This "blurring," if you will, has strayed into the civil arena as well. Of course, the "infancy" of a would-be plaintiff should properly toll the relevant statute -- which is usually three years for a tort -- until the plaintiff reaches majority. If a tortious event hypothetically occurred on July 4, 2000, when the would-be plaintiff was 8 years old, the statute would be tolled until 10 years later. Once the would-be plaintiff achieves majority in 2010, he may proceed with an allegation of liability against a corporation for the conduct of its employee under the doctrine of respondeat superior, and in fact he has three years starting July 4, 2010 to do so.
But let's tweak the hypothetical and say that the would-be plaintiff was already an adult in the eyes of the law on July 4, 2000, when the tortious event occurred. Let's say that he did nothing regarding the tort, perhaps because he did not realize the corporation's role in it. Instead, 12 years later, representatives of the corporation come forward, stating that they have just become aware of the misconduct of one of the corporation's employees -- and misleadingly so, because the corporation was actually aware, or at least should have been aware, of the wrongdoing long before. In this scenario, 12 years have elapsed since the offending act in question. And, because the plaintiff was an adult when the tortious event occurred, the statute would likely "run" at the conclusion of the three-year limitations period, which would be July 4, 2003. Does this seem fair? Assuming these facts, how long (if at all) will the statute be tolled? In other words, for how long will the defendant corporation remain "equitably estopped" from asserting the running of the statute of limitations?
On the one hand, we empathize with the potential plaintiff, particularly where deplorable facts deny "legal sympathy" for an accused. On the other hand, isn't there a point in time (or, more importantly, shouldn't there be one?) when the law would say that "it's just not fair to expose a wrongdoer to the potential of a lawsuit for something that happened too long ago"?
Justice Oliver Wendell Holmes Jr. once said that hard cases make bad law. Sometimes, however, hard cases don't have the chance to make bad law because they settle out before the Law is required to act. Here's just one example to illustrate the point: Horrendous though the conduct of the Swiss banks was in appropriating Holocaust-era deposits (and even putting the question of jurisdiction of the American courts to entertain such lawsuits aside), the applicability of the relevant statutes of limitation and the legitimacy of a "tolling" for more than 40 years until the class action lawsuits were initiated were never decided. Instead, the offending banks settled and paid out extraordinary sums. Had the merits of the time-bars been litigated, the cases may well have been decided in favor of the banks.
Politically incorrect as it might be to say so, the courts' occasional willingness to find tolling exceptions sometimes encourages class action plaintiffs to threaten, or even file, lawsuits way outside the standard statute of limitations period in hopes of cajoling settlements from defendants who actually have the "legal" ability to assert valid time-bars to lawsuits. Is there always a benefit in tolling the statutes of limitation for seemingly long periods of time? The answer to that is often a blur.
Finally, we would be remiss if we did not note, approvingly, the U.S. Supreme Court's hot-off-the-presses decision on February 27 in Gabelli v. Securities and Exchange Commission, in which the court unanimously decided that in an enforcement action for fraud the SEC was required to initiate proceedings within five years of the action's "accrual," not the likely later date of its discovery. Clearly, the right result -- but, in so deciding, the court sharply distinguished a government enforcement action from a private lawsuit where the plaintiff might not be in the same position, or of a same mind, to promptly initiate a claim.
However, it may well be, in this litigious age, that the courts should seriously reconsider that distinction and its vitality going forward, given the important societal value of repose.
Joel Cohen practices white-collar criminal defense law at Stroock & Stroock & Lavan. He also teaches Professional Responsibility at Fordham Law School. The author is a regular columnist for Law.com. The views expressed are his personal opinions.
