Defendants can add a new decision to their arsenal for defending against multiple proposed class actions on the same claims. The Eleventh Circuit recently issued a decision in Ewing Industries Corporation v. Bob Wines Nursery, Inc., et al., No. 14-13842 (11th Cir. Aug. 3, 2015), holding that a proposed class action does not toll the statute of limitations for future proposed class actions, even where the class claims fail for reasons which have nothing to do with the proposed class.
Though not a workplace class action, the teaching of the cases are important for all employers.
Background Of The Case
On January 12, 2010, Aero Financial, Inc. ("Aero") filed a proposed class action in Florida state court against a Florida nursery for sending unsolicited facsimile advertisements to a putative class in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227(b)(1)(C), which carries a four year statute of limitations. The complained of conduct allegedly occurred in December 2006, about three and a half years before the commencement of the action.
On June 25, 2013, the Florida state court granted summary judgment for Defendants, finding Aero lacked standing to bring the claim because the faxes were not sent directly to Aero. Because Aero lacked standing, the claims were rejected solely due to inadequate class representation, and not any defect in the proposed class itself.
On August 2, 2013, Ewing Industries Corporation ("Ewing") filed a similar class complaint against the same defendants in federal court for the same alleged violations. While the complaint acknowledged that the statute of limitations had passed, Ewing argued that the claims were tolled during the pendency of Aero's proposed class action. On June 26, 2014, the District Court granted defendants' motion to strike the class allegations on the grounds that the claims were time-barred and denied Ewing's motion for class certification. Ewing appealed to the Eleventh Circuit.
The Eleventh Circuit's Opinion
The Eleventh Circuit affirmed the District Court's ruling. It relied heavily on a twenty-year old ruling in Griffin v. Singletary, 17 F.3d 356 (11th Cir. 1994) ("Griffin II"), which established a no "piggy backing" rule to avoid class actions piggy backing "one after another in an attempt to find an adequate class representative." Ewing, at 4. In Griffin II — an action consolidating appeals by the original proposed class representatives and other class members who subsequently filed and whose claims were denied as untimely — the Eleventh Circuit held that the statute of limitations was not tolled during the initial proposed class action, noting "the pendency of a previously filed class action does not toll the limitations period for additional class actions by putative members of the original asserted class." Id. at 359.
The plaintiffs in Ewing attempted to distinguish Griffin II, arguing that the class in Griffin II had failed due to defects in the proposed class, while the proposed class in Ewing failed only as a result of an inadequate class representative. The Eleventh Circuit rejected this distinction, noting instead that Griffin II was likewise concerned with "the potential for multiple rounds of litigation as the class seeks an adequate class representative." Ewing, at 8. Consequently, the Eleventh Circuit held that even where "the original purported class action was dismissed due to the inadequacy of the class representative rather than a defect in the class itself," the statute of limitations is not tolled for the later class action.
The Eleventh Circuit's decision provides new ammunition to defendants faced with multiple proposed class actions for the same alleged misconduct. Breaking from prior interpretations of Griffin II by other circuit courts — including the Seventh, Sixth and Ninth Circuits, which have each previously distinguished Griffin II, finding the precedent did not apply to circumstances where the class failed due to inadequate representation — the Eleventh Circuit has added an additional defense against plaintiffs attempting multiple bites at the apple.
Implications For Employers
The Ewing decision encourages defendants to thoroughly vet the adequacy of named plaintiffs, particularly for causes of action with short statutes of limitation that may expire before a class certification determination is issued on the merits. Meanwhile the ruling certainly bolsters defendants' abilities to defend proposed class claims on statute of limitations grounds. However, the decision may also make it more difficult for the parties to reach agreement on bifurcated discovery, absent a willingness to enter a broad tolling agreement.
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