The class stops the clock: some injured people don't consider litigation until it seems too late. But a decades-old Supreme Court decision may help you save an apparently time-barred claim.

A highly publicized trial in a prescription drug litigation has begun. More than two years ago a drug company pulled its heavily marketed prescription medication off the market. The recall confirmed that the drug was associated with a rare but life-threatening condition. Within days of the announcement, a group of lawyers filed a class action that asserted personal injury claims on behalf of all those who had taken the drug.

Your phone rings. The caller explains that she has seen the media coverage, had taken the drug herself, and had been hospitalized for the condition the drug is known to cause. The bad news is it happened three years before the manufacturer withdrew the drug and more than five years ago today.

Calculated from the date of her hospitalization, the two-year statute of limitations has long since expired. Your state, like most, has a discovery rule, which says the limitations period begins to run on the day the plaintiff knew or should have known the cause of her injury. The latest the caller could have discovered that the drug caused her injury was the date the manufacturer announced its withdrawal--more than two years ago.

While it appears the passage of time has resulted in a statutory windfall for the drug company, you may be able to save this apparently time-barred claim.

In American Pipe & Construction Co. v. Utah, the U.S. Supreme Court held that, once filed, a class action tolls the statute of limitations tot all asserted class members. (1) Every federal appeals court, along with courts in 35 states and Puerto Rico, has addressed this issue.

With so many decisions and ranch discussion, it should come as no surprise that the rule announced in American Pipe is not simple. Lawyers relying on American Pipe must exercise caution, be cause a mistake may result in summary judgment.

The seminal cases

Just 11 days before the statute of limitations would have run, the state of Utah filed a class action suit against American Pipe and Construction Co. alleging violations of the Sherman Act. A federal trial court denied class certification tot lack of numerosity, and more than 60 members of the failed class moved to intervene. The court denied intervention, finding the statute of limitations had expired on the interveners' claims while the class action was pending. The Ninth Circuit Court of Appeals reversed, and the Supreme Court affirmed, holding,

   [A]t least where class stares 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 the statute of limitations 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. (2)

The Court reasoned that a Federal Rule of Civil Procedure 23 class action is a representative suit--a named plaintiff who files a class action does so on behalf of himself or herself and all asserted class members. Thus, a class action satisfies the purposes of the statute of limitations when the complaint provides notice to the defendant of the nature of the claims against it and the number and generic identities of the class members.

In addition, the Court said, class actions are designed to reduce court filings by encouraging class members to rely on the class suit to protect their interests. The class certification decision can take years. Without tolling, a class certification failure would deny class members whose limitations period expired in the interim the chance to have their cases decided on the merits. To protect themselves, class members would be forced to file motions to join or intervene before their limitations periods expired and before the class certification decision. The Court reasoned these were precisely the type of filings Rule 23 was designed to avoid.

After American Pipe, a split in the circuits developed. The disagreement was about whether the tolling rule applied only to interveners or extended to class members who filed separate suits.

The U.S. Supreme Court resolved this controversy in Crown, Cork & Seal Co. v. Parker, in which it held that American Pipe tolling extends to class members who file individual actions. (2) Once the statute is tolled, the Court held, it remains tolled for all asserted class members until class certification is denied. Class members may then choose to file individual actions or to intervene in the pending case.

Crown, Cork & Seal is noteworthy because the trial court denied class certification not only for lack of numerosity, as in American Pipe, but also because the named plaintiffs' claims were not typical of those of the class. Arguably, Crown, Cork & Seal extended American Pipe lolling not only to class members filing subsequent individual actions, hut also to cases in which the named plaintiffs' claims are deemed not typical of those of the class.

The basics

Lower courts have specified requirements and limitations to class action tolling.

The plaintiff must be a member of the asserted class. In Ganousis v. E.I. DuPont De Nemours & Co., the class definition specified in the complaint was broad enough to include the plaintiff, an Illinois resident. However, in the motion for class certification, counsel limited the scope of the class to residents of Minnesota, the state where the action: was pending. A federal court in Illinois held that while the filing of the class complaint toiled the plaintiff's statute of limitations, that tolling ended when the motion for class certification excluded the plaintiff from the class that sought to be certified?

The defendant must be identified. Just as the plaintiff must be an asserted class member, the defendant must be named in the class complaint in order for the plain tiff to get the benefit of tolling. (3) This requirement ensures that he or she will receive notice of the claims within the limitations period. The defendant can then take steps to preserve evidence, gather witnesses, and otherwise defend itself without the additional burden of the passage of time. Thus the purpose of the statue of limitations is satisfied.

The individual claims must be identical to the class claims. To take advantage of tolling, a plaintiff filing an individual action must assert claims identical to those in the class complaint. In Raie v. Cheminova, Inc., the plaintiff filed a wrongful death action after the trial court refused to certify a class in a case involving the insecticide Fyfanon ULV. The tailed class action had asserted only products liability claims, and the Eleventh Circuit held that tolling was inapplicable because the class action did not explicitly assert wrongful death claims. (6) The Fourth Circuit reached a similar conclusion in a case in which plaintiffs conceded the class allegations were nonspecific. (7) These cases teach that a plaintiff who relies on American Pipe must assert the same claims as the class action, and the class claims must have been sufficiently explicit to fairly put the defendant on notice of them.

What class action?

Must the plaintiff know about the class action and defer filing an individual case because of it? The Supreme Court seemed to have answered this question in American Pipe when it stated,

   We think no different a standard should apply
   to those members of the class who did
   not rely upon the commencement of the
   class action (or who were even unaware that
   such a suit existed) and thus cannot claim
   that they refrained from bringing timely
   motions for individual intervention or joinder
   because of a belief that their interests
   would be represented in the class suit. (8)

The Seventh Circuit later addressed the issue and reasoned that "a knowledge-and-reliance requirement would make a mess of any subsequently filed action by making it necessary that the judge determine the contents of the parties' heads." (9)

However, some state courts interpreting state law have reached different results. A New Jersey appellate court found that tolling applied in a products liability action but remanded to the trial court to determine whether the plaintiff deferred filing in reliance on the class action. (10)

While the rule in American Pipe is generous, it extends only so far. Class action tolling cannot revive statutes of limitations that have already expired. (11) Courts have refused to extend tolling to statutes of repose. (12) Tolling does not apply to subsequent class actions. (13) American Pipe tolling applies only to individual actions. It ends when class certification is denied, and it does not continue while the court's order denying class certification is on appeal. (14)

When to file

A clear majority of courts has found that a plaintiff with an otherwise expired claim must wait until after the court denies class certification before filing an individual action. (15) If the court grants class certification, the plaintiff can simply opt out of the class to pursue his or her own case. If the court does not, the plaintiff may then move to intervene or choose to file an individual suit. So far, two federal appellate courts and a number of lower courts have addressed the issue.

In Glarer v. Eli Lilly & Co., the First Circuit refused to toll the limitations period for a plaintiff who relied on American Pipe to toll her statute of limitations but filed her individual suit before the court ruled on class certification. (16) The court reasoned that the goal of achieving judicial economy through the reduction of individual filings "would not be served, and in fact would be disserved, by guaranteeing a separate suit at the same time that a class action [was] ongoing." (17)

The Sixth Circuit also took this position in Wyser-Pratte Management Co. v. Telxon Corp., (18) where the plaintiff attempted to rely on a class that had been certified after the plaintiff filed its individual action. Citing lower court decisions, the court found that by requiring unnamed plaintiffs to wait until after the court decides whether to certify the class, "the parties and courts will not be burdened by separate lawsuits which, in any event, may evaporate once a class has been certified." (19) The court also reasoned that, by waiting, the course of the litigation would have progressed such that the asserted class members would be in a better position to make a decision on whether to join the class or to file individual actions.

A minority of courts has reached the opposite conclusion. A federal district court in Illinois rejected Glater, finding that although permitting tolling under these circumstances might lead to a multiplicity of actions, the filing of a class action tolls the statute for all class members regardless of when they choose to opt out. (20) The Alabama Supreme Court came to the same conclusion in an earlier case in which both the class and individual actions were brought in state court tinder state law. (21)

Time will tell whether there is a true split of authority or whether these cases are simply anomalies. The lesson for the practitioner is that there is nothing to gain by filing before the class certification decision. Prudence requires a plaintiff whose claim is otherwise time-barred to adhere to the majority rule and defer filing an individual case until the court decides certification.

A jurisdictional question

It is significant that American Pipe and Crown, Cork & Seal both involved class actions that were filed in federal court, asserted federal causes of action, and involved federal statutes of limitations. American Pipe tolling is, therefore, a federal rule, and, though it is persuasive, it is not controlling on questions of state law. (22)

Whether a state class action has a comparable tolling effect is a question of state law. Of the states that have addressed it, the overwhelming majority has adopted class action tolling in their own jurisdictions. (23)

While there is a wealth of state cases adopting class action tolling, few have addressed the difficult issue of cross-jurisdictional tolling--whether a state's statute of limitations is tolled pending a class certification decision in another jurisdiction. The issue arises in two contexts: whether a federal class action involving state law claims can toll a state's statute of limitations and whether a class action pending in one state can toll the statute of limitations in another.

Three state cases that began with a nationwide class action (pedicle screw litigation) filed in the District Court for the Eastern District of Pennsylvania illustrate how courts have approached the issue. The class asserted state law causes of action for personal injury due to allegedly defective screws used in spinal surgeries. The statute of limitations expired for certain class members during the time between the class action's filing and the certification decision. After the court denied class certification, several of these asserted class members filed individual actions in their home states of Virginia, Tennessee, and Ohio.

In Wade v. Danek Medical, Inc., the Fourth Circuit addressed the case of the Virginia plaintiff who filed in federal court. (24) The court first noted that this was a diversity action involving state law causes of action and, necessarily, state law statutes of limitations. It found that Virginia had not adopted class action tolling, did not have a class action rule analogous to the federal rule, and disfavored common law equitable tolling. The court held that Virginia would not recognize the doctrine of cross-jurisdictional tolling, and the plaintiff's claims were barred by the statute of limitations.

The Fourth Circuit cited three policy considerations that led to its decision. First, Virginia had no interest in furthering the efficiency and economy of class action procedures in other jurisdictions. Second, since few states had addressed the issue, Virginia's adoption of cross-jurisdictional tolling might be received as an invitation for plaintiffs with stale claims to file in its courts after a court in another state denied class certification. Finally, if Virginia were to adopt cross-jurisdictional tolling, its statute of limitations would, in certain cases, be dependent on how long it takes courts in other jurisdictions to resolve class actions.

The Tennessee Supreme Court took up the issue next in Maestras v. Sofamar Danek Group, Inc. (25) In finding against tolling, the court relied exclusively on the three policy considerations the Fourth Circuit found persuasive in Wade.

The Ohio Supreme Court concluded the line of cases with Vaccariello v. Smith &Nephew Richards, Inc. (26) Because Ohio's class action rule is virtually identical to the federal rule, the court reasoned that a class action filed in either jurisdiction served the same purpose. Whether the class action was pending in federal court or in the Ohio courts, the defendant was put on notice of the nature of the claims against it. As such allowing a federal class action to toll the state statute of limitations did not defeat the statute's purpose.

After deciding in favor of cross-jurisdictional tolling, the court dismissed the concerns of the other courts about forum shopping because its holding merely permitted tolling for plaintiffs who could have filed in Ohio had they not chosen to rely on the federal class action. Echoing American Pipe, the court reasoned that a contrary rule would discourage Ohio members of a federal class action from relying on the class action. The result would be to encourage them to file protective suits in Ohio state courts. (27)

Unlike Virginia, Ohio had a class action rule virtually identical to the federal rule. Moreover, while the Virginia courts disfavored equitable tolling and were required to strictly construe their statutes of limitations, Ohio had a "savings statute," which allowed a plaintiff to begin a new action within one year.

Because only a few states have addressed the cross-jurisdictional tolling issue, plaintiff lawyers relying on American Pipe must be prepared to face it. Crafting a persuasive argument requires an analysis of certain factors courts have considered relevant.

* Does the state have a class action rule modeled after the federal rule? (28)

* Does the state permit class action tolling within its own jurisdiction? (29)

* Does the state permit cross-jurisdictional tolling for individual cases? (30)

* Do the state courts engage in common law equitable tolling? (31)

* Does state law provide a general savings statute? (32)

* Do policy considerations weigh in favor of, or against, cross-jurisdictional tolling?

While relevant, the presence of one or more of these factors is not determinative. One court has found that the policy considerations against cros-jurisdictional tolling outweighed other factors. (33) Research the law in your jurisdiction, and be prepared to address the policy arguments for and against tolling.

Mass tort litigation

Most courts addressing American Pipe tolling have not considered its application in mass tort litigation an issue. While many reported cases support its application in mass torts, plaintiff lawyers should be aware that a few courts, most notably in California and Texas, have declined to apply the rule in this context.

In Jolly v. Eli Lilly & Co., the California Supreme Court refused to apply class action tolling to a plaintiff in the diethylstilbestrol (DES) mass tort litigation. (34) Although it limited its holding to the facts of the case at hand, the court observed that class certification is rarely attained in the mass-tort personal injury context because each class member's claim is so fact-dependent that the defendant cannot be fairly put on notice of the claims against it. Without fair notice to the defendant, a primary justification for American Pipe tolling is absent.

Though the issue was not properly preserved on appeal, the Texas Court of Appeals agreed in Bell v. Showa Denko K.K., a case involving the dietary supplement L-tryptophan. (35) The Bell opinion cited the same concern for fair notice to the defendant. While Texas had previously adopted American Pipe tolling, it did so in a case involving claims for property damage among an identifiable group of plaintiffs. The court's rationale for not extending tolling to mass-tort personal injury cases mirrored that of the California court in Jolly.

Remember, American Pipe tolling is based on the notion that the purposes of the statute of limitations are satisfied when the defendant is given fair notice of the claims against it and the number and generic identities of the asserted class members. The purpose of class action tolling is to promote the efficiency of the class action device. Tolling the statute of limitations for asserted class members encourages them to rely on the class. This in turn discourages protective filings by class members, reducing the number of cases in the court system.

Lawyers should never rely on American Pipe tolling to postpone filing an individual case beyond the applicable statute of limitations. Because the only guarantee in class action tolling is uncertainty, American Pipe should be invoked only as an argument of last resort. However, under the right circumstances the rule can preserve claims that would have otherwise expired.

The trial lawyer who accepts such a case will face a number of difficult issues. Chief among those is cross-jurisdictional tolling. American Pipe provides one more argument to defeat the arbitrary effect of the statute of limitations. The stakes are high, but success brings an injured plaintiff his or her day in court.

Notes

(1.) 414 U.S. 538 (1974).

(2.) Id. at 553-55.

(3.) 462 U.S. 345,352 (1983).

(4.) 803 F. Supp. 149, 155 (N.D. Ill. 1992).

(5.) Highland Park Ass'n of Buss. & Enters. v. Abramson, No. 94-6424, 1996 WL 382252, at *3 (6th Cir. July 3,1996).

(6.) 336 F.3d 1278, 1283 (11th Cir. 2003); see also Singer v. Eli Lilly & Co., 549 N.Y.S.2d 654, 659 (N.Y. App. Div. 1990).

(7.) Davis v. Bethlehem Steel Corp., 769 F.2d 210, 212 (4th Cir. 1985).

(8.) Am. Pipe, 414 U.S. 538, 551-52.

(9.) Hemenway v. Peabody Coal Co., 159 F.3d 255,265 (7th Cir. 1998).

(10.) Staub v. Eastman Kodak Co., 726 A.2d 955, 967 (N.J. Super. Ct. App. Div. 1999).

(11.) Anderson v. Unisys Corp., 47 F.3d 302,308 (8th Cir. 1995).

(12.) Cacha v. Montaco, Inc., 554 S.E.2d 388, 392-93 (N.C. Ct. App. 2001).

(13.) Catholic Soc. Serv., Inc. v. INS, 182 F.3d 1053, 1059 (9th Cir. 1999) ("[E]very circuit to consider the question, including this one, has held that such tolling is not available.").

(14.) E.g., Armstrong v. Martin Marietta Corp., 138 F.3d 1374, 1391 (Fla. Dist. Ct. App. 1998). But see Scarvey v. First Fed. Sav. & Loan Ass'n of Charlotte, 552 S.E.2d 655,661 (N.C. Ct. App. 2001) ("... if an interlocutory appeal is taken from the denial of certification, tolling continues during the pendency of the appeal").

(15.) In re WorldCom, Inc., Sec. Litig., 294 F. Supp. 2d 431, 451 (S.D.N.Y. 2003); Chinn v. Giant Food, Inc., 100 F. Supp. 2d 331,335 (D. Md. 2000).

(16.) 712 F.2d 735 (1st Cir. 1983).

(17.) Id. at 739.

(18.) 413 F.3d 553 (6th Cir. 2005).

(19.) Id. at 569.

(20.) Rochford v. Joyce, 755 F. Supp. 1423, 1428 (N.D. Ill. 1990).

(21.) White v. Sims, 470 So. 2d 1191, 1193 (Ala. 1985).

(22.) See Vaught v. Showa Denko K.K., 107 F.3d 1137, 1145 (5th Cir. 1997); Thelen v. Mass. Mut. Life Ins. Co., 111 F. Supp. 2d 688, 694 (D. Md. 2000). But see Adams Pub. Sch. Dist. v. Asbestos Corp., 7 F.3d 717, 719 (8th Cir. 1993).

(23.) Christensen v. Philip Morris USA, 875 A.2d 832, 846-48 (Md. Ct. App. 2005); Staub, 726 A.2d 955, 963-64. For a complete listing of state cases citing American Pipe, see www.medlawlegalteam. com/articles/american-pipe-by-state.html (last visited Sept. 26, 2005).

(24.) 182 F.3d 281, 287 (4th Cir. 1999).

(25.) 33 S.W.3d 805, 807-08 (Tenn. 2000).

(26.) 763 N.E.2d 160 (Ohio 2002).

(27.) Id. at 163.

(28.) Boone v. Citigroup, Inc., 416 F.3d 382, 393 (5th Cir. 2005) (declining to permit tolling, noting among other things that "Mississippi does not have class actions").

(29.) Id.

(30.) Lee v. Grand Rapids Bd. of Educ., 384 N.W.2d 165, 168 (Mich. Ct. App. 1986); see also Ravitch v. Pricewaterhouse, 793 A.2d 939, 942-43 (Pa. Super. Ct. 2002).

(31.) Staub, 726 A.2d 955, 964.

(32. Hemenway, 159 F.3d 255, 266.

(33.) Portwood v. Ford Motor Co., 701 N.E.2d 1102, 1104 (Ill. 1998).

(34.) 751 P.2d 923, 937 (Cal. 1988). But see Smith v. Bayer Corp., No. B145059, 2001 WL 1660064, at * 11 (Cal. Ct. App. 2002) (distinguishing Jolly and permitting tolling in mass tort litigation in which defendants were adequately notified of the number and generic identities of unnamed plaintiffs).

(35.) 899 S.W.2d 749, 758 (Tex. Ct. App. 1995). But see In re Norplant Contraceptive Prods. Liab. Litig., 173 F.R.D. 185, 189 (E.D. Tex. 1997) (distinguishing Bell and permitting tolling in mass tort litigation when product users were "readily quantified through defendant's own sales data").

GERALD D. JOWERS JR. practices law with Janet, Jenner & Suggs in Columbia, South Carolina.

Products Liability Section offers varied member benefits

The Products Liability Section is a vital hub of legal resources for trial lawyers who pursue claims on behalf of vulnerable consumers harmed by defective products.

"Anyone who litigates these kinds of cases must have the ability to understand and appreciate the issues and share the information with other attorneys who have litigated these issues in the past," said Section Chair Theodore Leopold of West Palm Beach, Florida.

The section boasts invaluable benefits for its 1,800 members, most notably the Products Liability Law Reporter. The journal, published 10 times a year, includes case summaries, news items involving products liability issues, announcements of government regulatory actions, and other features.

Summarized cases typically involve products like automobiles, drugs, to bacco, and medical equipment, and claims of failure to warn, fraudulent concealment, and defective design. Issues dating back to October 2004 are available online.

Members also receive the quarterly Products Liability Section Newsletter, which contains articles about section activities and current developments in the law. Archived issues of the publication are available online on the section's home page.

Another staple section benefit is its active list server, where members network with each other daily, soliciting and offering advice on various topics related to their practices. The membership directory, published annually, helps members keep in touch via the phone or e-mail.

These resources are essential to practitioners who focus primarily on products-related litigation, but they are useful to other personal injury lawyers as well.

"Members who have a general practice often have clients that will need information regarding a defective product. [The section] can provide the general practitioner information and knowledge regarding these types of issues," Leopold said.

Other section officers are Chair-Elect James Rogers of Seattle; Vice-Chair and Newsletter Editor Carrie Frank of Arvada, Colorado; Second Vice-Chair Martin Healy of Chicago; and Secretary and Treasurer Richard Miller of Kansas City, Missouri.

Annual membership dues are $130. To join or for more information, contact ATLA Sections at [phone], ext. 290, or visit the ATLA Sections home page at www.atla.org/sections.