Commercial Litigation and Arbitration

American Pipe — Unlike Equitable Tolling Doctrines — Does Toll Statutes of Repose

From Arivella v. Lucent Techs., Inc., 2009 U.S. Dist. LEXIS 48591 (D. Mass. June 8, 2009):

Relying primarily on Lampf v. Gilbertson, 501 U.S. 350, 363 (1991), Lucent suggests in its motion that "a statute of repose [like ERISA § 413(1)] may not be judicially tolled" ... and that consequently the plaintiffs' claims are untimely. In Lampf, the Supreme Court held, given a one-year statute of limitations and three-year statute of repose under section 10(b) of the Securities and Exchange Act, "that the equitable tolling doctrine is fundamentally inconsistent with the 1-and-3-year structure." Lampf, 501 U.S. at 363 (emphasis added). In concluding that the "venerable principle" of equitable tolling did not apply to three-year period of repose at issue in the case, the Supreme Court spoke broadly, proclaiming that "because the purpose of the 3-year limitation is clearly to serve as a cutoff, we hold that tolling principles do not apply to that period." Id.; see also id. ("The 3-year limit is a period of repose inconsistent with tolling.").

What Lucent unsuccessfully attempts to minimize is the distinction between American Pipe tolling and the equitable tolling addressed in Lampf. American Pipe tolling "is a species of legal tolling," in that it is derived from a statutory source, in this case Rule 23. Newport v. Dell, Inc., No. CV08-0096-TUC, 2008 WL 4347311, at *4 n.8 (D. Ariz., Aug. 21 2008). Legal tolling is a distinct from equitable tolling, which is a judicially created doctrine that stops the running of a statute of limitations in certain situations involving unfairness or excusable mistake, for example, "where the party injured by the fraud remains in ignorance of it without any fault or want of diligence or care on his part." Lampf, 501 U.S. at 363.

[Footnote 7] The Court recognizes that many Circuit court decisions have referred to American Pipe tolling as equitable tolling. [Citations omitted.]

The distinction between legal and equitable tolling, however, is only thrown into relief in limited circumstances, namely, when a court must decide whether to toll a statute of repose. None of the above cases that classify American Pipe tolling as equitable tolling squarely addressed that question, and thus their characterizations of American Pipe as an equitable tolling decision are of limited use to the case at bar.

In contrast, the few courts to have specifically considered the quandary facing this Court recognize that American Pipe tolling is qualitatively different from equitable tolling. See, e.g., Joseph v. Wiles, 223 F.3d 1155, 1167-68 (10th Cir. 2000); Newport v. Dell, Inc., No. CV-08-0096-TUC-CKJ(JCG), 2008 WL 4347311, at *4, n.8 (D. Ariz. Aug. 21, 2008). As the Federal Circuit explained, "American Pipe and Crown, Cork & Seal were not based on judge-made equitable tolling, but rather on the Court's interpretation of Rule 23." Stone Container Corp. v. United States, 229 F.3d 1345, 1354 (Fed. Cir. 2000).

This is not to say that all circuits are in complete unanimity regarding the reach of American Pipe. For example, a circuit split currently exists regarding whether an individual plaintiff who is a putative members of a class action and who files his or her own suit before to a court denies class certification in the class certification, is entitled to American Pipe tolling. Compare In re Hanford Nuclear Reservation Litig., 534 F.3d 986, 10009 (9th Cir. 2008) (applying American Pipe to such suits) with Wyser-Pratte Mgmt. Co. Inc. v. Telexon, 413 F.3d 553, 569 (6th Cir. 2005) (refusing to apply American Pipe to such suits); see also Gregory P. Joseph, Federal Practice: Circuit Splits, The National Law Journal, Apr. 13, 2009, at 18.

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