On August 3, the Eleventh Circuit held in Ewing Industries Corporation v. Bob Wines Nursery, Inc., et al., that a proposed class action accusing a Florida nursery of sending unsolicited faxes did not suspend the statute of limitations for a later-filed proposed class action challenging that same conduct, despite the fact that the initial class action failed for reasons regarding the named plaintiff’s standing, and not due to any defect in the proposed class. Even in such circumstances, where the defect regarded only the named plaintiff, the Eleventh Circuit held that class tolling was not available for a subsequent proposed class action.
The Eleventh Circuit based its decision on its 1994 ruling in Griffin v. Singletary, which established the (now generally accepted) “no-piggybacking” rule, i.e., that a proposed class action does not toll the limitations period under the principles of American Pipe tolling for subsequent class claims that are asserted by members of the original class. Effectively, the Eleventh Circuit declined to create an exception to this general rule.
On this basis, the Eleventh Circuit held: “This case presents the question of whether the pendency of a purported class action tolls the statute of limitations for a later class action seeking to represent the same class, when the original purported class action was dismissed due to the inadequacy of the class representative rather than a defect in the class itself. The district court held that the purported class action did not toll the statute of limitations for the later class action. We affirm.”
The Eleventh Circuit’s decision adds to the split of authority as to whether American Pipe tolling can be invoked for subsequent putative class actions when the initial class action was dismissed for reasons specific to the class representative (or his or her counsel), as opposed to reasons concerning the class as a whole. Looking forward, the decision in Ewing will have particular force relative to causes of action that have short statutes of limitation (such as the one-year statute of limitations under the federal Fair Debt Collection Practices Act), as well as in cases where the initial proposed class action was pending for a long period of time before certification was denied. In such contexts, the holding of Ewing would serve to preclude the claims of essentially all of the proposed class members. Ewing also counsels litigants to take a hard look at the circumstances of the named plaintiff (and his or her counsel). That is true with respect to issues of standing, adequacy, and typicality, among many others. Litigants should, therefore, tailor discovery around such issues.
Indeed, based on the decision in Ewing, such challenges, if successful, could have a sweeping practical effect on the ability of the proposed class members to bring future claims against the defendant. Attorneys for class defendants should also advise their clients as to the practical effect of these decisions on their ability to defeat stacked class actions on statute of limitations grounds, and the related effect of that calculus on the litigation strategy for the initial class action. Troutman Sanders will continue to monitor this and like decisions.