While Wal-Mart scored a major victory for employers in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), the former class members are continuing to try and regain some of the ground they lost. As reported here, here, here and here, several district courts have considered whether or not the claims of former Dukes plaintiffs who filed follow-on lawsuits after the landmark decision are time-barred, with varying results. The U.S. District Court for the Western District of Tennessee dismissed the plaintiffs’ claims as time-barred in Phipps, et al. v. Wal-Mart Stores, Inc., No. 3:12-CV-01009, 2013 WL 752152 (W.D. Tenn. 2013), but encouraged appellate review in its order. Now, the Sixth Circuit has agreed to entertain an interlocutory appeal on this issue in Phipps, et al. v. Wal-Mart Stores, Inc., No. 13-6194 (6th Cir.), and a showdown in the U.S. Supreme Court may be forthcoming.
As previously discussed, in March 2013, the Western District of Tennessee, in Phipps, et al. v. Wal-Mart Stores, Inc., No. 3:12-CV-01009, 2013 WL 752152 (W.D. Tenn. Feb. 20, 2013), dismissed the class claims of former Dukes plaintiffs on the ground that they were time-barred under Andrews v. Orr, 851 F.2d 146, 149 (6th Cir. 1988). By way of background, Andrews held that the tolling principle of American Pipe & Constr. Co. v. Utah, 414 U.S. 538, 554 (1974) — namely, that the commencement of a class action lawsuit suspends the statute of limitations as to putative members of the failed class — applied only to the initiation of new individual actions, and not new class actions. Andrews, 851 F.2d at 149 (“[T]he pendency of a previously filed class action does not toll the limitations period for additional class actions by putative members of the original asserted class.”).
But the district court in Phipps did not stop there (to the chagrin of Wal-Mart and employers everywhere). Instead, it invited the Sixth Circuit to consider whether Andrews remained viable in light of subsequent cases. It was thus not surprising when the district court certified the question of whether the plaintiffs’ claims were time-barred for interlocutory review in June 2013, nor when the Sixth Circuit accepted the appeal in September 2013.
The Issues On Appeal
The Phipps plaintiffs/appellants filed their opening appellate brief on November 12, 2013. Not surprisingly, they largely followed the roadmap for overturning Andrews laid out by the district court.
The plaintiffs/appellants contend that two U.S. Supreme Court cases, Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 130 S. Ct. 1431 (2010), and Smith v. Bayer, 131 S. Ct. 2368 (2011), obviated Andrews and thus, their claims are timely under American Pipe. Pltfs.’ Brief at 17-26. In Shady Grove, the Supreme Court held that plaintiffs must be permitted to pursue their claims as a class action so long as they meet the criteria of Federal Rule of Civil Procedure 23. Id. at 23 (citing Shady Grove). Bayer, as interpreted by the plaintiffs/appellants, stands for the proposition that “one court’s denial of class certification cannot bar members of the failed class from pursuing the same claims in a second class action.” Id. at 18. When considered in tandem, the plaintiffs/appellants submit that Shady Grove and Bayer supersede Andrews because: (1) they cannot be bound by the failed class certification effort in Dukes; and (2) they retained their American Pipe rights to pursue their claims individually and must be permitted to pursue their claims collectively if they meet the requirements of Rule 23. Id. at 12-13.
This argument strikes us as paradoxical. Plaintiffs/appellants went to great lengths in their opening brief to explain that their claims, which concern alleged discrimination at the regional level, differ from the claims asserted in Dukes, which concerned alleged discrimination at the national level. Id. at 8-10. Assuming that the newly asserted claims are in fact different from those at issue in Dukes, would they not be time-barred? Indeed, by plaintiffs’/appellants’ own words, Bayer applies to the “same claims in a second class action.” See id. at 18 (emphasis added). Yet plaintiffs/appellants contend that they are not pursuing the same claims in their follow-on action. Is Bayer even relevant then? The Sixth Circuit will likely want clarification on this head-scratcher.
Covering all of their bases, the plaintiffs/appellants also argue that their claims are timely even if Andrews remains good law. In In Re Vertrue Mktg. & Sales Pracs. Litig., 719 F.3d 474 (6th Cir. 2013), the Sixth Circuit held that American Pipe tolling was not precluded where no court had previously ruled on certification of the proposed class. Id. at 479-80. The plaintiffs/appellants argue that Vertrue thus provides that their claims are protected by American Pipe because they have never been the subject of a prior class certification ruling. Pltfs.’ Brief at 31-32. Cognizant that their argument inevitably leads one to ask, “What about Dukes?” — indeed, their reliance upon Bayer invites such commentary alone — the plaintiffs/appellants submit that no court has issued a ruling on certification of their regional class. Id. at 31-33. [It bears noting that the Southern District of Florida rejected a similar “regional versus national” distinction, as reported here.]
It strikes us that plaintiffs’/appellants’ Vertrue argument suffers from the same flaw as their Bayer/Shady Grove argument. How does American Pipe help plaintiffs/appellants if purportedly different claims are at issue? Wal-Mart would be well-served to attack plaintiffs’/appellants’ position on the ground of this apparent inconsistency.
The Sixth Circuit’s ruling in Phipps may be a precursor to a reevaluation of the American Pipe rule in the Supreme Court. Stay tuned – we will report back with new developments as they arise.