Opinion ID: 2193202
Heading Depth: 2
Heading Rank: 4

Heading: Chardon v. Soto and the Tolling Effect of American Pipe Class Action Tolling

Text: Petitioners' final argument on the issue of class action tolling is that, even if we were to adopt American Pipe class action tolling, the tolling effect of the American Pipe class action tolling rule, as articulated by the Supreme Court in Chardon, is such that respondents' claims would not be rendered timely by the rule. Petitioners' argument rests on a misreading of Chardon. In Chardon, the Court had to determine the tolling effect of a putative class action filed in the United States District Court for Puerto Rico under 42 U.S.C. § 1983. See Chardon, 462 U.S. at 651-52, 103 S.Ct. at 2613. The Court began by observing that in a § 1983 action, the applicable statute of limitations is provided by state law unless the state limitations law is inconsistent with federal law. Id. at 655-56, 103 S.Ct. at 2615. In light of this, the Court needed to decide whether, and if so to what extent, American Pipe constituted federal law that would supercede Puerto Rican law governing the tolling effect of the filing of a putative class action. Id. at 656, 103 S.Ct. at 2616. The petitioners in Chardon argued that American Pipe established a uniform federal rule concerning the tolling effect of class actions filed in federal courts, and that under this rule the filling of a putative class action simply suspends the running of the applicable limitations period from the time which the putative class action is filed to the time that class certification is denied. Id. The United States Court of Appeals for the First Circuit, however, concluded that the tolling effect should be determined by reference to Puerto Rican law, under which the effect of tolling a statute of limitations is that the statutory limitations period begins to run anew once the tolling ceases. Id. at 655, 103 S.Ct. at 2615. The Supreme Court affirmed the First Circuit, reasoning that American Pipe simply asserts a federal interest in assuring the efficiency and economy of the class action procedure, and that, consequently, this federal interest is satisfied so long as under the applicable state law governing the tolling effect of the filing of a putative class action each unnamed plaintiff is given as much time to intervene or file a separate action as he would have under a state savings statute applicable to a party whose action has been dismissed for reasons unrelated to the merits.... Id. at 661, 103 S.Ct. at 2618. The rule under Puerto Rican law, which, under the First Circuit's interpretation of Puerto Rican law, started the running of the limitations anew once class certification was denied, provided unnamed class members the same protection as if they had filed actions in their own names which were subsequently dismissed, so it satisfied this interest. Id. at 661, 103 S.Ct. at 2619. Petitioners argue that Chardon held that, under American Pipe, the tolling effect of the filing of a putative class action is to give putative class members the same number of days to file suit or intervene after denial of class certification as they would have to refile a complaint under the applicable state savings statute, and that we should, in adopting American Pipe, adopt this holding as well. As the discussion of Chardon above makes clear, however, this is not the holding of Chardon. Rather, what Chardon held is that when under a specific federal statutory cause of action the statute of limitations applicable to that action is provided by state law, American Pipe requires that putative class members must have at least as much time to file individual suits or to intervene as they would under the applicable state savings statute. Under Chardon, if a state provides that the filing of a putative class action carries a tolling effect that results in more time for putative class members to file complaints or intervene after the denial of class certification than the state savings statute provides for refiling of complaints dismissed without prejudice, then the time period provided for in the state rule on the tolling effect of the class action complaint would apply in federal court, not the time period for refiling provided for in the state savings statute. Chardon, then, does not speak to the issue of the tolling effect of the class action tolling rule. That is a matter of state law, and consequently is for us to decide. To the extent that petitioners' argument is that the tolling effect of a denial of class certification is simply to give putative class members the thirty-day period provided for in Md. Rule 2-101(b) to file an individual complaint or to intervene in the underlying action, we are not persuaded. In our view, a thirty-day period is not sufficiently long because it may actually result in some putative class members having less time to file their claims than they would have had if a putative class action covering their claims had never been filed. [11] A rule that permits such a counterintuitive result is not fair to prospective plaintiffs. Further, such a rule is inconsistent with the presumptive intent of the Legislature that, in enacting a statute of limitations with a certain prescribed limitations period, a plaintiff will have at least that much time to file suit. [12] Although we do not definitively resolve the issue of the precise tolling effect of the class action tolling rule we adopt today, we do hold that the tolling effect of the rule must provide at least as much time as is provided if the tolling effect is the suspension of the running of the applicable limitations period during the pendency of the putative class action. [13] Accordingly, we hold that if the conditions for the application of class action tolling are met, the filing of a class action complaint suspends the running of the statute of limitations at minimum from the time the putative class action is filed until the time that class certification is denied. [14] This rule avoids the potentially unfair and counterintuitive results that could occur under petitioners' proposed tolling effect rule. Furthermore, this rule is in accord with our prior cases recognizing tolling exceptions. In Bertonazzi, where we held that a statute of limitations for the filing of a claim against a decedent's estate was tolled because the claim had been filed in the wrong venue, we held that the tolling effect of the filing of the claim in the wrong venue was to suspend the running of the statute of limitations from the time of the filing of the complaint in the improper venue to the time of the dismissal of the original complaint for lack of venue. See Bertonazzi, 241 Md. at 366, 216 A.2d at 726. We see no reason to give a different tolling effect to the class action tolling rule we recognize today.