The Third Circuit recently issued a decision holding that putative class members can benefit from equitable tolling even before a district court decides a motion for class certification. Aly v. Valeant Pharms. Int’l. Inc., No. 19-3326, __ F.3d __ (3d Cir. June 16, 2021).
The decision addresses a class action doctrine known as “American Pipe” tolling. Under American Pipe & Construction Company v. Utah, 414 U.S. 538 (1974), for which the doctrine is named, the statute of limitations for claims by putative class members is tolled from the time a putative class action complaint is filed until a class certification decision. The doctrine serves important policy goals. Without the rule, for example, putative class members would be forced to intervene or file their own claims while awaiting a decision on class certification in order to satisfy the statute of limitations. American Pipe, therefore, preserves the right for putative class members to file a timely complaint after class certification is denied while avoiding a multiplicity of lawsuits pending a class certification decision.
The Supreme Court has elaborated on the American Pipe doctrine in subsequent cases to clarify that tolling applies to separate lawsuits, not just motions to intervene, see Crown, Cork & Seal Co., 462 U.S. 345 (1983); that tolling only applies to statutes of limitations, not statutes of repose, see Cal. Public Employees’ Retirement System v. ANZ Securities, Inc., 137 S. Ct. 2042 (2017); and that tolling only applies to individual, rather than class, complaints, see China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018).
Continue reading “The Third Circuit Addresses American Pipe Tolling before a Class Certification Decision”
On behalf of four Texas law firms, Blank Rome on March 24, 2020, successfully obtained a dismissal of a putative legal malpractice class action in Gore, et al. v. Bruce Nagel, et al., filed in the United States District Court for the District of New Jersey, alleging that the law firms violated New Jersey Court Rule 1:21-7 by charging excessive contingency fees. Plaintiffs did not allege that the Texas law firms provided incorrect advice. In underlying personal injury litigation, the Texas law firms represented Debbie Gore, a Texas resident, and Doris Lance-Smith, an Alabama resident, against Ethicon, the manufacturer of pelvic mesh products for injuries sustained after surgical implantation of these products. On May 21, 2013, and June 2, 2012, respectively, Texas resident Gore and Alabama resident Lance-Smith, entered into retainer agreements with Texas counsel to pursue their mesh claims against Ethicon. Both Plaintiffs agreed to pay a 40 percent contingency fee, and allowed their counsel to associate with other law firms without increasing the required fee. Gore’s Retainer Agreement stated that Texas law governs and that any claims “arising under [the Gore Retainer] must be filed only in a court of competent jurisdiction in Harris County, Houston, Texas.” Lance-Smith’s Retainer Agreement did not have a choice of law provision. The Plaintiffs had sustained injuries in their home states after being implanted with the allegedly defective mesh products. 
Consumer class action litigation—often accusing the defendant company of deceiving its customers—strikes at the heart of a company’s reputation, goodwill, and brand—all of which are often built over the course of many years or decades. As such, these cases pose not only the threat of immense litigation and liability costs, but also irreparable, and potentially fatal, future damage to the company’s brand. By way of recent example, for the past several years, a putative class of plaintiffs from several states took aim at Tropicana’s Pure Premium (“TPP”) orange juice, claiming that the company deceived and misrepresented the public concerning its popular orange juice. 
A nationwide class of 17.9 million members was certified by a judge in the District of New Jersey last week in Mendez v. Avis Budget Group, Inc. and Highway Toll Administration LLC. The Court also granted Florida and New Jersey sub-classes. The suit alleges that Avis secretly charged drivers who rented cars for an electronic toll-payment service (“e-Toll”). Specifically, Plaintiff Jose Mendez alleged that his rental agreement with Avis did not specify he would be automatically enrolled as an e-Toll subscriber and charged an alleged convenience fee of $2.50 per day and up to $10 a week for the service, irrespective of whether he paid for the highway tolls he incurred. 
While questions remain about the Consumer Financial Protection Bureau’s (“CFPB”) future power, the agency, which was created by the Dodd-Frank Act in the wake of the 2008 economic crash, issued a powerful Final Rule that will ban companies from using class action waivers in arbitration clauses. The Final Rule will go into effect 60 days after its publication in the Federal Register, and arbitration agreements entered into 180 days after publication must comply with the new rule. Retail clients, banks and financial institutions, debt collectors, and credit card companies may be most impacted by the new rule, as they often utilize these arbitration clauses in consumer agreements as a less expensive—and private—alternative to litigation. The CFPB, which has faced intense scrutiny from the Trump Administration as well as challenges in federal courts,
n Chassen v. Fid. Nat’l Fin., Inc., 2016 U.S. App. LEXIS 16489 (3d Cir. N.J. Sept. 8, 2016), Plaintiffs represented a putative class of New Jersey real estate purchasers and refinancers who were allegedly overcharged fees in connection with the recording of their deeds and mortgage instruments. Plaintiffs alleged that Defendants charged them more than it cost to record these documents with the county clerk and pocketed the difference. Plaintiffs also alleged that the class claims totaled over $50 million.