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The class stops the clock: some injured people don't consider litigation until it seems too late. But a decades-old Supreme Court decision may help you save an apparently time-barred claim.

Article Excerpt
A highly publicized trial in a prescription drug litigation has begun. More than two years ago a drug company pulled its heavily marketed prescription medication off the market. The recall confirmed that the drug was associated with a rare but life-threatening condition. Within days of the announcement, a group of lawyers filed a class action that asserted personal injury claims on behalf of all those who had taken the drug.

Your phone rings. The caller explains that she has seen the media coverage, had taken the drug herself, and had been hospitalized for the condition the drug is known to cause. The bad news is it happened three years before the manufacturer withdrew the drug and more than five years ago today.

Calculated from the date of her hospitalization, the two-year statute of limitations has long since expired. Your state, like most, has a discovery rule, which says the limitations period begins to run on the day the plaintiff knew or should have known the cause of her injury. The latest the caller could have discovered that the drug caused her injury was the date the manufacturer announced its withdrawal--more than two years ago.

While it appears the passage of time has resulted in a statutory windfall for the drug company, you may be able to save this apparently time-barred claim.

In American Pipe & Construction Co. v. Utah, the U.S. Supreme Court held that, once filed, a class action tolls the statute of limitations tot all asserted class members. (1) Every federal appeals court, along with courts in 35 states and Puerto Rico, has addressed this issue.

With so many decisions and ranch discussion, it should come as no surprise that the rule announced in American Pipe is not simple. Lawyers relying on American Pipe must exercise caution, be cause a mistake may result in summary judgment.

The seminal cases

Just 11 days before the statute of limitations would have run, the state of Utah filed a class action suit against American Pipe and Construction Co. alleging violations of the Sherman Act. A federal trial court denied class certification tot lack of numerosity, and more than 60 members of the failed class moved to intervene. The court denied intervention, finding the statute of limitations had expired on the interveners' claims while the class action was pending. The Ninth Circuit Court of Appeals reversed, and the Supreme Court affirmed, holding,

[A]t least where class stares has been denied solely because of failure to demonstrate that "the class is so numerous that joinder of all members is impracticable," the commencement of the original class suit tolls the running the statute of limitations for all purported members of the class who make timely motions to intervene after the court has found the suit inappropriate for class action status. (2)

The Court reasoned that a Federal Rule of Civil Procedure 23 class action is a representative suit--a named plaintiff who files a class action does so on behalf of himself or herself and all asserted class members. Thus, a class action satisfies the purposes of the statute of limitations when the complaint provides notice to the defendant of the nature of the claims against it and the number and generic identities of the class members.

In addition, the Court said, class actions are designed to reduce court filings by encouraging class members to rely on the class suit to protect their interests. The class certification decision can take years. Without tolling, a class certification failure would deny class members whose limitations period expired in the interim the chance to have their cases decided on the merits. To protect themselves, class members would be forced to file motions to join or intervene before their limitations periods expired and before the class certification decision. The Court reasoned these were precisely...

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