Former Wal-Mart employee could rely on rejected Dukes class action to extend statute of limitations, Fifth Circuit rules

Posted
by John Chapman

Stephanie Odle was an original member of the class of plaintiffs in Betty Dukes, et al. v. Wal–Mart Stores, Inc. After many years of litigation over class certification, the Supreme Court decertified the Dukes class in June 2011.

Odle then filed her own proposed class action lawsuit in the Northern District of Texas. The district court concluded that Odle’s claims were untimely and barred by the applicable statute of limitations and thus dismissed the lawsuit.

The Fifth Circuit has now reversed and reinstated Odle’s case. The court of appeals held that the statute of limitations was tolled while Odle was a member of the proposed Dukes class and, once class action treatment in Dukes was rejected by the Supreme Court, Odle’s subsequent Texas lawsuit was timely. Odle v. Wal-Mart Stores, Inc. — F.3d —-, 2014 WL 1282753 (5th Cir. March 31, 2014).

Class actions and tolling the statute of limitations

Class action lawsuits, like any other lawsuit, are subject to statutes of limitation and repose that limit the time within which a suit must be brought. However, one purpose of class actions is to protect against the unnecessary expense and time that would be involved if all members of a proposed class were always obligated to file their own suit or risk losing their claim forever. Thus, a special rule has developed for tolling the statute of limitations while a proposed class action is pending.

The rule is that the filing of a class action tolls the running of a statute of limitations for all asserted members of the class. So-called “American Pipe tolling” is based primarily on the Supreme Court’s decisions in Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) and Crown, Cork & Seal Co., Inc. v. Parker, 462 U.S. 345 (1983). The tolling doctrine seeks to balance the competing interests of class action litigation (efficiency and economy) with those of statutes of limitation (protection against stale claims).

The running of the statute of limitations is not, however, tolled indefinitely. If the court overseeing the proposed class action decides that this case is not appropriate for class action treatment, the court will deny class certification. When a court denies class certification, the tolling of limitations stops. Once it has been decided the case will not proceed as a class action, those who might have been but now will not be members of the class no longer have reason to assume their rights are being protected by others in the original litigation. In short, once a proposal to proceed as a class action has been rejected, all would-have-been class members must act quickly to protect their own rights or those rights are lost forever.

The Odle v. Wal-Mart decision

Odle worked at Wal-Mart from 1991 to 1998. She timely filed a charge of sex discrimination against Wal–Mart in 1999 with the EEOC and was issued a right-to-sue notice in May 2001. The next month, Odle and several other named plaintiffs timely filed the Dukes proposed class action in the Northern District of California.

The decision certifying a class in Dukes was appealed. The Ninth Circuit held that employees like Odle, who were no longer working for Wal–Mart when the Dukes lawsuit was filed, lacked standing to pursue injunctive relief. However, the court of appeals stated “this does not mean that former employees are ineligible to receive any form of relief” because “they may be eligible to receive back pay and punitive damages.” As for class members who were Wal–Mart employees when the lawsuit was filed, the Ninth Circuit affirmed the certification of a class “with respect to claims for injunctive relief, declaratory relief, and back pay.”

The Supreme Court reversed the decision to certify a class of current employees. The Supreme Court held that, even narrowed to include only current employees, the class did not satisfy the “commonality” requirement of Rule 23(a) of the Federal Rules of Civil Procedure. Thus, on June 20, 2011, the Supreme Court ruled that Dukes could not go forward as a nationwide class action.

After the Supreme Court’s decision, the Dukes plaintiffs asked the district court in California to extend tolling of the statute of limitations so that the members of the former class could have “an opportunity to learn of the Supreme Court’s decision, obtain legal advice as necessary, and make an informed determination on how to best protect their legal interests.” The California district court granted the motion in part, stating that “[a]ll former class members who [had] an EEOC notice to sue” had until “October 28, 2011 to file suit.” According to the California court, it “grant[ed] this limited period of additional tolling in the interest of justice and to avoid any confusion that [may have] exist[ed] among former class members regarding when the time limit for them to take action expire[d].”

Odle filed her lawsuit as a putative class action against Wal–Mart in a Texas district court on October 28, 2011. Wal–Mart moved to dismiss, arguing Odle’s claims were time barred.

Wal–Mart argued that American Pipe tolling for class members like Odle, who were no longer working at Wal-Mart when Dukes was filed, ended when the Ninth Circuit ruled on the appeal. Thus, according to Wal-Mart, Odle needed to file her lawsuit no more than 90 days after the Ninth Circuit had ruled, and she could not rely on the later date when the Supreme Court ruled in the case.

The Fifth Circuit disagreed. Instead, the Fifth Circuit agreed with Odle that the Ninth Circuit’s opinion did not notify Odle that her claims could not be pursued as part of a class. To the contrary, the Ninth Circuit specifically instructed the California district court to consider whether at least some relief might be available to a class of former employees. In short, the Ninth Circuit’s Dukes opinion was not a “final adverse determination” as to class action status and thus tolling continued. The Fifth Circuit held:

Because Odle filed this lawsuit before the California district court’s October 28, 2011 filing deadline expired, her action was timely. To rule otherwise would frustrate American Pipe’s careful balancing of the competing goals of class action litigation on the one hand and statutes of limitation on the other, by requiring former class members to file duplicative, needless individual lawsuits before the court could resolve the class certification issue definitively.

Id.

Wait Too Long and You Lose Your Right to Bring A Claim

The Odle case is yet another reminder of the importance of acting quickly to protect your legal rights. Even one day too late is enough to completely bar a legal claim. It is important to understand that all property damage, personal injury and wrongful death claims must be brought within a certain period of time, called the “statute of limitations.” Claims not brought within such time are barred as a matter of law. Figuring out the statute of limitations for a particular claim can be extremely difficult. Different states have different statutory time periods.

Some states recognize the “discovery rule,” which allows a plaintiff to bring their claims within a certain time of learning they have a claim rather than within a certain time of suffering their injury. The classic example of such a claim is a one based on a doctor leaving a sponge or other foreign body inside a patient after surgery; in most states, the time to bring a claim under these facts does not begin to run until the patient actually learns that some foreign body was left inside him, rather than from the date of the surgery.

Because of the complexity involved in determining the applicable statute of limitations, it is very important that victims contact a qualified attorney the moment they feel they may have a claim for personal injury or wrongful death. If they delay, they can lose their claim forever.

Heygood, Orr & Pearson and class actions

The attorneys at Heygood, Orr & Pearson have represented clients across the country in class action lawsuits against multimillion dollar companies, making sure that when consumers are hurt by corporate wrongdoing, the companies that do so are held accountable for their actions. Heygood, Orr & Pearson is AV-rated, the highest rating available from Martindale-Hubble, the top law firm rating service. Our partners Michael Heygood, Jim Orr, and Eric Pearson are all board certified trial lawyers and have all been voted by their peers as “Super Lawyers” in the state of Texas for several consecutive years.*

Heygood, Orr & Pearson are also very comfortable and experienced with the complex and challenging world of multidistrict litigation. As one example, Michael Heygood and other lawyers at Heygood, Orr & Pearson were designated “Lead Plaintiffs’ Counsel” last year by the federal court that presided over numerous wrongful death lawsuits regarding the Watson fentanyl patch that were consolidated for pretrial purposes in MDL No. 2372 — In re: Watson Fentanyl Patch Products Liability Litigation, before the United States District Court for the Northern District of Illinois.

Contact the law firm of Heygood, Orr & Pearson for a free consultation so we can help you determine the best way to protect your legal rights and interests. You can reach us by calling our toll-free hotline at 1-877-446-9001, or by following the link to our free case evaluation form located on this site.

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Michael Heygood, James Craig Orr, Jr. and Eric Pearson were selected to the Super Lawyers List, a Thomson Reuters publication, for the years 2003 through 2014.