After the Supreme Court denied class certification to female Wal-Mart employees in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) on the grounds that plaintiffs were unable to demonstrate any “nationwide” policy or practice of discrimination, Wal-Mart employees began to press their gender discrimination claims in a spate of narrower, regionally-focused class-action suits in hopes that narrowing the prospective class would increase their odds of certification. Among these was Phipps v. Wal-Mart Stores, Inc., 3:12-cv-1009 (M.D. Tenn. Filed Oct. 2, 2012), which targeted policies and management decisions in a Wal-Mart region centered on Tennessee, with portions of surrounding states included. The district court dismissed the suit as time-barred, and this week in Phipps v. Wal-Mart Stores, Inc., the Sixth Circuit reversed.

In its decision, the Sixth Circuit rejected a “bright-line rule” that would have “prohibit[ed] . . . tolling for any purported class action brought after a previous denial of class certification.” Normally, the filing of a class-action tolls the statute of limitations for all members of the putative class. The tolling ends if the court declines to certify the class. At that point, putative class members can intervene or file their own suits. In an earlier case, Andrews v. Orr, 851 F.2d 146 (1988), the Sixth Circuit had held that such “tolling” does not apply to “additional class actions by putative members of the original asserted class,” but only to individual claims. In Phipps, the Sixth Circuit held that, as long as no “previous court” had denied certification of the specific class being proposed in the subsequent class action, the statute of limitations would be tolled by the previous suit. The Court acknowledged that a prior denial of certification could potentially be preclusive on certain issues in the new action, but left such questions to be decided on a case-by-case basis under “existing principles . . ., such as stare decisis and comity among courts.”

With several similar suits pending in other circuits, it will be interesting to see how the tolling doctrine evolves and what influence this week’s Sixth Circuit decision will have.