Earlier this year, the Supreme Court in China Agritech Inc. v. Resh conclusively established that equitable tolling of the statute of limitations for putative class members – known as American Pipe tolling – applies only to class members’ individual claims, and not to later-filed class claims (sometimes referred to as “piggyback” class actions). (We discussed China Agritech and its import in a previous blog post.) Last week, the Third Circuit applied China Agritech and upheld the dismissal of an attempted piggyback class claim in Weitzner v. Sanofi Pasteur, Inc. Of interest, the court also rejected a novel argument advanced by the plaintiffs: that American Pipe tolling can be used to save otherwise time-barred claims by plaintiffs who were named plaintiffs in a previous failed class action.
Weitzner involved a Pennsylvania physician and his wholly owned professional corporation, which were sent two unsolicited faxes in 2004 and 2005. The physician filed a state court class action alleging violation of the Telephone Consumer Protection Act (TCPA); the state court denied class certification in 2008. Rather than continue to pursue his individual claim in state court (a claim that apparently was never finally dismissed), Dr. Weitzner and his P.C. instead filed a TCPA class action in federal court in 2011 against the same defendants and involving the same unsolicited faxes. Recognizing that plaintiffs’ claims were time-barred unless American Pipe tolling applied, the district court granted summary judgment for defendants on limitations grounds, and plaintiffs appealed.
The Third Circuit held that China Agritech foreclosed any argument that the statute of limitations could be tolled as to plaintiffs’ class claims and that summary judgment was properly granted as to those claims. China Agritech requires this result, but we remain gratified that the Supreme Court’s clear rule applies even in courts (such as the Third Circuit) that had allowed piggyback class actions prior to China Agritech.
In light of prior jurisprudence, the Third Circuit’s additional holding is also noteworthy. The court rejected plaintiffs’ arguments that the statute of limitations could be tolled for Dr. Weitzner’s and his P.C.’s individual claims. The court acknowledged that certain language from American Pipe arguably supported plaintiffs’ position. After all, Weitzner and his P.C. were putative class members in the state court class action, and American Pipe ostensibly applies to “all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.” Despite this broad language, the court recognized that applying tolling to a named plaintiff served neither of the rationales for the American Pipe rule, efficiency and protection of the interests of unknowing class members. In the end, the court held, tolling the statute of limitations for a named plaintiff – who had already asserted his claim, and could have pursued it in the earlier litigation – “serves no legitimate purpose.” As for the P.C., the Third Circuit noted that the doctor was its sole shareholder, and held that it was “not the type of unaware, absent class member American Pipe was designed to protect.”
Standing alone, Weitzner can be seen as an unremarkable case: How many plaintiff’s lawyers would try to argue with a straight face that asserting claims on a class basis tolls the statute of limitations and allows for the reassertion of those same claims by the same named plaintiff individually in another case? Still, seeking a second bite at the apple in a different court is far from unheard of, and this argument – illogical as it seems – has been made before.
Even beyond the specifics of the arguments and holdings of Weitzner, the early impact of China Agritech is positive. The Third Circuit got the Supreme Court’s message and quite rightly declined the invitation to expand American Pipe far beyond its original purpose and rationale. We are optimistic that further creative adventures in class action equitable tolling will receive similar treatment in other courts.