Court Opinion

ID: 8948449
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:34:28.814751+00
Date Added: 2024-06-11T17:09:54.247883
License: Public Domain

MESKILL, Circuit Judge,
concurring in part and dissenting in part:
I concur in all parts of the majority’s thorough opinion except part III-C-2, wherein the majority opinion applies the tolling principle in American Pipe & Construction Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), to toll the statute of limitations on plaintiffs’ section *7341983 and RICO claims. Tolling under American Pipe is appropriate, according to the majority opinion, “[sjince the substance of the state court claims was the same as that of the claims asserted here and the County was made a defendant to the action.” However, for reasons expressed more fully below, I believe that tolling under American Pipe is inappropriate in this case both on the law and the facts.
The relief afforded by the tolling doctrine of American Pipe applies only to further the purposes of class action procedure and the statute of limitations. 414 U.S. at 551-55, 94 S.Ct. at 765-67. These purposes are furthered by tolling where a group of plaintiffs is denied certification as a class and subsequent individual suits based on the same cause of action are untimely as a result of the failed effort to gain class certification. In American Pipe, a civil class action suit was filed by the State of Utah in the district court alleging violations of section one of the Sherman Act. Id. at 541, 94 S.Ct. at 760. Class action status was denied because the proposed class failed to meet the numerosity requirements of Fed.R.Civ.P. 23(a)(1). Members of the original class action then sought to intervene in the Utah action but were denied permission because the statute of limitations had run on their claims. The Supreme Court held, however, that the running of the statute was tolled where a class “commences a suit and thereby notifies 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, 94 S.Ct. at 767. In American Pipe, therefore, tolling was permitted where only the procedural vehicle for the assertion of plaintiffs’ claims failed, rendering their individual actions untimely. Plaintiffs’ individual claims, however, were the very same claims asserted in their original class action.
The majority opinion unnecessarily, and I believe unwisely, broadens American Pipe. Unlike the setting in American Pipe, the filing of the state action in our case did not notify defendants of the “substantive claims being brought against them” in the district court. Although both actions were based on the same set of facts, the claims themselves asserted separate and distinct grounds for recovery. The class action brought in state court was based on a state law theory of recovery seeking compensatory damages. The individual actions brought in federal court sought treble damages based on specific federal statutes.
The majority, in part III — C—1 of its opinion, recognizes “the significant differences between civil RICO and other types of claims cognizable at common law or under state law” for purposes of borrowing a suitable statute of limitations from state law. The majority identifies these differences as follows:
[Mjost of the racketeering activity that could form the predicate for a civil RICO claim is defined in terms of specific federal statutory violations; additional elements of a civil RICO claim, such as effect on interstate commerce, commission of two predicate acts within a span of ten years, and the required existence of a RICO “enterprise,” also find no counterparts at common law. Further, civil RICO remedies are designed not simply to compensate injured persons but to deter would-be wrongdoers by awarding treble damages and attorneys’ fees to every successful plaintiff.
The differences that preclude the adoption of a state statute of limitations for RICO claims argue against tolling of the federal statute here. In any given case, there may be elements of a RICO claim that are not in issue and are not pleaded in a state action. Ordinarily, litigants do not plead a state case in an effort to establish the commission of two predicate acts within a ten year time span, or an effect on interstate commerce, or the existence of a RICO enterprise. Certainly, plaintiffs in the present case were not required to plead those elements in their state suit, which was based primarily on sections 61 and 107 of New York’s civil service law and Article 5, Section 6 of the New York State Consti*735tution. It is difficult to imagine, therefore, how the state suit could provide defendants with notice of the substantive federal claims that plaintiffs brought later, after their state effort failed.
One purpose of a statute of limitations is to prevent suits after “ ‘evidence has been lost, memories have faded, and witnesses have disappeared.’ ” American Pipe, 414 U.S. at 554, 94 S.Ct. at 766 (quoting Order of Railroad Telegraphers v. Railway Express Agency, 321 U.S. 342, 348-49, 64 S.Ct. 582, 586, 88 L.Ed. 788 (1944)). This purpose is generally fulfilled where a prior state class action alerts a defendant to preserve evidence that would be helpful in defending against a subsequent individual claim. Plaintiffs’ state action was dismissed, however, because the complaint “in no way allege[d] facts sufficient to connect any of the named defendants with the serious charges alleged against them, nor [did] it give the defendants or the Court notice of the alleged transactions intended to be proved.” Cullen v. Margiotta, 81 Misc.2d 809, 367 N.Y.S.2d 638, 644 (Sup.Ct. Nassau Co. 1975) (emphasis added). Plaintiffs’ state action simply did not alert defendants to the possibility that a later federal civil rights claim or a RICO claim would be brought against them. After the state action was dismissed on the merits, defendants had no reason to preserve evidence.
The dismissal of plaintiffs’ state complaint on the merits, therefore, serves to distinguish this case from American Pipe. In American Pipe, only the procedural vehicle for the assertion of otherwise valid claims failed. The Supreme Court stated:
We hold that in this posture, at least where class action status has been denied solely because of failure to demonstrate that “the class is so numerous that joinder of all members is impracticable,” the commencement of the original class suit tolls the running of the statute for all purported members of the class who make timely motions to intervene after the court has found the suit inappropriate for class action status.
414 U.S. at 552-53, 94 S.Ct. at 765-66 (emphasis added). Here, not only was class action status denied, but plaintiffs’ state claims were dismissed for failure to state a cause of action under state law. Based on a plain reading of American Pipe, it should be apparent that the Supreme Court would not permit tolling here.
New York cases cited in support of American Pipe tolling likewise do not support the result reached by the majority. None of the cited cases holds that a state class action asserting an invalid state law claim tolls the statute of limitations on an individual action brought on a federal statute in federal court. In Yollin v. Holland America Cruises, Inc., 97 A.D.2d 720, 468 N.Y.S.2d 873, 875 (1st Dep’t 1983), the Appellate Division decided only that the commencement of a class action tolls a contractual period of limitations for all persons who may wish to join the class. Yollin did not even deal with the separate problem of tolling for subsequent individual suits.
In Clifton Knolls Sewerage Disposal Co. v. Aulenback, 88 A.D.2d 1024, 1025, 451 N.Y.S.2d 907, 908 (3d Dep’t 1982), defendants had previously brought a class action seeking a determination that plaintiff was not entitled to charge them for sewer services. The court ruled in favor of plaintiff. Plaintiff then brought an action to recover for the services based on the earlier judgment. The court ruled that the earlier class action tolled the statute of limitations with respect to plaintiff’s later suit. In Clifton, the earlier judgment on liability provided adequate notice that plaintiff might bring an action to recover its sewer charges. In the present case, no similar prior judgment has been entered establishing liability on the federal claims and, therefore, Clifton is inapposite.
Finally, in Sutton Carpet Cleaners v. Firemen’s Ins. Co., 68 N.Y.S.2d 218, 224 (Sup.Ct. Bronx Co. 1947), aff'd, 273 A.D. 944, 78 N.Y.S.2d 565 (1st Dep’t 1948), aff'd, 299 N.Y. 646, 87 N.E.2d 53 (1949), only the procedural vehicle for bringing representative claims failed. No issue was presented concerning tolling of limitations periods when the original class action suit is dismissed for failure to state a claim. Sutton is like American Pipe and unlike our case *736and, therefore, is inappropriate as authority for tolling in this case.
For the foregoing reasons, it is evident that the majority opinion broadens American Pipe tolling to a questionable and, I believe, unwise extent.
The tolling rule of American Pipe is a generous one, inviting abuse. It preserves for class members a range of options pending a decision on class certification. The rule should not be read, however, as leaving a plaintiff free to raise different or peripheral claims following denial of class status.
Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 354, 103 S.Ct. 2392, 2398, 76 L.Ed.2d 628 (1983) (Powell, J., concurring). As a practical matter, my objections would make little difference in much of the result reached by the majority because the principle of tolling by duress applies to toll the limitations period to the same or greater extent as would American Pipe. However, as to the claims mentioned in part III-C-2-b of the majority opinion, i.e., claims against the county that are not subject to tolling by duress, and as to claims that do not involve capitulation to coercion, neither tolling by duress nor American Pipe tolling would bar the statute of limitations. Accordingly, as to these few claims, the district court should be affirmed.