Court Opinion

ID: 9415267
Source: CourtListenerOpinion
Date Created: 2023-08-02 18:41:40.827564+00
Date Added: 2024-06-11T17:15:12.291715
License: Public Domain

ANDERSON, Circuit Judge,
dissenting:
Because I believe the rule created by the majority is inconsistent with Supreme Court precedent and unjustified by considerations of policy, I respectfully dissent. I would have affirmed the district court by holding that the tolling period ceased, and thus the statute of limitations began to run again, as soon as the district court excluded appellants as members of the Carmichael class action.
The majority’s holding — that the statute of limitations remains tolled through completion of the appeals process in the named plaintiffs’ ease — conflicts with Supreme Court precedent. In American Pipe & Constr. Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), the State of Utah filed a class action antitrust complaint with just eleven days left to run in the limitations period. Several months later, the district court entered an order denying class certification, because of the failure to satisfy the numerosity requirement of Fed.R.Civ.P. 23(a)(1). Eight days after this order, several state and local agencies who had been putative class members moved to intervene in the action to become plaintiffs. The Court held that the filing of the original class action complaint “suspended the running of the limitation period only during the pendency of the motion to strip the suit of its class action character.” Id. at 561, 94 S.Ct. at 770 (emphasis added). The Court explained that “the intervenors thus had 11 days after the entry of the order denying them participation in the suit as class members in which to move for permission to intervene.” Id. Although apparently there was no argument that tolling should continue thereafter because the order denying class status was interlocutory, and thus it might be said that the Court did not squarely rejeet such an *1511argument, surely the Court assumed that the crucial time for tolling to end was the district court’s order denying class certification, not some later final order.
In Crown, Cork & Seal Co., Inc. v. Parker, 462 U.S. 345, 103 S.Ct. 2392, 76 L.Ed.2d 628 (1983), the Court applied the American Pipe tolling rule not only for persons who sought to intervene in the named plaintiffs’ ease after class certification was denied, but also for persons who wished to file separate suits. Within ninety days after the district court denied class certification in the Title VII action, but almost two years after receiving a right to sue notice from the EEOC, respondent Parker filed an individual Title VII complaint. By explaining that Parker “retained a full 90 days in which to bring suit after class certification was denied,” id. at 354, 103 S.Ct. at 2398 (emphasis added), the Court indicated that the tolling of the statute of limitations ceased as soon as the district court denied class certification, and not when a final decision on the merits was reached.1
In United Airlines, Inc. v. McDonald, 432 U.S. 385, 97 S.Ct. 2464, 53 L.Ed.2d 423 (1977), the district court denied class certification in a Title VII ease, and the named plaintiffs successfully litigated their ease to a settlement. Eighteen days after the district court entered a judgment of dismissal upon the settlement, a putative class member filed a motion to intervene for the sole purpose of appealing the district court’s earlier denial of class certification. The Court held that the motion was timely under Fed.R.Civ.P. 24 because it was filed “within the [30 day] time period in which the named plaintiffs could have taken an appeal.” Id. at 396, 103 S.Ct. at 2471. In its analysis, the Court addressed the defendant’s argument that the intervenor had no interest in the litigation because the statute of limitations had expired. The Court emphasized that the purpose of the motion was to appeal the denial of class certification, and not to litigate an individual claim:
This [statute of limitations] argument might be persuasive if the respondent had sought to intervene in order to join the named plaintiffs in litigating her individual claim ..., for she then would have occupied the same position as the intervenors in American Pipe. But the later motion to intervene in this case was for a wholly different purpose. That purpose was to obtain appellate review of the District Court’s order denying class action status ..., and the motion complied with, as it was required to, the time limitation for lodging an appeal.... Success in that review would result in the certification of a class, the named members of which had complied with the statute of limitations; the respondent is a member of that class against whom the statute had not run at the time the class action was commenced.
Id. at 392, 97 S.Ct. at 2468-69 (footnote omitted). The passage quoted above strongly implies that the statute of limitations for suing in one’s own name begins to run again as soon as the district court denies class certification, although an excluded putative class member whose individual claim is barred by the statute of limitations may still appeal the denial of class certification.
In addition to the Supreme Court precedent discussed above, at least two federal appellate courts have rejected the argument that the statute of limitations for filing an individual claim should remain tolled through an unsuccessful appeal of the denial of class certification. See Nelson v. County of Allegheny, 860 F.Supp. 1080, 1084 (W.D.Pa.1994) (“[T]he claims of the plaintiff in United Airlines only survive as part of the class action and only if the decertification order is reversed on appeal.”), aff'd, 60 F.3d 1010 (3d Cir.1995) (holding that the tolling of the statute of limitations ceased upon the district court’s order denying class certification, and *1512did not continue through completion of the appeals process), cert. denied, — U.S.-, 116 S.Ct. 1266, 134 L.Ed.2d 213 (1996); Calderon v. Presidio Valley Farmers Ass’n, 863 F.2d 384, 390 (5th Cir.) (per curiam) (holding that the statute of limitations begins to run again upon the district court’s original denial of class certification, even if the district court later reconsiders the issue and certifies a class), cert. denied, 493 U.S. 821, 110 S.Ct. 79,107 L.Ed.2d 45 (1989).
Considering the case law discussed above, I would hold that the statute of limitations began to run again as soon as the district court excluded appellants as members of the Carmichael class action. Moreover, several considerations of policy persuade me that the result reached by the majority is unwise, and that the court should have adopted the simpler approach I advocate.
Tolling the statute of limitations while a class action is pending encourages reasonable reliance on the named plaintiffs to protect the interests of the putative class members. See Crown, Cork & Seal, 462 U.S. at 352-53, 103 S.Ct. at 2397 (“Class members who do not file suit while the class action is pending cannot be accused of sleeping on their rights; Rule 23 both permits and encourages class members to rely on the named plaintiffs to press their claims.”). In my view, after the district court enters the order denying class action status, reliance on the named plaintiffs is no longer reasonable, and the excluded putative class members should be on notice that they must act to protect their rights. See United Airlines, Inc. v. McDonald, 432 U.S. 385, 399, 97 S.Ct. 2464, 2472, 53 L.Ed.2d 423 (1977) (Powell, J., dissenting). According to the majority, however, continuing to toll the statute of limitations after denial of class certification is justified: the denial of class action status “may be only temporary because the district court may reconsider its dismissal order and vacate the order, or upon final judgment the claimants may appeal their dismissal and the appellate court may reverse the district court’s decision.” Maj. Op. at 1509. To the contrary, I find it difficult to believe that a reasonable person would rely on the hope that some day a court might determine that the suit should have proceeded as a class action. When the district court denies class certification,2 the named plaintiffs no longer have a duty to advance the interests of the excluded putative class members. See Fed.R.Civ.P. 23(c)(1), advisory committee’s note (explaining that the trial court’s order denying class action status “strip[s] [the suit] of its character as a class action,” thus requiring the litigation to proceed as a non-class action, even though the district court may change its mind and certify a class at any time before a decision on the merits); Pearson v. Ecological Science Corp., 522 F.2d 171, 177 (5th Cir.1975) (rejecting the argument that the interlocutory nature of the district court’s order denying class certification requires the named plaintiffs to exercise a continuing fiduciary duty to the putative class members). Although it is possible that the district court may reconsider its order denying class certification, or that an appellate court may ultimately reverse it, district courts have broad discretion with respect to such rulings. See, e.g., Jones v. Firestone Tire & Rubber Co., Inc., 977 F.2d 527, 531 (11th Cir.1992) (citing cases for the proposition that “[a] district court’s denial of class certification will not be disturbed absent an abuse of discretion”), cert. denied, 508 U.S. 961, 113 S.Ct. 2932, 124 L.Ed.2d 682 (1993). Thus, reliance on the possibility of a change in the order denying class certification is ordinarily not reasonable.3 For the foregoing reasons, I believe *1513that tolling the statute of limitations after the district court denies class certification is unnecessary to protect any reasonable reliance by putative class members on their former class representatives.
While tolerating unreasonable reliance by putative class members on their former class representatives, the majority’s extended tolling rule creates a substantial risk of unfair prejudice to defendants. Statutes of limitation are intended to protect defendants by preventing “the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.” Order of Railroad Telegraphers v. Railway Express Agency, 321 U.S. 342, 348-49, 64 S.Ct. 582, 586, 88 L.Ed. 788 (1944). The majority’s rule will unfairly prejudice at least some defendants by extending the tolling of the limitations period through the completion of an appeal of the class certification decision. The statute of limitations conceivably could remain tolled for several years, especially under the majority’s option 2 where no interlocutory appeal occurs. See Nelson v. County of Allegheny, 60 F.3d 1010, 1013 (3d Cir.1995) (holding that such an extended tolling period would be “unreasonable”), cert. denied, - — U.S.-, 116 S.Ct. 1266, 134 L.Ed.2d 213 (1996). The potential length of the delay certainly increases the probability of lost evidence, faded memories, missing witnesses, and other forms of prejudice to the defendant. Of course, the American Pipe tolling rule also causes some delay, even if the tolling ceases as soon as the district court denies class certification. However, the length of the delay (and hence the risk of prejudice) is much smaller, in part because Fed.R.Civ.P. 23(c)(1) directs the district court to make the class certification decision “[a]s soon as practicable after the commencement of an action brought as a class action.” See American Pipe, 414 U.S. at 562, 94 S.Ct. at 770 (Blackmun, J., concurring) (noting that district courts can make the American Pipe rule more fair to defendants, inter alia, by making the class certification decision promptly).
Because I believe it is unreasonable for plaintiffs to rely on an action after being dismissed from it, and because I believe the majority’s rule unfairly prejudices defendants, I would end the tolling of the statute of limitations as soon as the trial court denies class certification. Thus, when the district court denies class certification, I would require the dismissed class member to file an individual suit (or intervene to become a party in the named plaintiffs’ case) within the time remaining in the statute of limitations period. If the claimant also wished to appeal his or her exclusion from the class, he or she could file a motion pursuant to Fed.R.Civ.P. 54(b) (or 28 U.S.C. § 1292(b)) seeking the class action judge’s permission to file an interlocutory appeal. The claimant could then request a stay of his or her individual lawsuit pending the outcome of the class certification appeal. Although the decision whether to grant a stay is a matter of discretion with the district court, the claimant would have a strong argument for a stay if the class action judge allowed an interlocutory appeal of the class certification issue and the claimant could demonstrate that there was merit to the interlocutory appeal. My approach thus depends on the sound discretion of district judges: the discretion of the class action judge to allow an interlocutory appeal in eases where there is some hope for a successful appeal, and the discretion of the individual suit judge to stay proceedings pending the outcome of an appeal if such a stay would serve the interests of justice.
The foregoing discussion demonstrates that the approach I advocate is supported by strong Supreme Court dicta, by the square holdings of two circuit courts of appeal, and by relevant policy considerations. I also respectfully submit that the rule set forth by the majority contains unnecessary ambiguities and complexities.
As I understand it, the majority offers putative class members the following three options after the district court enters the *1514order denying them participation in the class action:
(1) They may file an individual lawsuit within the remaining time before the statute of limitations expires. The majority apparently contemplates that the tolled statute of limitations would recommence its running at the time of the district court’s order denying class certification.4 The majority opinion also indicates that filing the individual suit operates as a waiver of the right to participate in any appeal regarding the denial of class certification; 5 or
(2) They may await final judgment in the named plaintiffs’ case, intervene therein and appeal from the earlier order denying class certification.6 If that appeal is unsuccessful, they may then file an individual suit within the time that remained as of the district court’s order denying class certification.7 In other words, after the district court denies class certification, the statute of limitations for filing an individual suit remains tolled until the named plaintiffs’ case reaches final judgment and no further appeals with respect to the denial of class certification are possible;8 or
(3)They may move to intervene in the named plaintiffs’ case in order to pursue an interlocutory appeal of the class certification decision.9 In this option, as in option 1, the majority apparently contemplates that the tolled statute of limitations would recommence its running at the time *1515of the district court’s order denying class certification, but would cease running and be tolled again when the claimant moves for an interlocutory appeal.10 If an interlocutory appeal is permitted and the district court is affirmed, then the majority explains that the running of the statute of limitations recommences.11 If the district court declines to certify the issue for appeal or if an interlocutory appeal is not accepted, the majority apparently contemplates that the tolling ceases and the running of the statute of limitations recommences.12 If the recommenced statute of limitations expires before the claimant files an individual suit, the claimant may exercise option 2 (i.e., file suit after final judgment in the named plaintiffs’ ease — at which time the expired statute of limitations becomes resurrected).
From the foregoing discussion, it appears that the majority’s array of options will generate confusion and 'uncertainty.
In sum, I submit that the majority’s approach to this case is inconsistent with precedent and the relevant policy considerations, and also contains ambiguities and complexities. Respectfully, I dissent.

. The first sentence of the opinion reveals the Court’s belief that the statute of limitations recommences when the district court denies class certification, not at some later time:
The question presented in this case is whether the filing of a class action tolls the applicable statute of limitations and thus permits all members of the putative class to file individual actions in the event that class certification is denied, provided, of course, that those actions are instituted within the time that remains on the limitations period.
Id. at 346-47, 103 S.Ct. at 2394.

. Technically speaking, the district court in the instant case did not deny class certification altogether; rather, it certified a narrow class that did not include appellants as members. As a shorthand, I will refer in this opinion to the more common situation where the district court denies class certification altogether.

. Furthermore, it could take years for the named plaintiffs' case to reach final judgment and completion of the appeals process, and there are no guarantees that the named plaintiffs will prevail on the merits (or obtain a favorable settlement). Thus, even if the tolling of the statute of limita*1513tions is extended as contemplated by the majority, many putative class members will protect themselves by filing an individual suit soon after the district court denies class certification.

. The majority makes this point clear in its treatment of the facts of the case. See Maj.Op. at 1510 ("If we applied this new rule of law to this case, [the statute of limitations] would bar the Armstrong plaintiffs' individual actions because the Armstrong plaintiffs filed their individual ADEA lawsuit after the ninety-day statute of limitations had expired but before final judgment.”). Also, in its description of option 1, the majority states that the individual suit should be filed "within the remaining time before the statute of limitations runs.”

. I infer this "waiver" concept from the majority’s description of option 1, which states that the filing of an individual suit renders "moot" any appeal regarding the denial of class certification. I think the majority is creating a waiver, because it is not clear how the concept of mootness would operate in this context. Both ordinary principles of mootness and the dicta in United Airlines, 432 U.S. at 392, 97 S.Ct. at 2468-69, suggest that there is no mootness. (The doctrine of res judicata, or the related doctrine of collateral estoppel, might apply when the individual suit reaches a judgment; however, those doctrines would not apply when the individual suit is simply filed.)

. It is not clear what happens if the putative class members choose not to appeal their exclusion from the class (e.g., if the defendant prevails on the merits). I presume that the statute of limitations begins to run again upon the expiration of the time for filing an appeal from the final judgment in the named plaintiffs' case.

. The majority's opinion does not explain the exact point at which the statute of limitations begins to run again. For example, does it recommence on the date of the appellate court’s opinion, or when the time for seeking certiorari expires? The appropriate time would probably be when no further appeals (or rehearings) are possible, which of course entails the maximum delay before the statute of limitations would recommence.

. To say that the statute of limitations remains "tolled" this entire time is not completely accurate, because the majority apparently contemplates that no individual suits may be filed in the time period falling between options 1 and 2. The instant case provides an example. The Armstrong plaintiffs filed this suit more than ninety days after the district court's order dismissing them from the Carmichael class action; thus, they are too late to exercise option 1. However, their suit was filed before the Carmichael case reached final judgment; thus, they are too early to exercise option 2. Unwary plaintiffs who file suit in the interim period between options 1 and 2 will have their individual suits dismissed: should the dismissal be with prejudice (because the statute of limitations has expired), or without prejudice (because under option 2 the statute of limitations will resurrect after the named plaintiffs’ case reaches final judgment)? The majority apparently contemplates that the dismissal would be with prejudice. Maj.Op. at 1510 (“If we applied this new rule of law to this case, section 626(e) would bar the Armstrong plaintiffs' individual actions_”). Thus, the unwary plaintiff who files an individual suit late is barred forever, but an individual plaintiff who waits pursuant to option 2 is not barred.

. If the named plaintiffs file an interlocutory appeal regarding the denial of class certification, do the putative class members still have to intervene in order to take advantage of option 3?

. I infer that the running of the statute of limitations recommences when the district court denies class certification. See supra note 4. However, if the statute of limitations does recommence at the time of the district court’s order denying class certification, then the statute would clearly have expired by the time of final judgment in the named plaintiffs’ case; however, option 2 contemplates a resurrection of the statute at that time. Does the statute of limitations run for purposes of options 1 and 3, but not for puiposes of option 2? See supra note 8.

. The majority does not clarify at what exact point the statute of limitations begins to run again after an unsuccessful appeal. See supra note 7.

.I infer this point from the majority's description of option 3, i.e., the language that the claimant may file an individual lawsuit "within the time remaining.” In this situation, it is unclear exactly when the statute of limitations recommences. It probably begins to run again when the district court enters the order denying permission to file an interlocutory appeal (or, if the district court grants such permission, when the appellate court enters an order refusing to entertain an interlocutory appeal).