State Supreme Court Rejects Tolling Based on Prior Class Action

by Dechert LLP
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A state's supreme court ruled earlier this month that the filing of a putative class action in another state does not stop the clock on the running of the Virginia statute of limitations for absent class members.  See Casey v. Merck & Co.,  No. 111438 (Va., 3/2/12).

The issue arose in the context of the Fosamax litigation and the somewhat unique civil procedure of Virginia.  On September 15, 2005, a putative class action, Wolfe v. Merck & Co., was filed in the United States District Court for the Middle District of Tennessee. The putative class included "[a]ll persons who consume or have consumed FOSAMAX, whether intravenously or by mouth." The representative plaintiffs in the class action asserted claims of strict liability, negligence, and medical monitoring against Merck.  The case became part of the MDL for this product, and the MDL court denied class certification in 2008.  But prior to the dismissal of the Wolfe putative class action, four plaintiffs, all residents of Virginia, filed individual state law based actions against Merck in the Southern District of New York, asserting federal diversity jurisdiction. It was undisputed that all four plaintiffs filed suit more than two years after the latest possible date that they sustained their respective alleged injuries, and that Virginia law applied to their claims.

Defendant naturally moved for summary judgment, alleging that the four plaintiffs’ actions were untimely under Virginia's two-year statute of limitations for personal injuries. In response, the plaintiffs claimed that the Wolfe putative class action, which was filed within the two-year limitation period, tolled the running of the Virginia statute of limitations on their individual actions because they would have been members of the proposed class had certification been granted.

The district court agreed with defendant, but on appeal the Second Circuit certified, asking the Virginia Supreme Court to determine whether Virginia law permits equitable or statutory tolling of a Virginia statute of limitations due to the pendency of a putative class action in another jurisdiction.

The court began from the proposition that limitations periods are a creature of statute, and a statute of limitations may not be tolled, or an exception applied, in the absence of a clear statutory enactment to such effect. Any doubt must be resolved in favor of the enforcement of the statute. Given these principles, there was no authority in Virginia jurisprudence for the equitable tolling of a statute of limitations based upon the pendency of a putative class action in another jurisdiction.

As for statutory tolling, Virginia Code § 8.01-229(E)(1) provided that, “If any action is commenced within the prescribed limitations period and for any cause abates or is dismissed without determining the merits, the time such action is pending shall not be computed as part of the period within which such action may be brought, and another action may be brought within the remaining period.”  The plaintiffs contended that Code § 8.01-229(E)(1) statutorily tolled the statute of limitations for plaintiffs’ claims during the pendency of the putative class action, and that the court's decision in Welding, Inc. v. Bland Cnty. Serv. Auth., 261 Va. 218, 541 S.E.2d 909 (2001), indicated that Virginia had recognized cross-jurisdictional putative class action tolling.

In Welding, the court had stated that, under Virginia law, an action filed in a foreign jurisdiction may indeed trigger tolling under the Code section. Although there is no particular type of action that must be filed and no particular jurisdiction in which that action must be brought for the commencement of an action to trigger tolling under Code § 8.01-229(E)(1), for tolling to be permitted, the subsequently filed action must be filed by the same party in interest on the same cause of action in the same right.  Welding differed from the instant case because it concerned a situation where the same plaintiff initially sued in federal court on the same cause of action he subsequently pursued in state court. The plaintiff in both actions was clearly the same. In the instant matter, said the court, it is undisputed that the four plaintiffs were not named plaintiffs in the putative class action that they claim triggered the tolling. They were merely absent members of a putative class that included everyone in the country who had taken this drug.

For the filing of an action to toll the statute of limitations from running on a subsequently filed action, there must be a true identity of the parties in the two lawsuits. In other words, for the statute of limitations to be tolled for a subsequent action, the party who brought the original action must be the same as the plaintiff in the subsequent action or a recognized representative of that plaintiff asserting the same cause and right of action. A putative class action is a representative action in which a representative plaintiff attempts to represent the interests of not only named plaintiffs, but also those of unnamed class members. But Virginia jurisprudence does not recognize class actions. Under Virginia law, a class representative who files a putative class action is not recognized as having standing to sue in a representative capacity on behalf of the unnamed members of the putative class. Thus, under Virginia law, there is no identity of parties between the named plaintiff in a putative class action and the plaintiff in a subsequent action filed by a putative class member individually. Accordingly, a putative class action cannot toll the limitations period for unnamed putative class members under Virginia law.

Certified questions answered in the negative.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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