Collision Course: How Federal Rule of Civil Procedure 23(f) Has Silently Undermined the Prohibition on American Pipe Tolling During Appeals of Class Certification Denials

• Author: Kevin Welsh
• Pages: 1183-1225

Collision Course: How Federal Rule of Civil

Procedure 23(f) Has Silently Undermined the

Prohibition on American Pipe Tolling During Appeals

of Class Certification Denials

INTRODUCTION

At first glance, the Fifth Circuit’s decision in Calderon v.

Presidio Valley Farmers Association1 is unremarkable. Calderon, a

class action brought on behalf of a group of Mexican farm workers,

arose from numerous alleged violations of the Farm Labor

Contractor Act.2 Although the Western District of Texas initially

denied the plaintiffs’ motion for class certification, the Fifth Circuit

agreed to hear an interlocutory appeal on the question and, phrasing

its decision diplomatically, “invited” the district court to reconsider

the issue.3 This victory, however, would be short-lived for a small

group of class members.

A group of then unnamed plaintiffs submitted class claim forms

following the Western District of Texas’s decision to certify a class.4

Surprisingly, though, the district court held that the unnamed

plaintiffs’ claims were now time-barred, despite their initial

timeliness.5 Indeed, the unnamed plaintiffs’ claims became untimely

in the period between the initial, erroneous denial of class

certification and the subsequent decision to certify the class.6 The

untimeliness of the plaintiffs’ claims was a result of the rules on

class action tolling, the jurisprudential doctrine which holds that the

filing of a class action suspends the running of a claim’s statute of

limitations against all putative members of the class.7 The Fifth

Circuit affirmed that the tolling effect ceased upon the denial of

class certification and began again when the class was certified.8

Because the plaintiffs failed to intervene in the action or file

independent actions during the period between the initial class

certification denial and its subsequent reversal, the statute of

Copyright 2013, by KEVIN WELSH.

1. 863 F.2d 384 (5th Cir. 1989) (per curiam).

2. Id. at 386.

3. Id. at 389.

4. Id. at 390.

5. Id.

6. See id.

7. See, e.g., Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 350 (1983).

The tolling of a statute of limitations is e quivalent to a suspension of prescription

under Louisiana law. Compare id., with LA. CODE CIV. PROC. art. 596 (2012).

8. See Calderon, 863 F.2d at 390.

1184 LOUISIANA LAW REVIEW [Vol. 73

limitations continued to run and the claims became untimely.9 Thus,

despite the timeliness of the initial action and appropriate notice to

the defendants,10 the unnamed plaintiffs lost the ability to state a

claim against the defendant solely because the district court initially

and erroneously decided against class certification.11 This situation

is undoubtedly a “worst case scenario” under the widely held notion

that procedure alone should not, without good reason, foreclose on a

party’s ability to argue a claim’s merits.12

The loss that the Calderon plaintiffs suffered is the most

egregious consequence of the widely followed judicial policy of

ending a class action’s tolling effect immediately upon a district

court’s denial of class certification.13 In the past, some courts have

examined the policy and concluded that the realistic costs of tolling

beyond the denial of class certification were simply too high—

tolling would often extend through final judgment, which may come

years after a class certification decision, thereby forcing defendants

to defend stale claims.14 The prospect of multiyear tolling arose

from the historical difficulty of achieving interlocutory review of

class certification decisions.15 However, the entire landscape of

interlocutory appeals in this area was altered in 1998 b y the

promulgation of Federal Rule of Civil Procedure 23(f), which

provides a special mechanism for nearly immediate appellate review

of class certification decisions.16 To date, federal circuit courts of

appeal have not responded to the fact that Rule 23(f) seriously

9. See id.

10. A properly pled class action complaint is commonly understood to give a

defendant notice of the type and number of claims that he or she faces. See Am.

Pipe & Constr. Co. v. Utah, 414 U.S. 538, 554–55 (1974).

11. See Calderon, 863 F.2d at 390.

12. See, e.g., TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 695 (9th Cir.

2001) (noting that there is an “overriding judicial goal of deciding cases correctly,

on the basis of their legal and factual merits”); Foman v. Davis, 371 U.S. 178, 182

(1962) (“If the underlying facts or circumstances relied upon by a plaintiff may be

a proper subject of relief, he ought to be afforded an opportunity to test his claim

on the merits.”).

13. See, e.g., Stone Container Corp. v. United States, 229 F.3d 1345, 1355

(Fed. Cir. 2000); Nelson v. Cnty. of Allegheny, 60 F.3d 1010, 1013 (3d Cir.

1995); Calderon, 863 F.2d at 390; Armstrong v. Martin Marietta Corp., 138 F.3d

1374, 1390 (11th Cir. 1998) (en banc); Taylor v. United Parcel Serv., Inc., 554

F.3d 510, 519–21 (5th Cir. 2008); Nat’l Asbestos Workers Med. Fund v. Phillip

Morris, Inc., No. 98 CV 1492, 2000 WL 1424931, at *1–2 (E.D.N.Y. Sept. 26,

2000); Andrews v. Orr, 851 F.2d 146, 149–50 (6th Cir. 1988).

14. See Armstrong, 138 F.3d at 1390.

15. See infra Part I.B.1. The interlocutory appeal in Calderon was an

exception to this general rule.

16. See infra Part I.B.3.

2013] COMMENT 1185

undermines the logic of ceasing tolling upon the denial of class

certification.17

This Comment argues that the policy of ending tolling

immediately upon the initial denial of class certification contradicts

the very purposes of class action tolling and can lead to prejudicial

results, as Calderon demonstrates. Part I of this Comment examines

the development of class action tolling and the evolution of

interlocutory appeals of class certification decisions. Part II explores

the interrelationship between class action tolling and interlocutory

appeals of class certification rulings b y discussing bellwether

decisions on the issue, including the opinions that have linked the

tolling policy observed in Calderon to the historical rarity of

interlocutory appeals. Part III challenges the current jurisprudence

on the grounds that it incentivizes many behaviors that Rule 23 and

class action tolling seek to avoid, fails to recognize the vast changes

in interlocutory appellate practice ushered in by Rule 23(f), causes

litigants to be treated unequally due to an initial, erroneous

certification decision, and fails to protect plaintiffs from Calderon-

like prejudice. Part IV of this Comment proposes an alternative

approach to the issue’s current jurisprudential treatment.

Specifically, it argues that tolling should continue through the time

period available for requesting interlocutory review of a class

certification decision under Rule 23(f) and, where a circuit court

grants review, through final resolution of the certification issue. This

proposal, which is based in part on the approach taken by

Louisiana’s Code of Civil Procedure, simultaneously protects

plaintiffs from unnecessary harm, evens the pretrial playing field,

and furthers Rule 23’s goals of efficiency and economy in litigation.

Finally, Part IV contextualizes the proposed rule by assessing recent

scholarship on class action tolling.

I. THE LANDSCAPE

A. The Class Action and Statutes of Limitations

The class action’s defining characteristic is representation.18

Class actions depend on a legal fiction that instructs courts to treat

unnamed class members as if they were named parties in the

action.19 Indeed, Rule 23 “both permits and encourages class

17. See infra Part II.

18. Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 550 (1974) (“A federal

class action is . . . truly [a] representative suit . . . .”).

1 9. State Farm Mut. Auto Ins. Co. v. Boellstorff, 540 F.3d 1223, 1229 (10th

Cir. 2008).