Classified contributors have blogged numerous times (including several times this year) on opinions that tested the boundaries of American Pipe tolling, including those that addressed whether the doctrine applies to claims barred by an applicable statute of repose, successive putative class actions, and cross-jurisdictional litigation. Sometimes, however, litigants forget the well-established rules of American Pipe tolling in their circuit. In a pair of related decisions, the Eastern District of Michigan reminded absent class members of a longstanding, albeit minority Sixth Circuit rule – that filing an individual suit before a ruling on class certification forfeits the benefit of American Pipe tolling.
On May 10, plaintiffs Knight and Keyes filed separate individual lawsuits against Ocwen Loan Servicing alleging the company violated the Telephone Consumer Protection Act (TCPA) by making automated debt collection calls to their respective cell phones more than 1,000 times between 2011 and 2015 after each plaintiff orally revoked permission to receive such calls. Ocwen moved to dismiss on grounds that included: plaintiffs’ claims before May 10, 2013 were time-barred under the four-year TCPA statute of limitations. Plaintiffs responded that the pendency of a putative class action against Ocwen filed on October 27, 2014 and in which they were absent members tolled their claims under American Pipe. Ocwen replied that plaintiffs were not entitled to American Pipe tolling because they filed their individual suits before a decision on class certification had been issued in that related action.
The district court granted Ocwen’s motion. The court began its analysis with American Pipe itself, in which the Supreme Court held that the commencement of a federal class action tolls the applicable statute of limitations as to all absent class members until a court decides that class action treatment is inappropriate. The court then cited Wyser-Pratte Mgmt. Co. v. Texlon Corp., 413 F.3d 553 (6th Cir. 2005) for the rule that plaintiffs in the Sixth Circuit forfeited the benefit of class action tolling by filing suit before the decision on class certification. The court held that Wyser-Pratte was controlling law even though it conceded the Second Circuit had overturned the district court case that the Wyser-Pratte court had found persuasive. See In re WorldCom Sec. Litig., 496 F.3d 245 (2d Cir. 2007)(concluding that American Pipe tolling applies to plaintiffs who file individual actions while class certification is pending).
While the court acknowledged that Wyser-Pratte was the minority rule among the circuits because the Ninth and Tenth had subsequently followed the Second, it issued the following reminder: “[I]n the Sixth Circuit, plaintiff’s claims are not tolled where plaintiffs file independent law suits during the pendency of a class certification decision.”