It’s not all that often that a federal court of appeals reverses an order granting class certification in an unpublished opinion—much less the Ninth Circuit. But a panel of that court just did so last week in holding that a district court erred in certifying a class of workers because of Kuwait’s statute of repose. Lee v. ITT Corp., No. 12-35375 (9th Cir. July 24, 2013).
The plaintiffs, who worked in Kuwait for ITT Corporation, brought a class action alleging overtime-pay claims on behalf of all individuals working in Kuwait for ITT or its subsidiaries under a particular contract. The district court for the Western District of Washington agreed that the law of Kuwait governed the substance of the plaintiffs’ claims, but believed that Washington’s six-year statute of limitations applied rather than the one-year Kuwait statute of repose. Applying the longer, six-year period would mean that none of the putative class members’ claims were untimely.
The Ninth Circuit reversed, concluding that while Washington allows an “escape hatch” to avoid another jurisdiction’s “substantially different” statute of limitations when the claimant lacked “a fair opportunity to sue,” that principle did not apply to statutes of repose. Moreover, the panel concluded, there was nothing unfair about applying the Kuwaiti statute of repose, as the one-year period is similar to the amount of time many U.S. states allow for certain kinds of claims, some absent class members had stated that they were aware of the claims during the one-year period, and the named plaintiffs themselves had been able to bring suit during the one-year time frame.
Perhaps most significant, the Ninth Circuit pointed out that it could not tell “how many class members would be affected by applying the Kuwaiti statute” of repose, and therefore vacated the class-certification order.
The difference between a statute of repose and a statute of limitations was critical to the resolution of the appeal. As one of my colleagues discussed in a recent blog post, statutes of repose create an absolute right to be free from liability, whereas statutes of limitations sometimes can be tolled (for example, under the American Pipe doctrine). This case, of course, involved a statute of repose. Accordingly, the fact that the named plaintiffs had sued within the one-year deadline did not stop the clock for absent class members.
The decision also seems to indicate that class certification will be difficult when a statute of repose creates an absolute bar to liability for certain putative class members, because individualized inquiries will be necessary to determine whether any particular class member had timely asserted his or her claim.