Concluding that the Menominee Indian Tribe of Wisconsin (the “Tribe”) failed to justify its untimely filing under the equitable tolling doctrine, a recent U.S. Supreme Court decision reaffirms stern limitations on the doctrine’s application. On January 25, 2016, the Court unanimously ruled, in Menominee Indian Tribe of Wisconsin v. United States, U.S., No. 14-510, that equitable tolling applies to a statute of limitations only if the litigant establishes two distinct elements: (1) that he diligently pursued his rights, and (2) that extraordinary circumstances beyond the litigant’s control prevented timely filing. The Court held that the Tribe’s proffered excuses—namely, its mistaken belief that it was entitled to class-action tolling during the pendency of parallel putative class case, and its belief that filing earlier would have been futile—did not satisfy the extraordinary-circumstance prong of the equitable tolling test because neither amounted to an external obstacle outside of the Tribe’s control. Although the Court’s finding in Menominee is not unexpected, its opinion narrows the equitable tolling doctrine’s application and may encourage wary plaintiffs to file duplicative actions for individual claims as a precaution against feared unavailability of class-action tolling.
Overview of the Case
The Menominee litigation arises out of a longstanding dispute concerning the federal government’s alleged obligation to pay “contract support costs” to various tribes under the Indian Self-Determination and Education Assistance Act (“ISDA”). ISDA helps tribes exercise control over aid programs benefiting their members by allowing “self-determination contracts” between the tribes and federal agencies. Under these contracts, a tribe assumes full responsibility for operating the program and, in exchange, the government pays the tribe the money it would have otherwise spent on the program, including reimbursement of contract support costs such as additional administrative and overhead expenses. The Contract Dispute Act of 1978 (“CDA”) applies to disputes arising under ISDA and requires the parties to present contract claims to a contracting officer within six years of accrual.
In 2005, the Tribe presented its contract claims alleging that federal government had failed to pay contract support costs for years 1995 through 2004. Citing the CDA’s six-year statute of limitations, the contracting officer denied all claims based on pre-1999 contracts.
The Tribe challenged the denial in the U.S. District Court for the District of Columbia, claiming that class-action and equitable tolling theories rendered its claims timely. The Tribe asserted two general arguments. First, the Tribe claimed it reasonably, although incorrectly, assumed a putative ISDA class action brought by the Cherokee Nation tolled the limitations period through 2005. Second, the Tribe argued that it would have been futile to present its claims to the contracting officer before the Supreme Court issued its 2005 decision in the Cherokee Nation case. The district court ultimately rejected the Tribe’s arguments, finding the proffered excuses did not amount to an extraordinary circumstance warranting equitable tolling, and granting summary judgment in favor of the government on pre-1999 contract claims.
The Court of Appeals affirmed and explained that, to support equitable tolling, an extraordinary circumstance must be beyond the litigant’s control—not the product of the litigant’s own mistake of law or litigation strategy. The decision created a spilt with the Federal Circuit, which had permitted equitable tolling under materially similar facts. The U.S. Supreme Court granted certiorari to resolve the conflict.
The Supreme Court’s Decision
Justice Samuel Alito delivered the unanimous opinion of the Court. The opinion examines the equitable tolling doctrine, rejects the Tribe’s bid for application of the doctrine, and affirms the judgment of the Court of Appeals.
Examining the doctrine, the Court first explains that the standard for equitable tolling, as articulated in Holland v. Florida, 560 U.S. 631, 649 (2010), applies only if a litigant establishes two separate elements: (1) that he has diligently pursued his rights, and (2) that “some extraordinary circumstance stood in his way and prevented timely filing.” The Court notes that it has consistently characterized and treated these components as distinct elements, “not merely factors of indeterminate or commensurable weight.” As such, the Court firmly rejects the Tribe’s argument that it should consider the components together as factors in a unitary test. Next, the Court concludes that only circumstances beyond the litigant’s control can satisfy the extraordinary-circumstance prong. Requiring a litigant to show that an “external obstacle” prevented his timely filing is not an “overly rigid per se approach,” Justice Alito writes, it merely reflects the requirement that a litigant establish that “some extraordinary circumstance stood in his way.” Simply put, a litigant who stood in his own way is not entitled to equitable tolling.
Applying the standard, the Court finds none of the Tribe’s excuses for delayed filing—i.e., its mistaken reliance on the putative class action or its belief that presentment was futile— could satisfy the extraordinary-circumstance prong. The Tribe had unilateral authority to timely present its claims. Its erroneous reliance on the putative class action originated from its incorrect belief that courts would apply the reasoning of single trial court’s class certification order. Likening the Tribe’s mistake of law to a “garden variety claim of excusable neglect,” the Court concludes that the Tribe’s mistake was neither extraordinary nor beyond the Tribe’s control. The Court dismisses the Tribe’s futility argument as “even less compelling.” The Tribe’s belief that pre-2005 presentment was futile could not constitute an external obstacle; it was merely an outgrowth of the same mistake of law that caused the Tribe’s to incorrectly rely on the putative class action. Further, the Court reasons, because litigants commonly face significant litigation costs, limited financial resources, and uncertain legal landscapes, these circumstances resulting in perceived futility were not extraordinary.
Because the Tribe could not satisfy the extraordinary circumstances prong, the Court finds it unnecessary to examine whether the Tribe diligently pursued its rights and affirms the judgment of the Court of Appeals.
Implications of the Decision on Future Litigants:
Although the Court’s decision comes as no surprise—indeed, every justice who spoke at oral argument seemed dubious of the Tribe’s decision to delay presenting its claims—the terse opinion is noteworthy for its limitations on equitable-tolling arguments available to litigants. For example, the Court’s finding that the test requires satisfaction of two distinct elements, rather than weighted factors, dissuades any notion that particularly sympathetic facts establishing one element may supplement sparse support for the other. Also, the Court’s swift dismissal of the Tribe’s mistake-of-law argument underscores the need for litigants relying on the advice of counsel to obtain thoroughly reasoned assessments of the legal determinations underlying such advice. Moreover, although the Court declines to consider whether a mistake of law could ever create an extraordinary circumstance, the ruling encourages litigants to err on the side of caution and initiate their action if presented with legal uncertainties affecting timeliness.
The Court’s opinion may also encourage wary members of putative class actions to file duplicative suits asserting individual claims based on fears that class-action tolling will not be available if some later ruling excludes them from the class. The Tribe raised concerns regarding this possible, unintended consequence, and urged the Court to allow equitable tolling for later-excluded litigants who reasonably and justifiably rely on class-action tolling. Perhaps due to the limited scope of review or the overtly hypothetical underpinnings of the Tribe’s argument, the Court’s opinion does not address the later-excluded-litigant hypothetical. However, the Court’s firm rejection of the Tribe’s mistake-of-law argument may incentivize the cautious plaintiff to closely monitor his membership in a putative class and to promptly sue on individual claims in the event such membership becomes uncertain.