Circuit courts of appeal are solidifying the reach of the Supreme Court’s June 2018 decision in China Agritech v. Resh and curtailing the availability of equitable tolling in class contexts. The Supreme Court’s decision in China Agritech, which we previously previewed and attended oral arguments for, held that the tolling principles announced in its earlier American Pipe decision do not allow absent class members to file follow-on class action lawsuits where the statute of limitations has otherwise expired on their claims. Recent decisions across several circuit courts of appeal have confirmed our prediction regarding the reexamination of class cases relying upon American Pipe and reigned in plaintiffs’ reliance on tolling in class contexts.
A recent decision in Conover v. Patriot Land Transfer LLC involves what appears to be a run-of-the-mill Section 8 RESPA claim that a title agency supplied borrower leads and data lists in return for lender referrals to the title company. Given that this decision was issued in the context of a motion to dismiss, the well-pleaded allegations were accepted as true and the merits of the allegations (and any Section 8(c) defenses) have not been evaluated, and we don’t know whether the allegations are in fact true or whether section 8(c) defenses exist. The decision sheds some light, however, on how lower courts are approaching RESPA’s statute of limitation and what is a sufficient pleading to pursue an equitable tolling argument for plaintiffs.
In Nutraceutical Corporation v. Lambert, No. 17-1094, 586 U.S. __ (Feb. 26, 2019), the United States Supreme Court once again endorsed the old adage, “When you snooze, you lose”—at least sometimes. Under Federal Rule of Civil Procedure 23(f), either side can file for a permissive appeal of a district court’s adverse class certification (or decertification) ruling. However, Rule 23(f) provides that a court of appeals may only permit an appeal if the petition seeking “permission to appeal is filed with the circuit clerk within 14 days after the order is entered.” Fed. R. Civ. P. 23(f). (Rule 23(f) has been amended since the case began, but the difference is not material to the Supreme Court’s decision. See Nutraceutical, slip op. at 3 n.2.) While courts of appeals have taken various equitable approaches that have effectively tolled or extended that time period, the Supreme Court just put more bite into that 14-day limitation.
Ninth Circuit Court of Appeals interprets the FCRA
On January 29, 2019, the Ninth Circuit Court of Appeals issued a far-reaching opinion that will likely impact the hiring process of prospective employers who conduct background checks on applicants.
Desiree Gilberg (“Gilberg”) brought a class action suit against prospective employers (collectively, “CheckSmart”) alleging violations of the Fair Credit Reporting Act (the “FCRA”) and California’s Investigative Consumer Reporting Agencies Act (the “CICRAA”). The FCRA requires employers who use consumer reports as part of the hiring process to provide an applicant with a “clear and conspicuous” disclosure that the consumer report will be used “in a document that consists solely of the disclosure.” 15 U.S.C. 1681b(b)(2)(A)(i) (emphasis added). The CICRAA has similar requirements. See Cal. Civ. Code §§1785.20(5)(a) & 1786.16(a)(2)(B).
On December 7, 2018, a federal court in Maryland issued an important ruling in a Real Estate Settlement Procedures Act (“RESPA”) case (“Baehr”), granting a defense motion for summary judgment. The court dismissed the action entirely for lack of Article III standing and because the plaintiffs could not equitably toll RESPA’s statute of limitations. Foley partners and long-time blog contributors Jay Varon and Jennifer Keas served as lead counsel for the defense. This is a noteworthy development for RESPA cases and consumer class actions generally, as the court interpreted and relied on standards set forth by the U.S. Supreme Court in Spokeo, Inc. v. Robins and Menominee Indian Tribe v. United States. .