A federal district judge in the Northern District of Illinois (NDIL) decertified the class in a Telephone Consumer Protection Act (TCPA) case against Cirque du Soleil, relying on the recent Supreme Court decision in China Agritech, Inc. v. Resh.
In Practice Management Support Services, Inc. v. Cirque du Soleil Inc., defendant Cirque du Soleil was facing a third successive putative class action lawsuit filed by the same counsel based on the same allegedly unlawful fax transactions from 2009. The first was filed in August 2009 on behalf of a different named plaintiff in the NDIL; the second was filed in state court in April 2011.
In April 2012, because the plaintiff in that case was not allowed to add other Cirque du Soleil entities as defendants because of the plaintiff’s “inexcusable delay” in seeking to amend the complaint, it requested that the earlier federal case be dismissed without prejudice; but the court required that the plaintiff pay the defendants’ fees before it would allow dismissal without prejudice. Rather than paying fees, the plaintiff dismissed with prejudice. About two years later, the state court granted summary judgment for the defendants on res judicata grounds. Shortly thereafter, in March 2014, the same plaintiff’s law firm filed the third—and current—case, asserting the same TCPA claim based on the same faxes against the same defendant, but with a new class representative, Practice Management Support Services (Practice Management).
In November 2015, the district court denied Cirque du Soleil’s motion for summary judgment in the third lawsuit based on the four-year statute of limitations, applying then-governing precedent to find that Practice Management’s claims were tolled until the first federal class action was dismissed in April 2012. In March 2018, the court granted Practice Management’s motion for class certification but stayed the case at defendant’s request based on the Supreme Court’s then-forthcoming decision in China Agritech, Inc. v. Resh.
In June of this year, the Supreme Court unanimously ruled in China Agritech that a putative class action plaintiff may not launch (i.e., “stack”) a new class action lawsuit after an earlier court denies class certification if the applicable statute of limitations has run in the latter suit. Under the anti-stacking ruling announced in China Agritech, equitable tolling is available for individual claims for efficiency and economy of litigation purposes, but such policy rationales do not support the maintenance of untimely successive class actions and, instead, additional class filings should be made earlier.
Relying on China Agritech, Cirque du Soleil moved to decertify the class. It was undisputed that Practice Management did not file the case within the applicable four-year statute of limitations, as the faxes at issue were sent in 2009. Finding the plaintiff had no tolling doctrine to rely on, U.S. District Judge Thomas M. Durkin granted the motion.
“A straightforward application of China Agritech to this case compels the conclusion that Practice Management’s untimely class claims cannot be tolled,” Judge Durkin wrote. “This case is a follow-on class action that was filed well after the four-year statute of limitations expired. For this reason, the Court agrees with defendants that the class should be decertified and the class claims dismissed.”
Judge Durkin rejected Practice Management’s argument that China Agritech did not address situations where class certification was never decided in a prior class action. The judge determined that the Supreme Court stated its intent to resolve the question of whether otherwise-untimely successive class claims may be salvaged by tolling in China Agritech and “repeatedly stated its holding in clear terms that were in no way qualified based on how the prior class action lawsuit was resolved.”
Judge Durkin also held that retroactive application of China Agritech was appropriate because the Supreme Court clarified the reach of prior precedent and did not change any “well settled” law, particularly as the question had split the federal appellate courts and been “very much in dispute across the country for years.”
Finally, the judge found that no other tolling doctrine (such as fraudulent concealment or equitable estoppel) operated to toll Practice Management’s claims, as the plaintiff failed to demonstrate it had been a diligent class representative. “[Plaintiff] asserts claims based on faxes sent in 2009, and it waited until 2014 to file this case,” Judge Durkin said. “It had ‘every reason to file a class action early, and little reason to wait in the wings, giving another plaintiff first shot at representation.’ This is especially true given that Practice Management has been represented by [the same law firm] in other lawsuits dating back to 2008.”
In fact, the China Agritech decision “deliberately aims to eradicate this type of conduct,” the judge added. “Allowing the same counsel to litigate three successive class actions over nine years is exactly the abuse of tolling that China Agritech seeks to prevent. Just like the third successive class action that the Supreme Court found untimely in China Agritech, Practice Management’s class claims in this third successive action are untimely. As a result, the class must be decertified, and the class claims dismissed.”
To read the memorandum opinion and order in Practice Management Support Services, Inc. v. Cirque du Soleil Inc., click here.
Why it matters: While it may be hard to believe that Cirque du Soleil was still litigating a class action lawsuit based on faxes that were sent in 2009, Judge Durkin all but closed down that three-ring circus once and for all by dismissing the class claims based on the Supreme Court’s China Agritech decision. Although the court found that Practice Management’s individual claims survived, the parties dismissed the case a few weeks later, finally ending the almost decade-long litigation. This case serves as a lesson for would-be plaintiffs in the NDIL: Do not wait to file just because another class action is pending.