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Product liability cases are often brought as federal class actions. Product liability classes are rarely certified, however, and when they are certified at the trial court level, there has been a mounting trend for such certifications to be reversed on appeal. The 6th U.S. Circuit Court of Appeals’ recent reversal of a class action settlement in In re Telectronics Pacing Systems, Inc., 221 F.3d 870 (6th Cir. 2000), is the latest in an unbroken line of eight Supreme Court and federal appellate court cases reversing class certification in product liability cases. [FOOTNOTE 1] When class certification is denied or reversed in a product liability case, it is not uncommon for individuals who would have been members of the class to file their own individual product liability lawsuits. A question frequently arising in such later filed individual suits is: What effect, if any, did the filing of the federal class action have on the applicable state statute of limitations? It often has been assumed that the filing of a federal product liability class action tolls the statute of limitations from the date the action was commenced until the date class certification is denied or reversed. However, recent case law suggests that the tolling effect of a product liability class action may vary from state to state, and that practitioners should not simply assume that the filing of a federal class action automatically tolls the statute of limitations for absent class members. EARLY CASE LAW The genesis of the notion that a federal class action automatically tolls the statute of limitations was the U.S. Supreme Court’s decision in American Pipe and Constr. Co. v. Utah, 414 U.S. 538 (1974). American Pipewas a case arising under federal antitrust law. The state of Utah had filed suit on behalf of all government entities that had bought cement and steel pipe at inflated prices as a result of a price-fixing conspiracy. When class certification was denied, various government entities, which Utah had attempted to represent in the class action, sought to intervene in the lawsuit. The trial court had ruled that the intervenors’ individual claims were barred by the statute of limitations, but the Supreme Court, affirming a decision of the Court of Appeals, held that the federal antitrust statute of limitations was equitably tolled during the pendency of the class action. The Supreme Court reasoned that the purpose of the statute of limitations was not impaired by tolling, because the class suit provides defendant with notice, within the limitations period, of the “essential information necessary to determine both the subject matter and size of the prospective litigation.” 414 U.S. at 555. A “contrary rule… would deprive Rule 23 class actions of the efficiency and economy of litigation” because “[p]otential class members would be induced to file protective motions to intervene or to join in the event that a class was later found unsuitable.” Id.at 553. The argument that statutes of limitations were automatically tolled during the pendency of a federal class action gathered additional steam in Crown Cork & Seal Co. v. Parker, 462 U.S. 345 (1983), a case arising under the federal antidiscrimination laws. There, the Supreme Court extended the equitable tolling rule of American Pipeto apply not only to absent class members who sought to intervene in the initial class action, but also to those who filed separate, individual actions following denial of class certification. Crown Cork & Sealand American Pipeeach involved a federal cause of action. Product liability cases, of course, derive from state law. Recent decisions suggest that the equitable tolling doctrine of American Pipeand Crown Cork & Sealshould not be applied to state law causes of action. Instead, the tolling issue must be decided under state law. In re Norplant Contraceptive Prods. Liab. Litig., 173 F.R.D. 185, 188 n.10 (E.D. Tex. 1997) (“application of an equitable tolling rule in a diversity action is an issue of state law”); West Haven School Dist. v. Owens-Corning Fiberglas Corp., 721 F. Supp. 1547, 1554 (D. Conn. 1988) (“question [of equitable tolling] must be resolved by reference to state, not federal, tolling law”). A number of states have held that equitable tolling does not apply to product liability class actions. For example, in Jolly v. Eli Lilly & Co., 751 P.2d 923 (Cal. 1988), the California Supreme Court held that the filing of a class action on behalf of children injured by their mothers’ ingestion of DES during pregnancy did not toll the statute of limitations. The court reasoned that class actions involving allegedly defective drugs were unlikely to be certified because of the need for individualized proof, which varies considerably from claimant to claimant. Because class certification was unlikely to be granted, potential plaintiffs were unjustified in withholding their own suits in reliance on the class action. Moreover, the filing of a putative class action did not provide the defendant with reasonable notice of the outstanding claims because of the “wide disparity” in the factual and legal circumstances of each claim. 751 P.2d at 936. Similarly, in Bell v. Showa Denko K.K., 899 S.W.2d 749 (Tex. Ct. App. 1995), the Texas Court of Appeals held that a federal class action did not toll the statute of limitations in a product liability case. The court refused to apply American Pipeto state practice, and distinguished an earlier Texas decision, Grant v. Austin Bridge Constr. Co., 725 S.W.2d 366 (Tex. Ct. App. 1987). Bellruled that tolling might be appropriate when, as in Grant, the class consists of readily identifiable claimants and certification is denied for lack of numerosity, rather than a lack of commonality. In such cases, the filing of a class action provides the defendant with notice of the type and potential number of claims against it. Product liability class actions, by contrast, usually are brought on behalf of large numbers of claimants unknown to the defendant, and denial of certification is usually based on the fact that common issues do not predominate. Bellruled that in such circumstances the named plaintiff’s claims did not provide adequate notice to the defendant of any absent class member’s claim, so that tolling was inappropriate. 899 S.W.2d at 758. See also Vaught v. Showa Denko K.K., 107 F.3d 1137 (5th Cir.), cert. denied, 522 U.S. 817 (1997) (following Bell, the 5th Circuit held that Texas did not recognize equitable tolling in personal injury cases based on state law). EQUITABLE TOLLING On the other hand, in Staub v. Eastman Kodak Co., 726 A.2d 955 (N.J. App. Div.), cert. denied, 161 N.J. 334 (1999), a product liability case, the New Jersey court held that, because New Jersey has traditionally been “hospitable to equitably purposed procedural devices,” the equitable tolling doctrine should apply to toll the statute of limitations for individual claimants who would be members of a class if certified in another action. The court reasoned that the “efficient utilization of judicial resources and the reduction of costs to individual litigants” requires permitting individual claimants to refrain from filing suit pending a decision on class certification. 726 A.2d at 966. See also In re Factor VIII or IX Concentrate Blood Prod. Lit., 2000 WL 282787 (E.D. La. March 14). In deciding the equitable tolling question, some courts have distinguished between “intrajurisdictional” and “cross-jurisdictional” tolling. Intrajurisdictional tolling refers to class actions filed within the same jurisdiction as the subsequent individual action; cross-jurisdictional tolling refers to class actions filed in a jurisdiction different from the later action. Some states allow intrajurisdictional equitable tolling, but do not permit cross-jurisdictional equitable tolling. For example, a Texas federal court in In re Norplant Contraceptive Prods. Liab. Lit., 961 F. Supp. 163 (E.D. Tex. 1997), held that the Texas statute of limitations was tolled by the filing of a class action in the same federal district court, distinguishing Bellon the ground that it involved a class action filed in New Mexico. In Portwood v. Ford Motor Co., 701 N.E.2d 1102, 1104-05 (Ill. 1998), cert. denied,525 U.S. 1148 (1999), the court refused to allow cross-jurisdictional equitable tolling, although Illinois did permit equitable tolling for class actions filed within Illinois state courts. The Portwoodcourt held that the policy considerations favoring tolling for class actions brought in the same court system did not apply where the class action was filed in federal court or in another state and expressed concern that permitting cross-jurisdictional tolling would encourage plaintiffs from across the county to file suit in Illinois following denial of a class certification. 701 N.E. 2d at 1104. A thorough analysis of cases in the various states on the issue of equitable tolling in the cross-jurisdictional context is contained in Wade v. Danek Medical Inc., 182 F.3d 281 (4th Cir. 1999). In that case, the 4th Circuit held that Virginia would not apply interjurisdictional tolling because the state has no interest “in furthering the efficiency and economy of the class action procedures of another jurisdiction, whether those of the federal courts or those of another state” and because of a concern that “Virginia would be faced with a flood of subsequent filings once a class action in another forum is dismissed, as forum-shopping plaintiffs from across the country rush into the Virginia courts to take advantage of its cross-jurisdictional tolling rule.” 182 F.3d at 287. See also In re “Agent Orange” Prod. Liab. Litig., 818 F.2d 210, 213 (2d Cir. 1987) (refusing to read cross-jurisdictional equitable tolling rule into Hawaii law); Barela v. Showa Denko K.K., 1996 WL 316544, at *4 (D.N.M. Feb. 28, 1996) (same for New Mexico law). CHECK STATE CASE LAW In sum, the rules governing equitable tolling during the pendency of a class action vary widely from state to state. Practitioners must analyze a state’s prior case law carefully to see if the equitable tolling doctrine applies in product liability actions. In prosecuting or defending any action where equitable tolling may be applicable, it is important to determine the jurisdiction in which the initial class action was commenced, the reasons for the denial of class certification and the individual plaintiff’s knowledge or lack of knowledge of the prior class action. The jurisdiction of the initial class action is important in states that distinguish between intra- and cross-jurisdictional equitable tolling. The reasons for the denial of certification are important because courts are more willing to apply equitable tolling when class certification is denied for lack of numerosity as opposed to a failure to demonstrate common issues of fact or law. Additionally, an individual plaintiff’s lack of knowledge of the pendency of a class action necessarily means that the plaintiff was not relying on the class action in delaying the filing of his own action and equitable tolling is less likely to apply. Finally, many states have yet to address the tolling issue, or have applied tolling but not in a product liability case. In those states, practitioners must carefully consider whether tolling will, in fact, apply in a product liability case. ::::FOOTNOTES:::: FN1 See Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999); Amchem Prod. Inc. v. Windsor, 521 U.S. 591 (1997); Valentino v. Carter-Wallace Inc., 97 F.3d 1227 (9th Cir. 1996); Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir. 1996); In re American Medical Systems Inc., 75 F.3d 1069 (6th Cir. 1996); In re General Motors Corp. Pick-up Truck Fuel Tank Prod. Liab. Lit., 55 F.3d 768 (3d Cir.), cert. denied sub. nom General Motors Corp. v. French, 516 U.S. 524 (1995); In the Matter of Rhone-Poulenc Rorer Inc., 51 F.3d 1293 (7th Cir.), cert. denied sub. nom Grady v. Rhone-Poulenc Rorer Inc., 516 U.S. 867 (1995). Steven Glickstein is a partner at New York’s Kaye, Scholer, Fierman, Hays & Handlerand co-chairman of the firm’s Product Liability Practice Group. Lori B. Leskin is an associate at the firm and member of that group. Telephone: (212) 836-8000.

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