As we have noted before, the tolling rule created by the Supreme Court in the American Pipe case–which tolls the statute of limitations for absent class members when a class action is filed–generates vigorous disputes over when stale or successive claims will be allowed. The Seventh Circuit recently considered one such dispute in Collins v. Village of Palatine, holding that the statute of limitations is not tolled during the pendency of an ultimately successful appeal from the dismissal of a putative class action that had not been certified.
In Collins, the plaintiff sought to bring a class action alleging that a municipality's practice of putting certain personal information on traffic tickets left under windshield wipers violated the federal Driver's Privacy Protection Act. Because his claim would otherwise have been untimely, the plaintiff invoked the American Pipe tolling rule based on two prior class actions filed by his lawyer. In the first of those suits, the district court dismissed the suit before there had been any ruling on class certification. The Seventh Circuit ultimately reversed, but on remand the district court granted summary judgment and the subsequent appeal was unsuccessful. The plaintiff's lawyer then filed a successor suit on his own behalf, which he dismissed when he filed the plaintiff's suit.
The question on appeal was whether American Pipe tolling continued after the first case was dismissed with prejudice. The Seventh Circuit concluded it did not. The court first observed that the consensus view in the courts of appeals is that, under American Pipe tolling, the statute of limitations starts running immediately upon any of the following occurrences:
- denial of class certification;
- a choice by a class member to opt out;
- voluntary dismissal of class claims; and
- dismissal of an uncertified class action for lack of subject-matter jurisdiction.
The court saw no reason to create a different rule for dismissal of an uncertified class action with prejudice. At that point, the absent class members are "on notice that they must take steps to protect their rights or suffer the consequences." "Continuing to toll the limitations period beyond the dismissal of a noncertified class claim would encroach more severely on the interests underlying statutes of limitations." And the court preferred "a unified rule that is clear and easy to enforce."
Collins is an important reminder to defendants to push back against aggressive assertions of American Pipe tolling. It also provides important protections against successive–and abusive–class actions filed long after the statute of limitations has expired. Finally, it should save defendants from having to play an expensive game of whac-a-mole as plaintiffs' lawyers file one class action after another in search of favorable plaintiffs and favorable courts.
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