Sixth Circuit: 28 U.S.C. § 1367(d) Tolls the Claims of Unnamed Class Plaintiffs | Practical Law

Sixth Circuit: 28 U.S.C. § 1367(d) Tolls the Claims of Unnamed Class Plaintiffs | Practical Law

In In re: Vertrue Marketing and Sales Practices Litigation, on April 16, 2013, the US Court of Appeals for the Sixth Circuit held that putative class members have "claims" under 28 U.S.C. § 1367(d), which provides for the tolling of related state law claims while a federal litigation is pending.

Sixth Circuit: 28 U.S.C. § 1367(d) Tolls the Claims of Unnamed Class Plaintiffs

Practical Law Legal Update 9-525-8839 (Approx. 3 pages)

Sixth Circuit: 28 U.S.C. § 1367(d) Tolls the Claims of Unnamed Class Plaintiffs

by PLC Litigation
Published on 22 Apr 2013USA (National/Federal)
In In re: Vertrue Marketing and Sales Practices Litigation, on April 16, 2013, the US Court of Appeals for the Sixth Circuit held that putative class members have "claims" under 28 U.S.C. § 1367(d), which provides for the tolling of related state law claims while a federal litigation is pending.
On April 16, 2013, the US Court of Appeals for the Sixth Circuit issued an opinion in In re: Vertrue Inc. Marketing and Sales Practices Litigation. The court held, as a matter of first impression, that the statutes of limitations for the claims of putative class members may be tolled under 28 U.S.C. § 1367(d).
In 2002, a plaintiff filed suit in the US District Court for the Southern District of California seeking to represent a national class of purchasers of membership programs that allow customers to benefit from discounts on products and services. The programs were sold by Vertrue Inc., and the purchasers alleged that:
  • They were lured into the programs through fraud.
  • Vertrue and the other defendants made unlawful charges to customer accounts.
The Southern District of California ultimately dismissed the action in its entirety without ruling on class certification, leading the purchaser-plaintiffs to file 13 state court actions in various jurisdictions. These actions were consolidated in the US District Court for the Northern District of Ohio. The consolidated complaint alleged, among other causes of action, violations of state consumer protection statutes, fraud, conversion and unjust enrichment.
Defendants made a motion to dismiss, which the Northern District of Ohio granted in part and denied in part. The court held that the period of limitations governing the plaintiffs' claims were tolled as a result of the Southern District of California proceeding and that the state court claims therefore were timely filed. The defendants appealed this holding to the Sixth Circuit.
Under 28 U.S.C. § 1367(d), the period of limitations for a related state law claim is tolled while a federal claim is pending and for 30 days after it is dismissed, unless state law provides for a longer tolling period. The defendants argued that tolling did not apply because the plaintiffs were not parties to the Southern District of California litigation and therefore did not have "claims" that could be tolled under the statute. The Sixth Circuit disagreed, noting that the Supreme Court consistently has referred to the "claims" of unnamed plaintiffs in class action lawsuits. The court explained that refusing to recognize the claims of unnamed class members would lead to inefficiency because the class members would then be forced to file individual actions to preserve any state law claims whose statutes of limitations might expire while a federal class action is pending. Therefore, the Sixth Circuit held that the plaintiffs' claims were tolled under 28 U.S.C. § 1367(d) and affirmed the district court's holding that the defendants' state law claims were timely asserted.
Court documents: