CLASS CLAIMS BY PRIOR WAL-MART V. DUKES CLASS MEMBERS DEEMED UNTIMELY

by Art Gutman Ph.D., Professor, Florida Institute of Technology

The case is Phipps v. Wal-Mart, decided on 2/20/13 by Judge Aleta A. Trauger of the District Court for the Middle District of Tennessee, Nashville Division [2013 U.S. Dist. LEXIS 22684]. This is a complex ruling, so I will provide the major highlights. In a nutshell, Wal-Mart argued that class claims by former members of the larger class in Wal-Mart v. Dukes should be dismissed because prior precedents established in American Pipe & Construction Co. v. Utah (1974) [414 U.S. 538] and Crown, Cork & Seal Co. v. Parker (1983) [462 U.S. 345] in which the Supreme Court supported tolling of individual claims among class members when class certification is pending. For example, in the American Pipe case, the Supreme Court unanimously ruled, among other things:

(1) at least where class action status has been denied solely because of failure to demonstrate that the class is so numerous that joinder of all members is impracticable, the commencement of the original class suit tolls the running of the statute of limitations for all purported members of the class who make timely motions to intervene after the court has found the suit inappropriate for class action status;
(2) that the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the action been permitted to continue as a class action;
(3) that the mere fact that a federal statute providing for substantive liability also sets a time limitation upon the institution of suit does not restrict the power of the federal courts to hold that the statute of limitations is tolled under certain circumstances not inconsistent with the legislative purpose 

    Thus, is it clear that individual claims are tolled, but there is nothing in the Supreme Court rulings about tolling class claims.

    The Phipps plaintiffs were class members in the Wal-Mart v. Dukes case in which class certification was overturned by the Supreme Court. The current ruling by Judge Trauger is that under 6th Circuit precedent, tolling does not extend to “follow-on” class action claims, “even if the plaintiffs are proposing a different or narrower class than the previous court-rejected class.” Interestingly, the same ruling was applied by the district court in Texas (Odle v. Wal-Mart [2013 U.S. Dist. LEXIS 1879]), but not by the district court in California (Dukes v. Wal-Mart [2013 U.S. Dist. LEXIS 5411]). Also of interest, Judge Trauger herself suggested that maybe the 6th Circuit should reconsider that precedent.

    Like I said … very complex, and these are just the highlights. Somewhere down the road, the Supreme Court may be forced to decide the tolling of class actions for such “follow-on” cases.

    Stay in the Know!