The Supreme Court established class action tolling almost 50 years ago in American Pipe & Construction Co. v. Utah.1 The case and its progeny create an equitable doctrine that tolls putative class members’ statute of limitations during the pendency of class certification, allowing putative class members to sue individually if they cannot proceed with the class.2 The logic of American Pipe is that plaintiffs who elect not to file independent actions, while waiting to see whether their claims will be adjudicated as part of a not-yet-certified class action, should not be judged to have slept on their rights.
Thus, the commencement of the action satisfied the purpose of the limitation provision as to all those who might subsequently participate in the suit as well as for the named plaintiffs. To hold to the contrary would frustrate the principal function of a class suit, because then the sole means by which members of the class could assure their participation in the judgment if notice of the class suit did not reach them until after the running of the limitation period would be to file earlier individual motions to join or intervene as parties — precisely the multiplicity of activity which Rule 23 was designed to avoid in those cases where a class action is found “superior to other available methods for the fair and efficient adjudication of the controversy.”3
In Massachusetts, the Supreme Judicial Court (SJC) has never expressly recognized the American Pipe tolling doctrine, but it is likely that the SJC would adopt the tolling doctrine, as it has already been recognized by lower courts in the commonwealth.4 The circumstances under which American Pipe may apply, however, are less clear. This article highlights two scenarios where a strong argument exists that American Pipe should not toll the statute of limitations.
Scenario 1: When A Putative Class Member Files An Individual Action Prior To Class Certification
The first scenario is when a plaintiff, who otherwise is a putative class member, files an individual action during the pendency of class certification. The federal courts of appeal are currently split on whether the American Pipe tolling doctrine should apply under these circumstances. The majority of federal courts of appeal — the Second, Ninth and 10th Circuits — have adopted the rule that putative members may still benefit from American Pipe even if they have filed an individual action while class certification is pending.5 That is, the majority rule tolls the statute of limitations from the filing of the putative class action through the filing of the individual action. On the other hand, only the Sixth Circuit has declined to extend American Pipe to a plaintiff who files an individual lawsuit before the class certification ruling.6
Closer to home, the First Circuit appears to share the minority view that American Pipe should not toll the statute of limitations for individual actions brought before a decision on class certification. In Glater v. Eli Lilly & Co., the U.S. Court of Appeals for the First Circuit found, in dicta, that American Pipe did not save a plaintiff from a motion to dismiss for lack of personal jurisdiction in her individual action despite her argument that her resident status should be determined by the date of filing of the earlier-filed putative class action.
Even assuming that American Pipe may have some relevance to [the plaintiff’s] ability to intervene … or to bring a separate action if she is unable to pursue her claim as a member of the class, American Pipe says nothing about [the plaintiff’s] ability to maintain a separate action while class certification is pending. The policies behind Rule 23 and American Pipe would not be served, and in fact would be disserved, by guaranteeing a separate suit at the same time that a class action is ongoing.7
More recently, the U.S. District Court for the District of Massachusetts, in Soroko v. Cadle Co., relying on the First Circuit’s language, declined to extend the benefit of American Pipe tolling to a plaintiff who filed an individual lawsuit before the class certification ruling.
[The plaintiff] may not avail herself of the tolling, however, because the First Circuit has ruled that when a plaintiff files his or her own lawsuit during the pendency of a proposed class action (i.e., before resolution of the class certification question), the plaintiff may not invoke the tolling otherwise provided by American Pipe.8
As a result, despite a lack of Massachusetts case law on this issue, in a scenario where a putative class member files an individual action before class certification and the expiration of the statute of limitations is at issue, defense counsel should be prepared to argue that American Pipe should not toll the statute of limitations based on First Circuit precedent.
Scenario 2: When A Putative Class Member Signed A Mandatory Arbitration Agreement
The second scenario where American Pipe tolling should not apply is when a putative class member signed a mandatory arbitration agreement. Under this scenario, the plaintiff could not have been a member of the class and therefore should not benefit from the American Pipe tolling doctrine to resuscitate otherwise time-barred claims in any subsequent arbitration proceeding.
In American Pipe, the Supreme Court held that “the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.”9 The Supreme Court’s rationale for the tolling doctrine is clear. After one putative class action complaint is filed, it prevents a “multiplicity” of duplicative complaints — and the resulting clogging of the court’s docket — by those who could participate in a judicial class action, and who otherwise would have to file a motion to join or intervene to ensure that the limitations period on their judicially cognizable claims did not expire during the pendency of the putative class action.10 The Supreme Court’s rationale, however, should not apply to individuals who have agreed to submit their claims to binding arbitration, because these individuals could not have subsequently participated in the class action.
In a variety of other contexts, courts similarly recognize that the class action device and remedies are inapplicable to potential claimants who signed mandatory arbitration agreements.11 This is especially true when the mandatory arbitration agreement contains a class action waiver. In addition, since the Supreme Court’s decision in American Express Co. v. Italian Colors Restaurant (“AMEX”),12 and the SJC’s reluctant acceptance that AMEX controls, Massachusetts courts can no longer refuse to enforce class action waivers contained in arbitration agreements on public policy grounds. Therefore, claimants’ potential arguments that they could have been a member of the class despite the mandatory arbitration agreement — and thus that American Pipe should apply — are limited.
Under this scenario, defense counsel should be prepared to argue to the arbitrator in any resulting arbitration that the statute of limitations on the claimant’s claims was not tolled by the filing of the putative class action under American Pipe because the claimant could never have been a member of the class. This argument should hold true regardless of whether the claimant was a named plaintiff in the putative class action who voluntarily dismissed their claims, or the claimant was compelled to submit their claims to arbitration, or the claimant submitted their claims to arbitration prior to class certification.
Conclusion
While it is likely that the SJC would adopt the American Pipe tolling doctrine if given the chance, a plaintiff still has the burden to establish that it applies under the particular circumstances of the case. The case law remains unclear (or, in Massachusetts, silent) as to under what circumstances it applies. When a putative class member files an individual action before class certification and/or when a putative class member has signed a mandatory arbitration are but two examples of where American Pipe may likely not toll the statute of limitations in Massachusetts. As a result, when the statute of limitations is at issue, defense counsel should be prepared to distinguish American Pipe based on the particular circumstances of their case.
Brendan P. Kelley is a business litigation and employment attorney at the Boston-based law firm Conn Kavanaugh Rosenthal Peisch & Ford LLP. He has represented individuals, family-run businesses, and large companies in a variety of industries, including automotive, manufacturing, chemicals, pharmaceutical, telecommunications and retail. He can be reached at bkelley@connkavanaugh.com.
1. 414 U.S. 538 (1974).
2. In the wake of American Pipe, a circuit split developed on whether the tolling doctrine applies only to those intervening in the existing action (which American Pipe decided) or, additionally, to separate actions for the same claims. The court resolved this split in Crown, Cork & Seal Co. v. Parker, where it extended class action tolling to separate actions brought after the denial of class certification. 462 U.S. 345 (1983). Since then, the court has limited the circumstances under which American Pipe applies. In 2017, in California Public Employees’ Retirement System v. ANZ Securities, Inc., the court held that American Pipe does not toll statutes of repose. 582 U.S. 497 (2017). One year later, in China Agritech, Inc. v. Resh, the court held that the American Pipe tolling doctrine does not apply to successively filed class actions. 584 U.S. 732 (2018).
3. 414 U.S. at 551, quoting F.R.C.P. 23(b)(3).
4. See, e.g., DiCerbo v. Comm’r Dep’t of Emp. & Training, 54 Mass. App. Ct. 128, 136 n.13 (2002), citing American Pipe, 414 U.S. at 554 (“[A]nd, as to putative class members who wish to intervene, the statute of limitations is tolled upon the filing of the complaint.”).
5. In re WorldCom Securities, 496 F.3d 245, 247 (2nd Cir. 2007); In re Hanford Nuclear Reservation Litigation, 534 F.3d 986, 1009 (9th Cir. 2008); State Farm Mutual Automobile Insurance Co. v. Boellstorff, 540 F.3d 1223, 1235 (10th Cir. 2008).
6. Wyser-Pratte Management Co., Inc. v. Telxon Corp., 413 F.3d 553, 569 (6th Cir. 2005).
7. 712 F.2d 735, 739 (1st Cir. 1983).
8. 2011 WL 4478479, at *2 (D. Mass. Sept. 23, 2011), citing Glater, 712 F.2d at 739.
9. 414 U.S. at 554 (emphasis added).
10. Id. at 551.
11. See, e.g., Caudle v. American Arbitration Ass’n, 230 F.3d 920, 921 (7th Cir. 2000) (the class action device “does not entitle anyone to be in litigation; a contract promising to arbitrate the dispute removes the person from those eligible to represent a class of litigants.”); Kirkpatrick v. J.C. Bradford & Co., 827 F.2d 718, 725 n.5 (11th Cir. 1987) (persons whose “claims are subject to arbitration thus [are] not considered members of the class”); Estrella v. Freedom Financial Network, LLC, 2012 WL 214856, *5 (N.D. Cal. 2012) (decertifying class and compelling arbitration because named plaintiff subject to arbitration agreement could not serve as class representative); Cronas v. Willis Group Holdings Ltd., 2008 WL 4964695, *1 (S.D.N.Y. 2008) (dismissing claims of putative employment discrimination class representative and directing the claims to arbitration; “[a] plaintiff cannot seek class certification if she has no claim that is properly before the Court in the first place.”); Lewis Tree Service, Inc. v. Lucent Technologies, Inc., 239 F. Supp. 2d 332, 340 (S.D.N.Y. 2002) (dismissing putative class representative’s claims against defendants “[b]ecause all of [plaintiff’s] claims are subject to arbitration, no useful purpose will be served by granting a stay of [plaintiff’s] claims and thus its action against the defendants is dismissed.”); Cornejo v. Big Lots Stores, Inc., 2023 WL 3737058, at *2-4 (E.D Cal. May 31, 2023) (denying class certification where a significant majority of the putative class members executed binding arbitration agreements); Porreca v. Rose Group, 2013 WL 6498392 (E.D. Pa. Dec. 11, 2013) (barring the class representative plaintiff from proceeding with his putative class action against his former employer for federal and state wage violations because he signed an arbitration agreement).
12. 570 U.S. 228, 235-39 (2013).