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Court Cites Supreme Court’s China Agritech Decision In Decertifying TCPA Class Action

The Northern District of Illinois recently granted a motion to decertify a class of TCPA plaintiffs in light of the U.S. Supreme Court’s decision in China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018), which held that the equitable tolling doctrine does not apply to successive class actions. See Practice Mgmt. Support Servs., Inc. v. Cirque du Soleil, Inc., No. 14-2032, 2018 WL 3659349 (N.D. Ill. Aug. 2, 2018). In doing so, the court observed that plaintiffs can no longer “wait out” a statute of limitations and then “piggy back on an earlier, timely filed class action.” Id. at *1.

The Cirque du Soleil case was the “third successive action filed against defendants by the same counsel … based on the same fax transactions.” Id. at *1. The plaintiff alleged that defendants had advertised theatrical shows by transmitting faxes that lacked proper opt-out instructions. Id. The plaintiff filed the case in 2014 and asserted TCPA claims arising from faxes that defendants had allegedly sent in 2009. Id. at *2. Thus, it was undisputed that the plaintiff had not filed the case within the applicable four-year limitations period. Id.

The defendants moved for summary judgment and argued that the claims were time-barred. See id. at *2. But the court denied that motion in light of the controlling rule in the Seventh Circuit at the time, which was that the “commencement of the original class suit . . . toll[ed] the running of the statute of limitations for all purported members of the class”—regardless of whether the class members subsequently filed an individual action or yet another class action. Id. Earlier this year, the court granted the plaintiff’s motion for class certification. Id.

A few months later, however, the Supreme Court’s decision in China Agritech abrogated the prior Seventh Circuit rule by drawing “a clear distinction between successive individual suits and successive class actions.” Id. at *3. The China Agritech court explained that previous Supreme Court case law on the subject ‘“addressed only putative members who wished to sue individually after a class-certification denial.”’ Id. (quoting China Agritech, 138 S. Ct. at 1806). The cases “did not ‘so much as hint[] that tolling extends to otherwise time-barred class claims.”’ Id. (same).

The Cirque du Soleil defendants then moved to decertify the class and argued that the plaintiff’s class claims were untimely in light of the China Agritech holding. Id. at *1. The court granted that motion, finding that a “straightforward application of China Agritech . . . does not permit the maintenance of a follow-on class action past the expiration of the statute of limitations.” Id. at *3. “Allowing the same counsel to litigate three successive class actions over nine years,” the court explained, “is exactly the abuse of tolling that China Agritech seeks to prevent.” Id. at *6. Accordingly, the court decertified the class, leaving the plaintiff with only its individual claim on its own behalf.

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About this Author

Michael Daly, Drinker Biddle Law Firm, Philadelphia, Litigation and Retail Attorney
Partner

Michael P. Daly defends class actions and other complex litigation matters, handles appeals in state and federal courts across the country, and counsels clients on maximizing the defensibility of their marketing and enforceability of their contracts. A recognized authority on class action and consumer protection litigation, he often speaks, comments, and writes on recent decisions and developments in the class action arena. He is also a founder of the firm’s TCPA Team; the senior editor of the TCPA Blog, which provides important information and insight...

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Matthew Morrissey, Drinker Biddle Law Firm, Litigation Attorney
Associate

Matthew M. Morrissey litigates claims in federal and state courts throughout the country. Matt represents clients in commercial disputes, class actions, internal investigations and financial services litigation. He is also frequently called upon to represent clients in regulatory and enforcement actions involving federal, state and municipal authorities.

Matt is a contributor to the firm's SEC Law Perspectives Blog, which provides reports, discussions, and analyses on noteworthy trends in enforcement and regulatory activity of the U.S. Securities and Exchange Commission (SEC) and other agencies, such as the U.S. Commodity Futures Trading Commission (CFTC).

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