Seventh Circuit: Class Action Limitations Tolling Stops Upon Dismissal, Regardless of Appeal
Addressing the often confusing issue of when class action tolling ends, in Collins v. Village of Palatine, the U.S. Court of Appeals for the Seventh Circuit announced the adoption of a simple and uniform rule: The statute-of-limitations clock resumes when a non-certified class action lawsuit is dismissed, regardless of whether an appeal is taken or the dismissal is with or without prejudice.
In American Pipe & Construction Co. v. Utah, the U.S. Supreme Court held that filing a class action suit tolls the statute of limitations for each member of the putative class. Since American Pipe, federal courts have clarified that tolling ends when class action certification is denied, when class members opt out of a certified class, when the suit is dismissed for lack of subject matter jurisdiction or otherwise dismissed without prejudice, and when the class component is voluntarily dismissed. But what if the original suit was dismissed with prejudice and there is an appeal? Does tolling stop immediately upon dismissal, or does it continue until any and all appeals are exhausted?
In Collins, Michael Collins brought a lawsuit in March 2016 alleging the Village of Palatine—a small town in Cook County, Illinois—violated his privacy rights under the Driver's Privacy Protection Act (DPPA) by displaying personal identification on a ticket left on his car in June 2007. Collins argued that his suit was timely, despite the DPPA's four-year statute of limitations, because an earlier class action suit, Senne v. Village of Palatine, tolled his limitations period. Jason Senne's proposed class action was filed in August 2010, and was dismissed with prejudice just one month later for failure to state a claim. However, over the next five years, Senne appealed—until November 2, 2015—when the Supreme Court denied certiorari.
The Seventh Circuit held that the tolling of the statute of limitations on Collins' claim stopped on September 20, 2010—when Senne's proposed class action was dismissed with prejudice. It grounded its holding in the same judicial efficiency concerns at the center of American Pipe, and stressed that extending tolling beyond the dismissal of a non-certified class action would expose defendants to stale claims. The Seventh Circuit reasoned that this primary function of statutes of limitations is best served by immediately resuming the limitations clock upon dismissal, regardless of the pendency of an appeal.