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Split Deepens Over Interpretation of Supplemental Jurisdiction Tolling Provision
Practical Law Legal Update 3-574-1665 (Approx. 3 pages)
Split Deepens Over Interpretation of Supplemental Jurisdiction Tolling Provision
by Practical Law Litigation
| Published on 10 Jul 2014 • USA (National/Federal) |
In City of Los Angeles v. County of Kern, the California Supreme Court ruled that the tolling provision in 28 U.S.C. § 1367(d) provides a 30-day grace period for state court claims that would otherwise be lost after dismissal from federal court for lack of supplemental jurisdiction, rather than categorically suspending or replacing state statutes of limitations.
On July 7, 2014, the Supreme Court of California in City of Los Angeles v. County of Kern ruled that the tolling provision in 28 U.S.C. § 1367(d) provides a 30-day grace period for state court claims that would otherwise be lost after dismissal from federal court for lack of supplemental jurisdiction, rather than categorically suspending or replacing state statutes of limitations (No. S210150, (July 7, 2014)).
Los Angeles originally sued Kern County in federal district court claiming that a county law violated the federal equal protection clause and dormant commerce clause, exceeded Kern's police powers, and was preempted by state law. The district court agreed and granted Los Angeles a preliminary injunction and summary judgment.
The Ninth Circuit reversed, holding that Los Angeles lacked standing to assert its federal claim. The circuit court remanded to permit the district court to exercise discretion over whether to retain the case over the remaining state law claim. The district court declined to exercise supplemental jurisdiction and on November 9, 2010, dismissed the case without prejudice.
On January 26, 2011, 78 days after dismissal, Los Angeles filed suit in state court alleging the same issues. The trial court rejected Kern's argument that the suit was time-barred under § 1367(d), which provides that "[t]he period of limitations for any claim asserted under [a federal district court's supplemental jurisdiction] . . . shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period." The California Court of Appeal affirmed.
- The "suspension" approach would stop the running of the statute of limitation and, following dismissal of a claim and the expiration of 30 additional days, tack on however much time remained when the claim was originally filed in federal court.
- The "grace period" approach could abate the expiration of any period of limitations for as long as a claim was in federal court plus 30 days after dismissal.
- The "substitution" approach would replace any state deadline with a federal one, giving the parties 30 days to re-file following dismissal whether or not a longer period might otherwise still remain under state law.
After considering the text of § 1367(d), its legislative history, and federalism concerns, the court determined that the "grace period" approach was correct. The court reasoned this approach most closely aligned with the goal of avoiding the loss of claims that would otherwise be barred while least impinging on the right of state sovereigns to establish statutes of limitations.
Practitioners filing cases in federal court that contain both federal and state claims should be aware that, depending on the state at issue, they may need to re-file in state court within 30 days following the federal court's refusal to exercise supplemental jurisdiction.