Editor’s note: The following entry comes from my colleague, Raj Chohan, who has agreed to become a regular contributor to ClassActionBlawg.com. Raj joined Baker Hostetler this fall after graduating from the DU Sturm College of Law in May and successfully completing the Colorado bar exam in July. Law is Raj’s second career, following a successful first career in journalism. I am very pleased to have Raj on board and look forward to many more informative and insightful posts-PK.
Earlier this summer, the Federal Circuit weighed-in on a matter of first impression concerning class action tolling. For those who are new to this area of the law, tolling is a procedure that allows plaintiffs to stop the clock on the statute of limitations. This gives plaintiffs’ counsel more time to organize their lawsuits and round up other plaintiffs. Being able to toll a class action is a huge advantage for plaintiffs given how cumbersome it is to put a class together and get it certified. In Bright v. United States, 603 F.3d 1273 (Fed. Cir. 2010), the appellate panel looked at the availability of tolling for opt-in classes in actions against the federal government (an opt-in class is one in which people who would otherwise qualify for the class are only included in the class if they affirmatively choose to be included). Taking sides in a long-running circuit split, the appellate panel concluded tolling was proper for putative class members seeking to opt-in after the limitations period had expired. The decision was broadly written and will almost certainly give plaintiffs greater latitude to stop-the-clock in many kinds of class action suits against the federal government.
The case involved landowners who sued the United States seeking compensation for the alleged taking of their reversionary property interests. The “taking” involved the conversion of miles of railroad easements into public recreational trails under the federal Trails Act. Property owners argued they should have recovered their land after the railroad relinquished its use, rather than lose it yet again, this time to hikers and mountain bikers.
One landowner, Ms. Fauvergue, filed a class action complaint against the United States, alleging a Fifth Amendment taking, and seeking compensation for the value of the land used in the rail-to-trail conversion. The plaintiff sought certification within the applicable six-year statute of limitations. After the limitations period had expired Ms. Fauvergue added twenty new plaintiffs to her amended complaint. However, the Court of Federal Claims dismissed the additional plaintiffs because they had not filed within the statutory time limit.
On appeal, the Federal Circuit reversed the lower court and answered a question of first impression: Is class action tolling available for opt-in classes in the Court of Federal Claims? The appellate panel answered yes, “we find ourselves in agreement with the courts holding that class action tolling is available under an opt-in scheme. In our view, such a result is most consistent with the objectives which class action procedures are meant to achieve.” Id. at 1285. The “objectives” refer to the aim of class action procedures in discouraging multiple suits. The Federal Circuit reasoned that prohibiting tolling would “eliminate class actions in the Court of Federal Claims in instances where suit was filed, and class certification was sought before expiration of [the limitations period], but [where the] the putative class was not certified before the period expired.” Id. at 1287. Under such a scenario, putative class members might be incentivized to file their own individual actions before the limitations period expired rather than risking a late class certification decision on the putative class. Apparently, to discourage the plaintiffs’ incentive to file multiple suits, the Federal Circuit agreed tolling is appropriate in such cases.
In rendering its opinion, the court effectively took sides in an ongoing split between the third and eleventh circuits. In Sperling v. Hoffman La-Roche, Inc., 24 F.3d 463 (3d Cir. 1994), the Third Circuit Court of Appeals permitted the application of tolling to opt-in class actions arising under the Age Discrimination and Employment Act (“ADEA”). The reviewing court reasoned such an application is consistent with the purposes served by a statute of limitations, namely – to prevent stale claims, put defendants on notice, and prevent plaintiffs from “sleeping on their rights.” Id. at 471-72.
In contrast, the Eleventh Circuit Court of Appeals used different reasoning to achieve the opposite result in Grayson v. K Mart Corp., 79 F.3d 1086 (11th Cir. 1996). In Grayson, the appellate panel refused to toll the limitations period for opt-in plaintiffs whose claims arose under the ADEA. The court reasoned that opt-in plaintiffs begin their civil actions under the ADEA “not when the Complaint is filed, but when the putative plaintiff files a written consent to opt-in to the class action.” Id. at 1105.
In light of the ongoing circuit split, the Federal Circuit’s decision in Bright provides another compelling argument in support of the Third Circuit’s tolling analysis. Whereas the Third Circuit allowed tolling because it did not frustrate the purposes underlying statutes of limitations, the Federal Circuit further concluded that tolling also promotes the objectives of class action procedures by discouraging multiplicity of suits. Undoubtedly, it has also given plaintiffs the added benefit of extra time to organize and certify their putative classes.
Note: the Court of Federal Claims is a court of nation-wide jurisdiction empowered to adjudicate most suits for money claims against the federal government. In the class action context, the Court of Federal Claims uses RCFC 23 (Rule of the United States Court of Federal Claims 23) which is modeled after Federal Rule of Civil Procedure 23. However, they differ in several important ways. For example, RCFC 23 addresses only opt-in classes, not opt-out, declaratory, or injunctive classes. For more information on the Federal Court of Claims see here.