Collins v. Vill. of Palatine

• Decision Date: 16 November 2017
• Docket Number: No. 16-3395,16-3395
• Citation: 875 F.3d 839
• Parties: Michael COLLINS, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. VILLAGE OF PALATINE, ILLINOIS, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

875 F.3d 839

Michael COLLINS, on behalf of himself and all others similarly situated, Plaintiff-Appellant,

v.VILLAGE OF PALATINE, ILLINOIS, Defendant-Appellee.

No. 16-3395

United States Court of Appeals, Seventh Circuit.

Argued February 7, 2017

Decided November 16, 2017

Rehearing and Rehearing En Banc Denied December 13, 2017

Martin J. Murphy, Attorney, Law Office of Martin J. Murphy, Chicago, IL, for Plaintiff–Appellant.

Michael E. Kujawa, Attorney, Schain Banks Kenny & Schwartz, Brandon K. Lemley, Attorney, Querrey & Harrow, Chicago, IL, for Defendant–Appellee.

Before Bauer, Posner,^* and Sykes, Circuit Judges.

Sykes, Circuit Judge.

When a plaintiff files a complaint on behalf of a proposed class, the statute of limitations for the claim is tolled for each member of the class. Am. Pipe & Constr. Co. v. Utah , 414 U.S. 538, 550, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974). The tolling continues until the case is "stripped of its character as a class action." United Airlines, Inc. v. McDonald , 432 U.S. 385, 393, 97 S.Ct. 2464, 53 L.Ed.2d 423 (1977) (quoting FED. R. CIV. P. 23 advisory committee's note to 1966 amendment). This "stripping" occurs immediately when a district judge denies class certification, dismisses the case for lack of subject-matter jurisdiction without deciding the class-certification question, or otherwise dismisses the case without prejudice. The question before us is whether a dismissal with prejudice also strips a case of its class-action character. The district court concluded that it does. We agree and adopt a simple and uniform rule: Tolling stops immediately when a class-action suit is dismissed—with or without prejudice—before the class is certified.

I. Background

On a summer day in June 2007, a police officer in the Village of Palatine issued a parking ticket to Michael Collins. When Collins returned to his car later that day, he found the bright yellow ticket under his car's windshield wiper blades. The ticket listed personal information about him, including his name, address, driver's license number, date of birth, sex, height, and weight. Collins claims that the display of his personal information violated the Driver's Privacy Protection Act ("DPPA"), 18 U.S.C. §§ 2721 et. seq. So on March 29, 2016, he sued the Village of Palatine on behalf of himself and a proposed class.

Ordinarily the long delay in filing suit—almost nine years—would be fatal to his claim; the DPPA's statute of limitations is four years. But the timeliness of Collins's claim is complicated by the earlier filing of a nearly identical class complaint against Palatine.

Jason Senne faced a similar ticketing scenario. He left his car illegally parked overnight, and a Palatine police officer placed a parking ticket displaying his personal information on the car's windshield. On August 27, 2010, Senne sued on behalf of himself and all similarly situated individuals alleging that Palatine violated the DPPA. Because the lawsuit was brought as a class action, the filing of the complaint tolled the DPPA's statute of limitations for everyone in the proposed class.

Senne's case had a short life in the district court. On September 22, 2010, before Senne filed a motion to certify a class, the district court granted Palatine's motion to dismiss for failure to state a claim. A panel of this court affirmed the dismissal, but the full court reheard the case and reversed. See Senne v. Village of Palatine , 695 F.3d 597, 599–600 (7th Cir. 2012) (en banc).

On remand Senne moved to certify a class. The district judge heard argument on the motion but deferred ruling, instead inviting Palatine to file a motion for summary judgment. Palatine complied. The judge entered summary judgment for the Village and "terminated" the motion for class certification as moot. See Senne v. Village of Palatine , 6 F.Supp.3d 786, 797 (N.D. Ill. 2013). We affirmed, Senne v. Village of Palatine , 784 F.3d 444 (7th Cir. 2015), and on November 2, 2015, the Supreme Court denied certiorari, ––– U.S. ––––, 136 S.Ct. 419, 193 L.Ed.2d 318 (2015).

On the day the Supreme Court denied certiorari, Senne's attorney, Martin Murphy, filed a successor class action on behalf of himself and a proposed class. His complaint was just a placeholder to preserve the class's claims. Murphy later filed this suit naming Collins as the class representative; he then sought voluntary dismissal of his own complaint.

Palatine moved to dismiss, arguing that Collins's claim was time-barred because the statute of limitations resumed when the district court dismissed Senne's lawsuit. Collins responded (through Murphy, his counsel) that the dismissal on timeliness grounds was inappropriate at the pleadings stage, and even if procedurally proper, the suit was timely because the limitations period was tolled until the Supreme Court denied Senne's petition for certiorari. He also separately moved to certify a class.

The judge agreed with Palatine that Collins's claim was time-barred and granted the motion to dismiss. The judge summarily denied the motion for class certification, apparently on mootness grounds, though he did not give a reason. This appeal followed.

II. Discussion

Although the statute of limitations is an affirmative defense, dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure is appropriate if the complaint contains everything necessary to establish that the claim is untimely. See Bonnstetter v. City of Chicago , 811 F.3d 969, 974 (7th Cir. 2016). Moreover, judicial notice of public court documents is appropriate when ruling on a Rule 12(b)(6) motion to dismiss. White v. Keely , 814 F.3d 883, 885 n.2 (7th Cir. 2016). Because the complaint and court documents contain everything necessary to decide the timeliness issue here, it was procedurally proper at the pleadings stage for the judge to consider whether Collins's claim was barred by the statute of limitations.

We review the dismissal order de novo, accepting all well-pleaded facts in the complaint as true. See McCauley v. City of Chicago , 671 F.3d 611, 615–16 (7th Cir. 2011). Here, timeliness turns on the question of tolling. If tolling ended and the limitations clock resumed when the Senne suit was dismissed, Collins's claim is untimely. But if tolling continued until the appeals in Senne were exhausted, then Collins's claim is still live. This is a pure question of law: At what point does class-action tolling end?

A. Tolling the Statute of Limitations

To determine what starts and stops the limitations clock in the class-action context, we begin with the seminal case, American Pipe & Construction Co. v. Utah , 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974). In American Pipe , Utah sued several companies alleging that they colluded to drive up the price of steel and concrete pipe in violation of the Sherman Act. Id. at 541, 94 S.Ct. 756. The suit was filed as a class action with just 11 days left under the applicable statute of limitations. Id. Six months later the district judge held that the suit could not be maintained as a class action. Id. at 542, 94 S.Ct. 756. Within eight days of that order, more than 60 towns, municipalities, and water districts claiming to be members of the original class moved to intervene as plaintiffs. Id. at 543–44, 94 S.Ct. 756. The question facing the Supreme Court was whether those motions to intervene were time-barred or whether Utah's class complaint tolled the statute of limitations for the class.

The Supreme Court first clarified that when federal law supplies the period of limitations, federal courts have the "power to toll statutes of limitations." Id. at 558, 94 S.Ct. 756. The Court then moved to the main event, holding that "the commencement of the original class suit toll[ed] the running of the statute for all purported members of the class who ma[d]e timely motions to intervene after the court ... found the suit inappropriate for class action status." Id. at 553, 94 S.Ct. 756. In other words, members of the putative class still had live claims and could intervene because the filing of the class action tolled the statute of limitations for each of their claims.

The Supreme Court grounded its decision on concerns about judicial efficiency in the class-action context. The Court explained that without tolling, only "those potential members of the class who had earlier filed motions to intervene in the suit" could participate, which would incentivize all potential class members "to file protective motions to intervene or to join in the event that a class was later found unsuitable." Id. If every class member rushed to intervene, class actions would lose the "efficiency and economy of litigation[,] which is a principal purpose of the procedure." Id. On the other hand, the twin policies underlying statutes of limitations—"ensuring essential fairness to defendants and ... barring a plaintiff who has slept on his rights"—would not be undermined by tolling. Id. at 554, 94 S.Ct. 756 (internal quotation marks omitted). That is so, the Court said, because the commencement of a class suit "notifies the defendants not only of the substantive claims being brought against them, but also of the number and generic identities of the potential plaintiffs who may participate in the judgment." Id. at 555, 94 S.Ct. 756.

In the years following American Pipe , appellate courts considered whether its tolling rule applies only to class members seeking intervention after the denial of class certification or if it also applies to class members who file separate actions. See Parker v. Crown, Cork & Seal Co. , 677 F.2d 391 (4th Cir. 1982), aff'd 462 U.S. 345, 103 S.Ct. 2392, 76 L.Ed.2d 628 (1983) ; Pavlak v. Church , 681 F.2d 617 (9th Cir. 1982), vacated and remanded , 463 U.S. 1201, 103 S.Ct. 3529, 77 L.Ed.2d 1382 (1983) ; Stull v. Bayard , 561 F.2d 429 (2d Cir. 1977). In Crown, Cork & Seal Co. v. Parker , the Supreme Court resolved that important question, refusing to confine the American Pipe rule to interveno...