SAWYER v. ATLAS HEATING AND SHEET-METAL WORKS (May 26, 2011)

On May 18, 2009, Park Bank filed a state-court class action against Atlas Heating and Sheet-Metal Works. It alleged that Atlas' December 9, 2005 unsolicited facsimile violated the Telephone Consumer Protection Act. In March of 2010, after the Act's four-year statute of limitations had run, Park Bank voluntarily dismissed its claim. Isaac Sawyer, another facsimile recipient, was unsuccessful in his attempts to intervene in the suit. Sawyer filed his own class action on March 19. Atlas removed the case to federal court and moved to dismiss on statute of limitations grounds or to at least limit the action to an individual one. Judge Adelman (E.D. Wis.) denied the motion on the ground that the limitations period was tolled while the Park Bank suit was pending. Atlas appeals.

In their opinion, Chief Judge Easterbrook and Judges Flaum and Sykes affirmed. The Court noted that the Supreme Court, in American Pipe, held that the filing of a class action tolls the statute of limitations as to all persons who would have been class members. Atlas contends that American Pipe does not control because: a) the first suit was voluntarily dismissed, b) the first suit was filed in state court, and c) the first class was never certified. The Court rejected each of these attempts to distinguish American Pipe. The statute of limitations was tolled and Sawyer's complaint is timely. The Court next addressed whether Sawyer was limited to an individual complaint instead of a class action. The district court had identified a conflict among the circuits on that question. The Court found no conflict. The cases Atlas identified presented not questions related to tolling, but questions related to the preclusive effect of a Rule 23 decision in the earlier case. If, for example, the court in the first case denies certification on numerosity grounds, that ruling would be binding on the later-filed action and preclude class certification. On the other hand, a denial because the class representative was inadequate would not bind other class members from pursuing certification. Here, Park Bank dismissed its complaint before the first court even ruled on certification. Sawyer is free to pursue class certification in his case.