The U.S. Court of Appeals, Third Circuit recently refused to toll a plaintiff’s Telephone Consumer Protection Act (TCPA) claims based on allegedly illegal faxes that were sent in 2005.
According to Dr. Ari Weitzner and his medical practice, Sanofi Pasteur, the vaccines division of the pharmaceutical company Sanofi, and VaxServe, Inc., a healthcare supplier, sent two faxes on April 21, 2004, and March 22, 2005, to a fax machine located in Weitzner’s office. On behalf of himself, his medical office and a putative class action, Weitzner filed suit against Sanofi and VaxServe in Pennsylvania state court.
In June 2008, the state court denied class certification, and the case proceeded as an individual action. There has yet to be a final judgment in the state court case.
The plaintiffs filed a nearly identical case in Pennsylvania federal court in November 2011 based on the same faxes. The defendants moved for summary judgment, pointing out that the four-year federal default statute of limitations applies to claims under the TCPA, and the federal suit was therefore untimely.
Relying on the 1974 U.S. Supreme Court decision in American Pipe & Construction Co. v. Utah, Weitzner pointed to his 2005 state court action to argue that the statute of limitations should be tolled. Under American Pipe, the timely filing of a class action tolls the applicable statute of limitations for putative class members until the propriety of maintaining the class is determined.
The district court disagreed and granted summary judgment in favor of the defendants. Weitzner appealed, raising three categories of claims that the plaintiff argued were each timely under American Pipe: purported class claims, Weitzner’s individual claims; and the individual claims of his medical office, Weitzner P.C.
But the Third Circuit found American Pipe’s tolling doctrine inapplicable to all of the categories. The application of the standard to the plaintiff’s class claims was the easiest to resolve in light of last year’s Supreme Court decision in China Agritech, Inc. Resh.
There, the justices explained that the “efficiency and economy of litigation” that supports the tolling of individual claims under American Pipe does not support the maintenance of untimely successive class actions. If the limitations period for follow-on class actions was also tolled, the time for filing class suits “could be limitless,” the Court said, instead limiting American Pipe to allow class members to file only individual claims after a denial of class certification.
“Because plaintiffs’ class claims are untimely absent tolling, and China Agritech precludes the application of American Pipe tolling to such successive class claims, we conclude that plaintiffs’ class claims are not subject to tolling and are therefore untimely,” the Third Circuit wrote.
The question of whether American Pipe applies to Weitzner’s individual claims was less straightforward, the court said. On initial review, the broad language of American Pipe appeared to provide for the tolling of claims of both named plaintiffs and unnamed putative class members in the initial class action.
“The purpose of American Pipe tolling and subsequent decisions, however, make clear that tolling does not protect named plaintiffs,” the federal appellate panel said. Two primary purposes lie behind the American Pipe holding: the “efficiency and economy of litigation” and the need to protect the interests of putative unnamed class members who had not received notice and were unaware of the pending class action.
Named plaintiffs have already filed their claims, the court pointed out, and neither efficiency nor economy would be advanced by allowing them to rely on their own filings. Similarly, named plaintiffs are necessarily aware of the pending litigation and will be made aware of any denial of class certification such that tolling is unnecessary to protect their interests.
“Indeed, a named plaintiff’s individual claim will remain viable upon denial of class certification because the putative class action is then simply transformed into an individual action,” the court wrote. Subsequent Supreme Court opinions have confirmed this understanding of American Pipe, the panel said, including China Agritech.
“Given the equitable nature of American Pipe tolling, we discern no reason to extend its reach to named plaintiffs,” the Third Circuit declared. “Allowing named plaintiffs to file new individual claims outside the statute of limitations—when they can instead pursue their original, timely filed individual claims in the first case, after class certification has been denied—serves no legitimate purpose. Quite simply, no injustice results from denying those parties tolling. To the contrary, allowing an individual to file repetitive claims outside the statute of limitations would be an abuse of American Pipe and contrary to its underlying policy.”
Weitzner was therefore out of luck with regard to both his individual claim and that of his medical office.
“Although Weitzner P.C. may have been a putative class member in Dr. Weitzner’s state court action, it was not the type of unaware, absent class member American Pipe was designed to protect,” the court wrote. “Dr. Weitzner has always been the sole shareholder of Weitzner P.C., so there can be no dispute that Weitzner P.C. received actual notice of the pending state court action and of the denial of class certification in that case.”
The panel also noted that the medical office was the plaintiff in some of the 17 other TCPA cases filed by Weitzner, and “[a]s a result, the P.C. itself is an experienced TCPA litigant.”
“American Pipe created a generous tolling rule that applies broadly to protect putative class members in pending class actions,” the court said. “Yet the rule is not without limits. As the Supreme Court clarified in China Agritech, tolling does not apply to successive class actions under any circumstances. We now hold that American Pipe tolling does not allow individuals who were named plaintiffs in an initial class action to toll their own statute of limitations.”
To read the opinion in Weitzner v. Sanofi Pasteur, Inc., click here.
Why it matters: The Third Circuit opinion continues the victory momentum from last year’s China Agritech decision, placing limits on the application of American Pipe. The panel was clear: American Pipe tolling is “an equitable remedy that applies only when necessary to prevent injustice,” and courts should not permit tolling where doing so would result in an abuse of American Pipe. Allowing named plaintiff Weitzner and his solely owned medical office to toll their claims would result in an abuse of the remedy, the panel held. While unnamed class members may use tolling to bring individual claims after class certification fails, American Pipe is not a vehicle to get a second bite at the class action apple, and especially not for named plaintiffs to get such a second bite.