On Monday, January 22, 2018, the United States Supreme Court issued a decision that is significant to anyone practicing in the federal court system.
Title 28 of the United States Code Section 1367(d) allows for federal supplemental jurisdiction over state law claims. This statute, as now construed by the United States Supreme Court in Artis v. District of Columbia, holds that the statutes of limitations (“SOLs”) on any state law claims cease to run while the claims are in federal court. In other words, the act of filing in federal court acts as a “stop clock” on any limitation period applied to a state law claim. This means that, in the event the district court enters judgement on federal claims and the dismisses state law claims, i.e., declines to retain jurisdiction over them, plaintiffs will have ALL OF THE TIME REMAINING ON THE STATE SOLs THEY HAD AT THE TIME THE FEDERAL LAWSUIT WAS FILED – plus 30 days.
By way of example: The plaintiff files suit in federal court a few weeks after his or her alleged causes of action become ripe, and the complaint alleges a number of different causes of including common law claims of breach of a written contract (a six-year SOL in many states), negligent and intentional infliction of emotional distress (a three-year SOL in many states), etc., in addition to federal claims. The case moves along in the federal court system for several years. The district court ultimately grants summary judgment on the federal claims and declines to rule on or retain jurisdiction over the state law claims. The plaintiff fails to re-file the case immediately. The plaintiff waits beyond the one-year period set forth in the state accidental failure of suit statute (if applicable). You might think the case is dead, but you would be wrong. The plaintiff waits three years from the date of dismissal to bring a new complaint in state court (or even six years later for breach of contract!). Under this statute, as interpreted by the Court in Artis, the lawsuit is still timely, assuming at least a three-year limitations period applies.
The decision is somewhat surprising to the extent Chief Justice Roberts cast his vote with Justices Ginsburg, Breyer, Sotomayor and Kagan, rather than with the four dissenters – a group that included Justice Kennedy. Moreover, Chief Justice Roberts’s comments during oral argument largely failed to connote his support for the petitioner’s position; he twice suggested to the petitioner’s attorney that his arguments did not make much sense and further declared that it is “not a radical proposition to say” that the construction of the statute advanced by the petitioner imposes “a serious intrusion on the state,” which, in turn, raises “serious constitutional concerns.” (To read the Transcript, please click here.)
Notably, this decision reversed the district court and the DC Circuit Court of Appeals decisions against Artis and in favor of the District of Columbia. It is also counter to decisions in other states, including the California Supreme Court’s 2014 decision in City of Los Angeles v. County of Kern, 328 P.3d 56 (Cal. 2014), which indulged in an exhaustive discussion of Congressional intent and the impact on state sovereignty.