On July 7, 2015 in Phipps v. Wal-Mart Stores, Inc., the US Court of Appeals for the Sixth Circuit rejected a blanket rule that plaintiffs may not file follow-on class actions to litigate the claims of unnamed class members (No. 13-6194, (6th Cir. July 7, 2015)). It held that a subsequent class action by unnamed class members was not time-barred under the tolling principles of American Pipe & Construction Co. v. Utah (414 U.S. 538, 94 S. Ct. 756 (1974)). Under American Pipe, the timely filing of a class action complaint tolls the statute of limitations for all members of the putative class until a court decides that the suit is not appropriate for class treatment.

This putative class action was filed after the US Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes (131 S. Ct. 2541 (2011)). In Dukes, the Court reversed certification under Federal Rule of Civil Procedure (FRCP) 23(b)(2) of a nationwide class of current female employees of Wal-Mart stores who alleged gender discrimination in pay and promotions. The Court held that the plaintiffs did not show questions of law or fact common to the class to warrant certification of a nationwide class. The plaintiffs in Dukes then moved to extend tolling of the statute of limitations under American Pipe in the California district court where the case had been pending, which the court granted in part. Among other things, the court set a deadline to obtain right-to-sue letters from the Equal Employment Opportunity Commission (EEOC) and file suit.

Plaintiffs Cheryl Phipps, Bobbi Millner and Shawn Gibbons, unnamed class members in Dukes, thereafter filed suit against Wal-Mart in the US District Court for the Middle District of Tennessee alleging gender discrimination under FRCP 23(b)(2) and (b)(3) on behalf of a narrowed class of current and former female employees in Wal-Mart Region 43. Wal-Mart moved to dismiss the putative class claims under FRCP 12(b)(6), arguing that Andrews v. Orr established a bright-line rule prohibiting American Pipe tolling for any class action brought after a previous denial of class certification (851 F.2d 146 (6th Cir. 1998)). The district court concluded that it was bound by that rule and dismissed the class claims, but certified its decision for interlocutory appeal.

The Sixth Circuit reversed and held that the putative class claims were not barred by American Pipe. The court had previously rejected the position that Andrews sets a bright-line rule that American Pipe tolling never applies to subsequent class actions by putative class members (see In re Vertrue Inc. Mktg. & Sales Litig., 719 F.3d 474, 479-80 (6th Cir. 2013)). In Andrews, the court barred a follow-on class action because it was filed months after the statute of limitations applicable to the named plaintiffs' individual claims had run. In contrast, the putative class claims in this case are not barred because the class neither seeks relitigation or correction of the earlier class claims. Specifically, the Sixth Circuit found that:

Counsel should be aware that, under Phipps, putative class members who benefited from American Pipe tolling are not categorically prohibited from filing follow-on class actions to press their claims.