In China Agritech, Inc. v. Resh, the United States Supreme Court confirms that American Pipe tolling isn't what we thought


American Pipe, we had some good time.  Sniff.  But now you're dead to me.  Pack your stuff and get out. The Unites States Supreme Court, in China Agritech, Inc. v. Resh, et al. (June 11, 2018), answered a question that, as far as I have observed, wasn't being asked with any stridency for years.  That question was whether American Pipe equitable tolling applied to a subsequent class action (as opposed to individual action) when the plaintiff bringing the second action (a putative class member from the first) would have a time-barred claim absent the equitable tolling.

Top-filers, start your engines!

California Court of Appeal examines American Pipe tolling in Fierro v. Landry's Restaurant Inc.

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It's easy to say that California courts look to Rule 23 decisions for guidance when there is a gap in California's jurisprudence on class-related issues.  But how that works out in practice is a different matter.  In Fierro v. Landry's Restaurant Inc. (May 14, 2018), the Court of Appeal (Fourth Appellate District, Division One) waded into uncharted procedural terrain when they sorted out how American Pipe tolling interacts with California's different procedural approach to certification as a "death knell" versus interlocutory issue.  The core of the American Pipe application issue is captured by the Court's discussion of how federal and state procedure differ:

In the federal system, because there can be no appellate review of an order denying class certification until after entry of a final judgment in the class action, there can be years of delay—including potentially a trial on the merits of the individual claims—before the parties have the benefit of appellate review of the denial of class certification. Under such a procedure, the policy of protecting the efficiency and economy of litigation is not furthered by the continuation of tolling—first, pending resolution of the remaining claims in the trial court and, then, pending review and disposition in the appellate court.
In contrast, in our state system, the death knell doctrine allows the parties the benefit of immediate appellate review of an order denying class certification. This procedure advances the efficiency and economy of class action litigation. Stated differently, neither efficiency nor economy will result if, upon the denial of class certification, an unnamed class member is required either to seek intervention in the individual action that remains in the trial court or to file a new action while an immediate appeal of the order denying class certification is pending. Thus, in both the state and federal systems, once the trial court denies certification, the putative class member is on notice that he or she must take action to protect his or her rights; however, in the state system, there is a right to immediate review of that decision, and to deny American Pipe tolling under such circumstances is to encourage a multiplicity of actions—i.e., to encourage inefficiency and expense—before the order denying class certification is final

Slip op., at 20. The Court's effort to get under the hood and examine how policy interacts with procedural differences is commendable.

Separately, this case presents an unusual procedural history in its own right, as the Court had to engage in some very proactive digging to try to get as complete a record as it could and still fell short of getting all of what it wanted.

Appellants were successfully represented by  Matthew Righetti and John J. Glugoski of Righetti Glugoski.

Class-based equitable tolling does not extend period for filing under Government Claims Act

In an interesting twist to class action equitable tolling, the Court of Appeal (Fourth Appellate District, Division One), in California Restaurant Management Systems v. The City of San Diego (June 1, 2011), examined "whether the 'equitable tolling' principles outlined in American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538 (American Pipe) and Crown, Cork & Seal Co., Inc. v. Parker (1983) 462 U.S. 345 (Crown Cork) apply to extend the period within which a claim must be filed under the Government Claims Act (Gov. Code, § 810 et seq.)."  Slip op., at 2.  The issue arose after it was learned that San Diego had overcharged several classes of customers using the City's wastewater system.  A residential customer timely filed a governmental claim seeking a refund on behalf of residential customers who were overcharged and, after the claim was denied, filed a proposed class action lawsuit on behalf of that class of customers.  After that action was settled and dismissed, California Restaurant Management Systems (CRMS) filed its own governmental claim and then filed a putative class action on behalf of restaurant owners.  The City moved for summary judgment, contending CRMS's governmental claim was not timely filed, mandating dismissal of CRMS's proposed class action lawsuit. CRMS opposed the summary judgment motion, arguing the pendency of the first action tolled all limitations periods, including the period for filing a governmental claim. The trial court disagreed, and entered judgment in favor of City.

While the Court supplied an extensive background discussion of Government Claims Act requirements and equitable tolling, the ultimate basis for its decision was simply stated: "We conclude a prior class action does not equitably toll or satisfy the governmental claims requirement for claimants not within the class description contained in a timely-filed governmental claim on which the prior class action was predicated."  Slip op., at 18.  The first action described the claiming class as "residential" customers.  This eliminated the possibility that commercial customers could claim to have placed the City on notice of their claims.  The Court declined to extend the class claim filing exception recognized in City of San Jose v. Superior Court, 12 Cal. 3d 447 (1974).