satisfied, based on the Supreme Court’s decisions in

Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 351-52

(1983), and Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 176

n.13 (1974), that this too is appropriate, on the condition

that the statute begins running again as of the date the optout becomes effective. (California would do the same thing.

See San Francisco Unified Sch. Dist. v. W.R. Grace & Co.-

Connecticut, 44 Cal. Rptr.2d 305, 318 (Cal. Ct. App. 1995).)

Otherwise, parties who are swept into a class action by a

self-designated class representative and who later assert

their right to opt out will essentially be forced to remain

in the class for reasons relating to limitations periods,

rather than because they are satisfied with the representation they are receiving.

B. Heliotrope Class Actions

The district court found significance for tolling purposes in the fact that the Heliotrope class action was not

based on the federal antitrust laws. Indeed it was not,

because it could not have been. The Supreme Court has long

understood the antitrust laws as conferring exclusive jurisdiction on the federal courts to adjudicate federal antitrust claims. See Gen. Inv. Co. v. Lake Shore &

Mich. S. Ry. Co., 260 U.S. 261, 287 (1922). But the plaintiffs’ claims were brought under California’s Cartwright Act

(its state antitrust law), Cal. Bus. & Prof. Code §§ 16720-

16770, and other states’ antitrust laws. The first question

thus should be whether it is enough to show as a matter of

substance that different statutes underlay the two claims in

order to defeat tolling under American Pipe.

It is helpful in this connection to recall the background of

the American Pipe decision. There, the Supreme Court was
32 Nos. 04-1713, et al.

faced with an antitrust action initially brought by the State

of Utah as a class action. After transfer to another district

under the multidistrict litigation procedures, the transferee

judge granted the defendants’ motion to deny class certification. Eight days later, many of the unnamed members of

the class moved to intervene. The district court denied that

motion, finding that the four-year statute of limitations had

run with respect to their claims, and that it had not been

tolled during the pendency of the requested class action.

The court of appeals reversed, and the Supreme Court

upheld its decision, stating that “the commencement of a

class action suspends the applicable statute of limitations

as to all asserted members of the class who would have

been parties had the suit been permitted to continue as

a class action.” 414 U.S. at 554.

To hold otherwise, the Court had explained earlier,

would frustrate the principal function of a class suit,

because then the sole means by which members of

the class could assure their participation in the judgment if notice of the class suit did not reach them until

after the running of the limitation period would be

to file earlier individual motions to join or intervene

as parties—precisely the multiplicity of activity

which Rule 23 was designed to avoid in those cases

where a class action is found superior to other available

methods for the fair and efficient adjudication of the

controversy.

Id. at 551 (internal quotation marks omitted). The Court

noted that this rule was also consistent with the purpose of

ensuring that defendants were protected from claims

by plaintiffs who have “slept on [their] rights.” Id. at 554. In

Crown, the Supreme Court extended American Pipe’s tolling

rule to situations where the class action has been dismissed

and those who would have been class members commence
Nos. 04-1713, et al. 33

an independent action instead of intervening. 462 U.S. at

350-51.

The American Pipe rule cannot be divorced from the class

action context. In the case of ordinary litigation, in which A,

B, and C file a lawsuit against X in state court, each of

these plaintiffs is responsible—and knows that she is

responsible—for protecting her own interests. Thus, if C

immediately dropped out of the original lawsuit and failed

to file a related action in federal court until after the

expiration of the statute of limitations, she would be out of

luck. Compare Federated Dep’t Stores, Inc. v. Moitie, 452

U.S. 394 (1981) (holding that nonappealing plaintiffs could

not avoid dismissal on res judicata grounds of new lawsuits

raising essentially the same claims under federal and state

antitrust law, even though appealing co-plaintiffs won a

reversal on appeal). With either a federal or state class

action, in contrast, the unnamed class members do not

enjoy full party rights during the course of the litigation.

See, e.g., Devlin v. Scardelletti, 536 U.S. 1, 10-11 (2002)

(unnamed class members are “parties” for purposes of

tolling the statute of limitations; are not “parties” for

purposes of defeating complete diversity; are “parties” for

purposes of being bound by settlement); Earley v. Superior

Court, 95 Cal. Rptr. 2d 57, 66 (Cal. App. Ct. 2000) (“[t]he

structure of the class action does not allow absent class

members to become active parties”); Shapell Indus., Inc. v.

Superior Court, 34 Cal. Rptr. 3d 149, 155 (Cal. App. Ct.

2005) (“California courts recognize and preserve the rights

of absentee class members [ ] even before the issue of

certification has been determined.”). Because there is no

pertinent distinction between the way that California treats

class actions and the way federal Rule 23 does, the fact that

the first class action in this case happened to be in California is not enough to defeat tolling here. 

In fact, although the Supreme Court has had no occasion

to discuss the situation presented in this case, where the
34 Nos. 04-1713, et al.

first class action is in state court and the later individual

action is in federal court, I see no principled way to distinguish the two scenarios. For the reasons I have already

explained, the federal courts are not indifferent to the

existence of related litigation in state courts. To the contrary, as the recent passage of the Class Action Fairness Act

(CAFA), Pub. L. 109-2, 119 Stat. 4 (2005), illustrates,

federal and state class actions are becoming

more intertwined by the day. CAFA is designed to facilitate

the removal of state-law based class actions filed in state

courts to federal court, by permitting such removal whenever minimal diversity and special amount in controversy

rules are satisfied. Once in federal court, of course, federal

procedural rules (including Rule 23) will govern. See Hanna

v. Plumer, 380 U.S. 460 (1965). As a result of CAFA, federal

courts will inevitably be called upon to interpret and apply

state antitrust laws with increased frequency. The effect of

the federal court’s judgment will be a matter of federal

common law, in accordance with the Supreme Court’s

holding in Semtek Int’l. Inc. v. Lockheed Martin Corp., 531

U.S. 497, 508 (2001). In general, the federal rule will be one

borrowed from the state in which the federal court is

sitting, unless that state law is “incompatible with federal

interests.” Id. at 509.

The key question, once we know that we are dealing

with unnamed members of an earlier putative class, ought

to be how closely the two cases are related. As a matter

of substance, it is plain in the case before us that the

California suit and the current suit cover the same ground.

The Heliotrope litigation involved the same facts, evidence,

and witnesses as the present action. The two lawsuits

also involve virtually identical legal claims, albeit with

different statutory labels. The California Supreme Court

recognized in Aguilar v. Atlantic Richfield Co., 24 P.3d 493

(Cal. 2001), that “section 1 of the Cartwright Act . . . like its

Sherman Act analogue, makes a conspiracy among competi-
Nos. 04-1713, et al. 35

tors to restrict output and/or raise prices unlawful per se

without regard to any of its effects.” Id. at 511. Indeed, in

Oakland-Alameda County Builders’ Exchange v. F.P.

Lathrop Constr. Co., 482 P.2d 226 (Cal. 1971), the state

supreme court went so far as to hold that “[b]ecause the

Cartwright Act is patterned after the federal Sherman Act

and both have their roots in the common law, federal cases

interpreting the Sherman Act are applicable in construing

the Cartwright Act.” Id. at 231 n.3.

It is also worth reiterating that had these individual

plaintiffs remained members of the Heliotrope class, issuepreclusive effect would probably have arisen from the

state litigation. Cf. U.S. Gypsum Co. v. Indiana Gas Co.,

350 F.3d 623, 628-29 (7th Cir. 2003) (explaining that

Indiana state court ruling could have issue-preclusive effect

on aspects of Sherman Act claim). Marrese instructs that

the preclusion rules of California would govern. 470 U.S. at

375, relying on 28 U.S.C. § 1738. Even though it appears

that a California court’s ruling in a Cartwright Act case will

not have claim-preclusive effects in a later Sherman Act

claim, see Freeman v. San Diego Ass’n of Realtors, 322 F.3d

1133, 1142 n.8 (9th Cir. 2003), because California does not

apply res judicata to claims that the first forum was

incompetent to hear, issue preclusion is another matter.

Key questions such as the definition of relevant market, the

competitive effect of restraints in that market, and antitrust

injury to the plaintiffs would have been resolved in the

state litigation, as long as California’s other criteria for

issue preclusion were satisfied. (California, like practically

every state, has a five-part test for issue preclusion: (1)

identity of issue, (2) actual litigation in prior proceeding, (3)

necessarily decided, (4) final and on the merits, and (5)

party against whom preclusion is sought must be same as,

or in privity with, party to former proceeding. See

Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal

Cruelty USA, Inc., 29 Cal. Rptr. 3d 521, 536 (Cal. Ct. App.
36 Nos. 04-1713, et al.

2005), quoting Lucido v. Superior Court, 795 P.2d 1223,

1225 (Cal. 1990).) Marrese is not narrowly limited to

questions of claim preclusion (nor, for that matter, is §

1738), see, e.g., Jaskolski v. Daniels, 427 F.3d 456, 460-61

(7th Cir. 2005); its underlying message is that the state and

federal antitrust laws are hardly strangers. If key findings

in a state antitrust action will have issue-preclusive effect

on a later federal antitrust claim, and those findings as a

practical matter will dispose of the federal case, then the

unnamed members of a class in the state court risk losing

exactly the same rights that unnamed members of a federal

class would stand to lose. The distinction between issue and

claim preclusion, at least in instances like this one, is more

formal than real. 

I recognize, of course, that the policies behind statutes of

limitations and res judicata differ in some respects. Statutes of limitations are concerned with the balance between

the defendant’s interest in notice and repose and the

plaintiff’s interest in vindicating her rights. In contrast,

rules of res judicata and collateral estoppel (or if one

prefers, claim and issue preclusion) are primarily concerned

with putting an end to litigation. See, e.g., David P. Currie,

Res Judicata: The Neglected Defense, 45 U. CHI. L. REV. 317,

325 (1977) (quoting RESTATEMENT (SECOND) OF JUDGMENTS

§ 1 cmt. a (1942)). This interest in finality comes from the

need to avoid waste of judicial resources (including the

recognition that a person is entitled to only one full and fair

adjudication of a claim), respect for the judgment of the first

court, and the need to avoid harassment through repeated

lawsuits. See generally Allan D. Vestal, Rationale of

Preclusion, 9 ST. LOUIS U. L.J. 29 (1964). The common

concern with efficiency and the right to a meaningful (but

singular) opportunity to present one’s claim to a court

supports the application of the American Pipe rule.

Tolling here would recognize the near-identity of

claims and transactions and at the same time further the
Nos. 04-1713, et al. 37

goals of FED. R. CIV. P. 23 to promote the fair and efficient

adjudication of a controversy. As the Second Circuit explained, “limiting American Pipe tolling to the identical

‘causes of action’ asserted in the initial class action would

encourage and require absent class members to file protective motions to intervene and assert their new legal theories

prior to class certification, thereby producing the very

results the New York courts seek to prevent by such tolling,

[ ] court congestion, wasted paperwork and expense.” Cullen

v. Margiotta, 811 F.2d 698, 721 (2d Cir. 1987) (internal

quotation marks omitted), overruled on other grounds,

Agency Holding Corp. v. Malley-Duff & Assocs. Inc., 483

U.S. 143 (1987). Some of that protective litigation could

easily end up in federal court either as a federal claim or as

a state law claim based on diversity jurisdiction—a possibility that underscores further the federal interest in what

goes on during the state court class action.

I am not persuaded, as the district court was, that

Johnson v. Railway Express Agency, Inc., 421 U.S. 454

(1975), requires a different result. Johnson involved the

question whether the filing of a charge of employment

discrimination with the EEOC for purposes of a Title VII

claim had the effect of tolling the statute of limitations for a

suit based on the same facts brought under 42 U.S.C.

§ 1981. The Supreme Court found that § 1981 and Title

VII were “separate, distinct, and independent” avenues of

relief, 421 U.S. at 461, and that the Title VII administrative

filing did not toll the relevant limitations period for a § 1981

action (at that time, a period determined by borrowing from

state law). The Court rejected the plaintiff’s effort to rely on

American Pipe to support tolling, commenting generally

that in American Pipe there was “a substantial body of

relevant federal procedural law”— presumably referring to

Rule 23—that guided the decision. 421 U.S. at 466. Thus,

both because Johnson did not involve a class action and
38 Nos. 04-1713, et al.

because it involved distinct legal claims, it does not preclude tolling in this case. 

II

The question remains how much time the plaintiffs have

gained as a result of Heliotrope and which defendants the

tolling affects. I address Morgan’s situation first.

A. Application of Tolling Rules to Morgan

The Asarco Group argues that it is entitled to have the

benefit of the period from the time when Morgan was added

as defendant in February 2000 until the Asarco Group

opted out of the Heliotrope II litigation on March 21, 2003.

Southwire asserts that it too should benefit from tolling

during the Heliotrope litigation against Morgan (as well as

against Sumitomo and Global, whose position I address in

a moment). Southwire filed its federal antitrust case on

December 30, 2002, and it opted out of the Heliotrope

litigation on March 22, 2003 (only one day after the Asarco

Group did).

This court previously has held that “filing of a class action

suit tolls the statute of limitations for all the members of

the class, but when the suit is dismissed without prejudice

or when class certification is denied the statute resumes

running for the class members.” Culver v. City of Milwaukee, 277 F.3d 908, 914 (7th Cir. 2002) (citations omitted);

see also Crown, 462 U.S. at 354. Thus, when a court denies

certification or dismisses an action, the tolling benefit

ceases. Logically, the tolling benefit must also cease when

the plaintiff opts out of the class and thereby forfeits its

class membership. In this case, the California Superior

Court ordered certification of the Heliotrope II class on
Nos. 04-1713, et al. 39

January 22, 2003, allowing the state antitrust claims

against Morgan to go forward. Both the Asarco Group and

Southwire were members of the Heliotrope II class, until

they filed their opt-out requests on March 21 and 22, 2003,

respectively. At that point, they communicated both to the

court and to the defendants that they no longer intended to

rely on the Heliotrope litigation to press their claims. As of

March 21 and 22, therefore, both sets of plaintiffs ceased to

benefit from the Heliotrope II litigation.

Although the majority has concluded that disputed

questions of fact make summary judgment inappropriate for

the claims against Morgan, the availability of class action

tolling is important for the plaintiffs’ claims against it. If

accepted, tolling would eliminate the need to resolve those

factual issues with respect to Morgan. Starting with July

23, 1996, which is the point of reference the district court

used, approximately three years and six and a half months

elapsed until Morgan was first added to Heliotrope I on

February 14, 2000. With only a couple of days’ slippage

after the early June end of Heliotrope I, Heliotrope II took

over on June 5, 2000. Even if the statute were running

between July 23, 1996, and February 14, 2000, I would find

that it was tolled during the period from February 14, 2000,

to March 21, 2003, or for three years and 35 days (for

Southwire, three years and 36 days). After March 21, 2003,

plaintiffs therefore had approximately five and a half

months left in which to file their actions against Morgan.

They in fact filed these claims on June 13, 2003, a little less

than three months after the statute of limitations restarted.

Plaintiff Superior filed its action about a month later, on

July 11, 2003. Both of these filing dates were well within

the remaining five and a half month period available to the

plaintiffs. This result would be no different if one were to

choose the earlier date of June 14, 1996, as the date when

the plaintiffs realized generically that they had been
40 Nos. 04-1713, et al.

injured, even though at that point they may not have known

about Morgan’s role in the injury.

Although Southwire is in a somewhat different position

than the Asarco Group with respect to the timing of the new

claim, nothing of consequence follows from this. Southwire

indicated that it no longer intended to rely on the

Heliotrope II class action to press its claims against Morgan

when it filed its federal action against Morgan on December

30, 2002. Nevertheless, Southwire also had the same five

and a half months from the time it was no longer involved

in the Heliotrope II proceeding, because the tolling period

began for it on February 14, 2000, even though it ended

earlier. Southwire obviously filed its suit against Morgan

within five months of December 30, 2002, because it filed on

that very day.

B. Application of Tolling Rules to Sumitomo and Global

The situation of defendants Sumitomo and Global is

different. Although Southwire also claims that the Heliotrope litigation operated to toll its claims against these

two defendants, I conclude otherwise. The district court

held that these claims accrued on June 14, 1996. The

California Superior Court denied certification of the

proposed Heliotrope I class on October 10, 1997, thus

terminating the tolling benefit for the class action against

Sumitomo. See Culver, 277 F.3d at 914. Even though the

court’s October 10, 1997, order was without prejudice and it

later certified a class for settlement purposes, these circumstances do not support the conclusion that the

case remained a putative class action along the lines

envisioned by American Pipe and Crown. Clear rules are the

best ones for the litigation process. Only confusion could

result from a rule requiring every litigant to figure out

whether a denial of certification was really a denial, or just

a meaningless interim step. For these reasons, I would find
Nos. 04-1713, et al. 41

1 A detailed breakdown of the tolling process for Southwire’s case

may help. Starting with June 14, 1996, Southwire used up 24 days

before Heliotrope I began on July 8, 1996. It then used up another

606 days between the October 10, 1997, denial of class certification and June 8, 1999, when the Loeb I litigation against

Sumitomo and Global began. Another 858 days elapsed from

the August 24, 2000, rejection of the Loeb I class until it filed

suit on December 30, 2002. The total number of days was 1488, in

excess of the 1461 days in four years.

USCA-02-C-0072—2-6-06

that Southwire’s claims against Sumitomo and Global were

untimely.1

For these reasons, I respectfully dissent in part from the

majority’s judgment.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit