“Supreme Court Decides When Clock Stops for State Claims”
Appellate Lawyers Association - The Brief 02/15/18 E. King Poor, William A. Walden
Joining state law claims in a federal suit is common. But until the Supreme Court decided Artis v. District of Columbia, 2018 WL 491524 (Jan. 22, 2018), this question remained unsettled: How much time does a plaintiff have to refile state law claims if all the federal claims are dismissed? In Artis, the Court provided a simple answer: a state statute of limitations is suspended while the federal case is pending and a plaintiff has the time remaining on that statute, plus 30 days, to refile.
Yet simple answers are not always the product of simple decisions. Here, in answering this narrow question of civil procedure, the Supreme Court split five-to-four. Justice Ginsberg authored a majority opinion relying on the textualism championed by the late Justice Scalia. Yet Justice Gorsuch’s dissent harkened back to the common law of the 1600s and argued that the majority’s position was not only contrary to the principles of federalism, but unconstitutional.
“Tolling” Means What the Text Says
Employment cases, like many federal suits, often join state law claims under a federal court’s “supplemental jurisdiction.” The Artis case followed that pattern. After being terminated from her job with the District of Columbia, the plaintiff brought suit in federal court and joined D.C. law claims in her suit. Later, the court dismissed the federal claims without deciding those brought under D.C. law.
Section 1367(d) of the Judicial Code (28 U.S. C. § 1367(d)) governs how much time a plaintiff has to refile in state court, after any federal claims are dismissed. It states that the time to refile in state court is “tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.”
In Artis, when the case was filed, almost two years remained on D.C.’s three-year statute of limitations, but by the time that the case was dismissed, the entire three-year period had elapsed. The plaintiff then filed suit in a D.C. court 59 days after the dismissal. That court dismissed the new case as untimely. It concluded that § 1367(d) did not suspend the running of the statute, and therefore, filing 29 days after the 30-day grace period was too late. The D.C. Court of Appeals affirmed following a ruling by the California Supreme Court, which in turn, conflicted with decisions from other state supreme courts.
The Supreme Court took the case to resolve this division of authority. Writing for the majority, Justice Ginsburg recognized that the case turned on the statute’s use of the word “tolled.” The Court noted that while “toll” may have other meanings (something that bells do or that drivers pay on a highway), in the context of statutes of limitations, it meant to suspend, or as the Court put it, “stop the clock.” To reach this conclusion, the Court focused on the text of the statute and stated that not only did the dictionary treat “toll” as suspending or stopped, the Court’s own decisions have consistently treated the word the same way. It also pointed out that adding a brief “grace period” such as 30 days, is “not unusual in stop-the-clock statutes.”
Finally, the Court was unpersuaded by the dissent’s argument that a stop-the-clock interpretation of “tolling” violated the Necessary and Proper Clause of the United States Constitution as a federal intrusion on state control of statutes of limitations. In rejecting this argument, the Court relied on its earlier precedent that § 1367(d) was necessary to the “administration of justice in federal court,” because it keeps plaintiffs from having to file in both federal and state courts for an action arising from the same event. The Court explained that whether Congress chose to use a stop-the-clock approach or a 30-day grace period was a matter within its discretion that did not implicate the Constitution.
Dissent: Stop-the-Clock Contrary to Common Law, Federalism and the Constitution
Justice Gorsuch argued in his dissent that, “It may be only a small statute that we are interpreting, but the result that the Court reaches today represents no small intrusion on traditional state functions and no small departure from our foundational principles of federalism.” In particular, he maintained that § 1367(d) grew out of a “rich common law and statutory tradition” that would have interpreted the word “tolling” to mean only a grace period, not a suspension of the statute. Relying on case law from as far back as the early 1600s, he stated that the common law provided only for enough time to “journey” to a new court after another case was dismissed.
The dissent also contended the majority’s stop-the-clock interpretation violated the Necessary and Proper Clause. Claiming that this interpretation unnecessarily intrudes on the ability of states to regulate their own statutes of limitation, the dissent concluded that “The Court today clears away a fence that once marked a basic boundary between federal and state power.”
Despite the varying arguments in Artis, the basic rule to emerge from the case is still straightforward: State claims may be refiled within the time remaining on a statute of limitations when the case was filed, plus 30 days. That may be a short period if the case was filed near the end of the statute. Or it may be lengthy, if the case was filed when months or even years remained before the statute expired.
As a result, defendants in particular should be mindful of the need to preserve all evidence and maintain litigation holds even after all the federal claims have been dismissed, when any state claims are still undecided. Any evidence preservation should remain in place until there is confirmation that the remaining periods for any state statute of the limitations, plus 30 days, have expired.