Supreme Court statute of limitations doctrine takes its toll on defendants
Eons Ago…
American Pipe & Construction Co. v. Utah, a 1974 class action that made its way to the Supreme Court, recently cast its shadow over a Telephone Consumer Protection Act (TCPA) class action in the District of Minnesota – and, by extension, many other similar cases.
The doctrine that flowed from the American Pipe decision more than 40 years ago is simple: When a class action begins, the statute of limitations is suspended for all members belonging to the class in question, even if the class action fails to move ahead.
In the original case, a suit brought by the state of Utah was not allowed to move forward as a class action; the district court then maintained that the putative class members could not sue on their own because their claims were barred by the statute of limitations. Upon review, the Supreme Court ruled that the launch of the class action tolled the statute of limitations for putative class members, who would be allowed to enter a suit.
Ocwen’s Rager
The current TCPA case in question, Christianson v. Ocwen Loan Servicing, presents a set of familiar facts: Minnesota resident Shelly Christianson claims to have received more than 1,400 calls from Ocwen’s automatic telephone dialing system from April 2011 through April 2014. Before that period, she claims that she had requested that the company cease contacting her, to no avail. She sued under the TCPA in May 2017.
In the initial complaint, Christianson cites the American Pipe decision, noting that the normal four-year statute of limitations under the TCPA was tolled by the commencement of a class action brought in 2014 by another individual against Ocwen.
Ocwen’s latest motion to dismiss, filed in May 2018, argued that subsequent cases suggested that American Pipe “does not toll the limitations period for individual actions brought by members of the class while the class still exists.”
Citing multiple decisions, including Second and Ninth Circuit Court decisions, the court dismissed Ocwen’s argument and denied its motion.
The quoted Ninth Circuit Court decision is especially concise, stating that “although the American Pipe doctrine protects plaintiffs from being forced to file suit before the certification decision, that doesn’t mean that plaintiffs who file before certification are not entitled to tolling. They have a right to file at the time of their choosing and denying tolling would diminish that right.”
The Takeaway
TCPA plaintiffs again seem to have the law on their side, with the statute of limitations paused whenever a class action is brought against their prospective opponent. And given the volume of TCPA class actions, one must wonder how meaningful the four-year limit is in practice.
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