Class Action – Statute of Limitations

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7^th Circuit Court of Appeals

Case Name: Michael Collins v. Village of Palatine, Illinois

Case No.: 16-3395

Officials: BAUER, POSNER,* and SYKES, Circuit Judges.

Focus: Class Action – Statute of Limitations

When a plaintiff files a complaint on behalf of a proposed class, the statute of limitations for the claim is tolled for each member of the class. Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 550 (1974). The tolling continues until the case is “stripped of its character as a class action.” United Airlines, Inc. v. McDonald, 432 U.S. 385, 393 (1977) (quoting FED. R. CIV. P. 23 advisory committee’s note to 1966 amendment). This “stripping” occurs immediately when a district judge denies class certification, dismisses the case for lack of subject-matter jurisdiction without deciding the class-certification question, or otherwise dismisses the case without prejudice. The question before us is whether a dismissal with prejudice also strips a case of its class-action character. The district court concluded that it does. We agree and adopt a simple and uniform rule: Tolling stops immediately when a class-action suit is dismissed—with or without prejudice—before the class is certified.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.