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Thursday, July 2, 2015

Falk v. Children’s Hospital Los Angeles: Court of Appeal Considers Statute of Limitations Tolling During Class Action

Falk v. Children’s Hospital Los Angeles (6/3/15, pub. 6/24/15) --- Cal.App.4th --- concerns whether the filing of a class action tolls the statute of limitations for claims made in a second class action. A series of wage and hour class actions were filed against Children’s Hospital Los Angeles (CHLA): 
Palazzolo v. CHLA was filed on 5/1/07 and dismissed following summary judgment on 4/7/09. The court did not address class certification. The Court of Appeal affirmed, and remittitur issued on 2/3/11. 
Mays v. CHLA was filed on 1/27/12.  
Falk v. CHLA was filed on 12/3/12. 
CHLA moved for summary judgment in Falk, arguing that Palazzolo and Mays did not toll the statute of limitations, and Falk's claims were not timely because Falk's employment ended on 8/25/06, more than four years before she filed her action. The trial court agreed and entered judgment against Falk. The Court of Appeal affirmed in part and reversed in part, holding as follows:

Under American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538 and cases that followed, the statute of limitations on putative class members' claims may be tolled while class litigation proceeds. Tolling does not apply, however, if the court denies certification for a "reason that would be equally applicable to any later suit," for example, if the court denies certification for lack of numerosity, commonality, or manageability.

Tolling also does not apply where the initial class action fails to "provide the defendant with sufficient notice of the substantive claims brought against it as well as the 'number and generic identities of the potential plaintiffs.'" "The claims in the first action need not necessarily be identical to the ones in the subsequent action, but they must be substantively similar, based on the same claims and subject matter and similar evidence."

Tolling applied during the Palazzolo action because the court did not deny certification at all, let alone for a "reason that would be equally applicable to any later suit." While Palazzolo alleged violations "generically," and Mays and Falk pled them more specifically, Palazzolo and Falk raise the same overtime, meal period, and rest period claims.

Tolling began in 2007, when Palazzolo was filed, and it continued through 2011, when the Court of Appeal issued the remittitur in the Palazzolo appeal. "Under the somewhat unique circumstances here, where no certification decision was made before the action was dismissed, tolling until the date the remittitur issued, thereby conclusively ending the case and any opportunity putative class members might have had to intervene in Palazzolo, is equitable."

Tolling applied to Falk's alleged class claims, rather than applying only to her individual claims. "Because there was no ruling in Palazzolo implicating any deficiency in the putative class (as opposed to Palazzolo’s individual claims), Falk may file a successive class action."

The opinion is available here

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