Adams Public School Dist. v. Asbestos Corp., Ltd.
| Decision Date | 22 November 1993 |
| Docket Number | No. 92-3276,92-3276 |
| Citation | 7 F.3d 717 |
| Parties | 86 Ed. Law Rep. 644 ADAMS PUBLIC SCHOOL DISTRICT, Plaintiff-Appellant, v. ASBESTOS CORPORATION, LTD., a foreign corporation; Atlas Turner, formerly known as Atlas Asbestos, Inc., a foreign corporation; H.K. Porter Company, formerly known as Pacific Asbestos Corporation, Company, Inc., a foreign corporation; North American Asbestos Control Corp., a wholly owned subsidiary of Cape Industries, London; Union Carbide Corporation, a foreign corporation; United States Gypsum Company, a Delaware corporation, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
David Thompson, Fargo, ND, for appellant.
Raymond Cullen, Philadelphia, PA (argued), Dennis J. Valenza, Kevin M. Ddonovan and Wickham Corwin (on the brief), for appellee.
Before JOHN R. GIBSON, Circuit Judge, BRIGHT, Senior Circuit Judge, and MORRIS SHEPPARD ARNOLD, Circuit Judge.
Adams Public School District appeals from a summary judgment holding its claims against Asbestos Corporation, Ltd. and six other asbestos companies are time-barred. The school district argues that the district court erred in applying the statute of limitations because the school district's participation in a national school district class action tolled its claims. We reverse and remand for further proceedings.
In the early 1960s, asbestos products were applied to walls and ceilings in the school district's buildings. In 1980, the United States Environmental Protection Agency investigated the presence of asbestos in the nation's schools, and ultimately promulgated regulations pursuant to the Toxic Substances Control Act, 15 U.S.C. §§ 2601-2629 (Supp. III 1991), requiring every public and private school in the country to test for the presence of asbestos. See 40 C.F.R. § 763.100 (1983). After Congress enacted the Asbestos School Hazard Detection and Control Act of 1980, 20 U.S.C. §§ 3601-3611 (Supp. III 1991), the United States Attorney General issued a report mandating abatement of the asbestos problem, and holding the asbestos industry responsible.
In an effort to recoup abatement costs, a class action on behalf of all school districts in the nation began in the United States District Court for the Eastern District of Pennsylvania in 1983. The suit named members of the asbestos industry, including several companies involved in this case, as defendants.
The Adams Public School District became aware that there was asbestos in its main school building when it received a laboratory report on May 27, 1983. The school district opted out of the national school class action on November 24, 1987. In late 1990, the school district filed this action in state court and it was removed to federal court on November 28, 1990. The asbestos companies filed a summary judgment motion arguing that North Dakota's six-year statute of limitations barred the school district's claims. See N.D.Cent.Code § 28-01-16 (1991).
The district court held that, under North Dakota law, a cause of action accrues, and the statute of limitations begins to run, when the plaintiff discovers facts that would place a reasonable person on notice that a potential claim exists. The district court found that the school district became aware of its asbestos problem in 1983, and thus, the statute of limitations began to run at that time. The court then rejected any argument that the statute of limitations should have been tolled while the school district was involved in the national class action. The court relied on language from American Pipe & Construction Company v. Utah, 414 U.S. 538, 554, 94 S.Ct. 756, 766, 38 L.Ed.2d 713 (1974), stating that it is unjust not to put the adversary on notice to defend within the period of the limitation. The district court then held that, despite the school district's participation in the class action, the asbestos companies were not put on notice of the claim within the prescribed six year period of limitation, and that the statute of limitations was not tolled during the pendency of the class action. Accordingly, the court then granted the defendants' motion for summary judgment.
On appeal, the school district argues that the district court erred in refusing to toll the running of the six-year statute of limitations for the period between January 17, 1983 and November 24, 1987, when the school district opted out of the national class action.
This case presents the novel question of how the American Pipe doctrine applies in diversity cases when the applicable state law does not provide for tolling. In American Pipe, the Court identified a strong federal interest in ensuring "the efficiency and economy of the class-action procedure." Chardon v. Fumero Soto, 462 U.S. 650, 661, 103 S.Ct. 2611, 2618, 77 L.Ed.2d 74 (1983). The Court concluded that tolling the applicable statute of limitations during the course of a party's participation 1 in a federal class action would prevent the "needless duplication of motions" and protective filings by parties seeking to preserve their rights during the pendency of the class action. American Pipe, 414 U.S. at 553-54, 94 S.Ct. at 766. The American Pipe rule is consistent with the purpose of statutes of limitation, which is to guarantee defendants fair and timely notice of "the substantive claims being brought against them" and "the number and generic identities of the potential plaintiffs." Id. at 555, 94 S.Ct. at 767. When the federal courts look to state law for the statute of limitations, the federal interest in procedural efficiency:
is vindicated as long as each unnamed plaintiff is given as much time to intervene or file a separate action as he would have under a state savings statute applicable to a party whose action has been dismissed for reasons unrelated to the merits, or, in the absence of a statute, the time provided under the most closely analogous state tolling statute.
Chardon, 462 U.S. at 661, 103 S.Ct. at 2618 (footnote omitted).
North Dakota has no general savings statute, nor have North Dakota courts...
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