Thursday, August 15, 2013

FYI: 2nd Cir Rules 4-Yr Federal Catch-All SOL Applied to TCPA Claim In Fed Ct, American Pipe Tolling Does Not Extend to Appeal of Denial of Class Status

The U.S. Court of Appeals for the Second Circuit recently held that:  (1) federal law -- rather than state law -- supplied the appropriate statute of limitations period as to a putative class action brought under the Telephone Consumer Protection Act in federal court; and  (2) American Pipe tolling extends only through a lower court's initial denial of class status, and not also through an appeal of that of that ruling.  


A copy of the opinion is available at:  Link to Opinion


An individual (the "plaintiff") attempted to bring a putative class action under the Telephone Consumer Protection Act, 47 U.S.C. Sec. 227 ("TCPA"), in connection with an unsolicited fax advertisement.  After filing several actions asserting the same claim that were either withdrawn or dismissed, one of which involved a rejection of the plaintiff's attempted putative class claims and related dismissal for lack of subject matter jurisdiction, the plaintiff filed the instant action in U.S. District Court for the District of Connecticut. 


The lower court held that the plaintiff's filing was untimely.  Plaintiff appealed.  The Second Circuit agreed, finding that Connecticut law supplied the appropriate statute of limitations period, which had run at the time the instant action was filed.  


The plaintiff again appealed.  The U.S. Supreme Court vacated the Second Circuit's disposition, and remanded the matter for consideration consistent with its decision in Mims v. Arrow Financial Services, LLC, 132 S. Ct. 740 (2012) ("Mims"). 


On remand, the Second Circuit began by analyzing whether federal or state law applied the applicable limitations period.  


As you may recall, 28 U.S.C. Sec. 1658(a) provides that "[e]xcept as otherwise provided by law, a civil action arising under an Act of Congress...may not be commenced more than 4 years after the cause of action accrues." 


The TCPA does not contain a statute of limitations, but provides that "[a] person or entity may, if otherwise permitted by the laws or rules of court or a State, bring [an action] in an appropriate court of that State."  Sec. 227(b)(3). 


The Second Circuit began its analysis by noting that it had previously construed the "if otherwise permitted" language above as creating an exception to the 4-year limitations period provided by 28 U.S.C. Sec. 1658(a).  However, the Second Circuit explained that the Supreme Court's holding in Mims compelled the conclusion that "to vindicate the significant federal interest reflected in the TCPA and to ensure uniformity, TCPA claims in federal court are not subject to the vagaries of state law."  Accordingly, the Second Circuit held that the 4-year limitations period under 28 U.S.C. Sec. 1658(a) governs the instant action, rather than limitations period provided for by state law. 


Having determined the applicable limitations period, the Second Circuit analyzed the facts at issue here.  It noted that the plaintiff filed his action more than four years after he received the fax at issue, but that the plaintiff contended that the limitations period was tolled. 


As you may recall, American Pipe and Construction Co. v. Utah provides that "the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class..."  414 U.S. 538, 554 (1974). 


The Second Circuit noted that it had not yet had occasion to determine the scope of American Pipe tolling, but that every other federal circuit court that had examined the question held that "American Pipe tolling ends upon denial of class certification."  The Second Circuit reached the same conclusion as its sister circuits.


The plaintiff argued that the fact that he appealed the lower court's denial of class certification should further toll the limitations period.  However, the Second Circuit noted that denials of class certifications are rarely reversed, and therefore concluded that "the remote possibility of reversal of the district court's denial of class status" was not sufficient to toll the applicable limitations period further.  The Second Circuit also emphasized the need for a "bright-line rule in this area of law" in reaching its decision. 


Accordingly, the Second Circuit determined that because the plaintiff's appeal did not toll the limitations period, the instant action was filed after the 4-year limitations period under 28 U.S.C. Sec. 1658(a) had run.  It therefore affirmed the decision of the lower court. 





Ralph T. Wutscher
McGinnis Wutscher Beiramee LLP
The Loop Center Building
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Chicago, Illinois 60602
Direct: (312) 551-9320
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