Takeaway: In Collins v. Village of Palatine, Ill., — F.3d —, 2017 WL 5490819, at *1 (7th Cir. November 16, 2017), the Seventh Circuit announced a “simple and uniform” rule for determining when a once-tolled statute of limitations starts running again: “Tolling stops immediately when a class-action suit is dismissed—with or without prejudice—before the class is certified.” Applying this rule in Collins, the Seventh Circuit upheld the district court’s dismissal of the class representative’s claim as time-barred (as well as its summary denial of class certification). The Seventh Circuit’s ruling brings clarity to this oftentimes confusing area of class action practice.

In August 2010, Jason Senne filed a class action against the Village of Palatine, after the Village issued him a parking ticket displaying his personal information. The suit alleged the parking ticket and disclosures on it violated the Driver’s Privacy Protection Act (“DPPA”). In September 2010, the district court granted the Village’s motion to dismiss for failure to state a claim, but in 2012 the Seventh Circuit reversed. On remand, the district court deferred ruling on Senne’s motion for class certification and instead invited the Village to file a motion for summary judgment. The Village obliged and the district court granted its motion, further ruling the class certification motion had been “terminated” as moot. This time, the Seventh Circuit affirmed the judgment, and the Supreme Court denied certiorari (on November 2, 2015).

But Senne’s attorney filed a successor class action the same day the Supreme Court denied certiorari (naming himself as the class representative). He filed the suit simply as a “placeholder” to preserve the claims of the class. He then filed another, independent class action naming another individual (Michael Collins) as the class representative. Like Senne, Collins claimed that a parking ticket issued by the Village violated the DPPA. The Village then moved to dismiss Collin’s claim as time-barred by DPPA’s four-year statute of limitations, since Collins’ parking ticket issued on June 14, 2007. In response, Collins argued that the limitations period was tolled from the time Senne filed his original suit in August 2010 until the time the Supreme Court denied Senne’s petition for certiorari in November 2015. Rejecting this argument, the district court dismissed the complaint as time-barred and summarily denied Collins’s motion for class certification (without stating any reason for the denial of certification).

The Seventh Circuit affirmed. The court observed that under American Pipe tolling (see American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974) and Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983)), “the filing of a proposed class action immediately pauses the running of the statute of limitations for all class members.” Collins, 2017 WL 5490819, at *3. The court then observed that these cases do not address whether tolling continues during the pendency of an appeal. After surveying the law in other circuits, the Seventh Circuit held that the “consensus view” is that the limitations clock immediately resumes once certification has been denied or upon “other procedural intervals,” such as when a class member opts out or the court dismisses a suit for lack of subject matter jurisdiction. Id. Finding no difference between these situations and the dismissal of an action with prejudice, the court held that American Pipe tolling does not continue during the pendency of an appeal of an action that has been dismissed with prejudice.