Federal Court Addresses American Pipe Tolling, Finding Statute of Limitations on Class Claims Accrued Upon Forum Non Conveniens Dismissal of Prior Putative Class Action

by Carlton Fields
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A Delaware federal district court granted defendants’ motion to dismiss plaintiffs’ claims on statute of limitations grounds, rejecting plaintiffs’ argument that the claims had been tolled under the principles of cross-jurisdictional tolling.

The case involves claims of injuries allegedly caused by the use of dibromochloropropane (DBCP”) on plantations in several Latin American countries.  A first putative DBCP class action was filed in Texas state court in 1993, was then removed to federal court based on Foreign Sovereign Immunities Act (“FSIA”), and subsequently dismissed on forum non conveniens grounds in 1995.  The dismissal was affirmed by the Fifth Circuit in 2000; certiorari was denied by the Supreme Court in 2001.  Meanwhile, a second DBCP class action was commenced in Hawaii and was also removed to federal court on FSIA grounds.  However, in 2001 the Ninth Circuit reversed the FSIA removal and its decision was affirmed by the Supreme Court in 2003.  Based on this decision, plaintiffs successfully reinstated the Texas action in state court and filed a motion for class certification, which was denied in 2010.  Subsequently, plaintiffs filed the Delaware action, arguing that, since the denial of class certification in the Texas action did not occur until 2010, under the principles of cross-jurisdictional tolling the Delaware claims were within the applicable statute of limitations.   Defendants, on the other hand, argued that even if cross-jurisdictional tolling applied, the tolling period had expired when the Texas action was dismissed in 1995 or, at the latest, when the Supreme Court denied certiorary in 2001.   The court agreed with the defendants.

Having first concluded that Delaware law recognizes the concept of cross-jurisdictional tolling, the court identified the following factors for determining whether tolling applies in a class action:  (a) the actual pendency of the action itself; (b) the objective reasonableness of an individual’s reliance on the action to protect his rights; and (c) the balance of prejudice to both plaintiff and defendant based upon the principles underlying class actions and statutes of limitations.

Applying these principles and those of the Supreme Court’s opinions in American Pipe and Crown, Cork & Seal, the court found that after the forum non conveniens dismissal of the Texas action in 1995, plaintiffs’ reliance on the Texas action to protect their rights would have been “objectively unreasonable.”  The court stated: “Because most of the plaintiffs’ home countries did not have mechanisms for class actions . . . plaintiffs were put on notice in 1995 that they would need to file individual suits to preserve their rights.”   The court further concluded that, even assuming that the tolling was in effect during the appellate process, that process had expired upon the Supreme Court’s denial of certiorari in 2001.  And, while the Supreme Court decision in the Hawaii provided a basis for reinstating the Texas action, “that decision was not until 2003, two years after the appeals process had run.”

The court further concluded that plaintiffs have not been unfairly prejudiced because they “have had their chance to be heard as a class” upon the reinstatement of the Texas action.  “Plaintiffs had plenty of opportunity to pursue individual claims but chose not to.”

Marquinez v. Dole Food, No. 12-695-RGA, slip op. (D. Del. May 27, 2014)

 

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Carlton Fields
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