11th Circ. Strikes Back At Untimely ‘Piggyback' Class Actions

Suppose that you have been successful in defeating a proposed class action. The glow of success begins to fade, however, when your client is hit with another putative class action by a member of the first class. Worse yet, that second class claim looks like one that should be barred by the statute of limitations, but the plaintiff argues that the new class claim was tolled while the initial class action was pending. Finally, you learn that the federal courts of appeals have been busy narrowing the general principle that a pending class action only can toll the statute of limitations as to later filed individual claims by allowing, at least in some circumstances, a later filed class claim to benefit from tolling. What happened to my statute of limitations defense and apparent victory? Is there any end to proposed class claims in this life short of a class settlement or a complete victory on the merits?

A recent decision by the United States Court of Appeals for the Eleventh Circuit is especially good news for class action defendants seeking the benefits of the statute of limitations in class actions. The decision, in Ewing Industries Corporation v. Bob Wines Nursery, Inc., et al. (11th Cir., Aug. 3, 2015), takes a strong view that later filed class claims never can benefit from tolling from a previously filed, but denied, class claim. The Eleventh Circuit's decision is a welcome break for defendants in a trend of decisions taking a weaker view that tolling can be claimed, at least when the first case is dismissed for reasons that were specific to the named class representative, not the class as a whole.

The Contours of American Pipe Tolling

"American Pipe tolling" is the principle (first espoused by the U.S. Supreme Court) that the individual claims of putative class members are tolled until the time that class certification is denied, at which time the statute of limitations of the claims of the putative class members resumes.1 The Supreme Court reasoned that tolling these individual claims for the period between the filing of the class action and a decision on certification serves to prevent a flood of individual suits by putative class members seeking to preserve their right to sue, which would be unnecessary were the class granted certification. However, courts nationwide have held that American Pipe tolling is inapplicable to subsequently filed class actions based on the same set of substantive facts and claims.2 Put another way, American Pipe tolling only applies to the claims of putative class members to the extent that...