Portwood v. Ford Motor Co.

• Decision Date: 01 October 1998
• Docket Number: No. 84488,84488
• Citation: 183 Ill.2d 459,233 Ill. Dec. 828,701 N.E.2d 1102
• Parties: , 233 Ill.Dec. 828, 37 UCC Rep.Serv.2d 1055 Gwendolyn PORTWOOD et al., Appellants, v. FORD MOTOR COMPANY, Appellee.
• Court: Illinois Supreme Court

Page 1102

701 N.E.2d 1102

183 Ill.2d 459, 233 Ill.Dec. 828, 37

UCC Rep.Serv.2d 1055

Gwendolyn PORTWOOD et al., Appellants, v. FORD MOTOR COMPANY, Appellee.

No. 84488.

Supreme Court of Illinois.

Oct. 1, 1998.

[183 Ill.2d 460] Jonathan Nachsin, Krislov[183 Ill.2d 461] & Associates, Ltd., Chicago, Beverly C. Moore, Jr., Moore & Brown, Washington, DC, for Gwendolyn Portwood.

Karen Kies DeGrand, Donohue Brown Mathewson & Smyth, Chicago, Richard C. Warmer, Carl R. Schenker, Jr., O'Melveny & Meyers LLP, Washington, DC, for Ford Motor Co.

James M. Beck, Pepper, Hamilton & Scheetz, LLP, Philadelphia, PA, Sarah L. Olson, Wildman, Harrold, Allen & Dixon, Chicago, for Product Liability Advisory Council.

Justice HEIPLE delivered the opinion to the court:

Gwendolyn Portwood and 51 other plaintiffs appeal the following holdings of the circuit and appellate courts: (1) the filing in federal court of a complaint seeking certification of a class action does not toll, or suspend, the Illinois statute of limitations during the pendency of that complaint; and (2) plaintiffs whose breach of warranty claims are dismissed by a federal court for lack of jurisdiction have six months to refile those claims in Illinois state court. We affirm both holdings.

BACKGROUND

On August 21, 1981, a group of plaintiffs filed a complaint in United States District Court for the District of Columbia seeking certification of a nationwide class action against defendant Ford Motor Company. The complaint alleged that thousands of people who purchased Ford automobiles between 1976 and 1979 sustained property damage as a result of collisions which occurred when the vehicles' transmissions shifted from "park" to "reverse" without warning. The district court initially certified a class action, but was reversed on appeal. Walsh v. Ford Motor Co., 807 F.2d 1000 (D.C.Cir.1986). On remand, the district court found class certification unwarranted, and also dismissed On May 14, 1991, plaintiffs filed this action in the circuit court of Cook County seeking certification of a nationwide class similar to that sought in Walsh. Of the named plaintiffs in the instant case, 47 were also named as plaintiffs in Walsh; the other five were unnamed members of the potential Walsh class.

[233 Ill.Dec. 829] the plaintiffs' individual claims for lack of federal jurisdiction. Walsh v. Ford Motor Co., 130 F.R.D. 260 (D.D.C.1990). The district court denied reconsideration on May 14, 1990.

The circuit court granted defendant's motion to dismiss the complaint as untimely. The court ruled that the statute of limitations for bringing suit in Illinois was not tolled, or suspended, by the filing in federal court of the Walsh class action complaint, and hence the claims of the five plaintiffs not named in Walsh were untimely. The court also ruled that under section 2-725 of the Uniform Commercial Code (Ill.Rev.Stat.1991, ch. 26, par. 2-725), the 47 plaintiffs named in Walsh had six months to bring suit in Illinois following dismissal by the federal district court. Because the instant complaint was not filed until one year after the dismissal of Walsh, the circuit court ruled that the claims of the 47 Walsh plaintiffs were also untimely. The appellate court affirmed the circuit court's dismissal of the complaint. Portwood v. Ford Motor Co., 292 Ill.App.3d 478, 226 Ill.Dec. 486, 685 N.E.2d 941 (1997). We granted leave to appeal, and now affirm.

ANALYSIS

I. Cross-Jurisdictional Class Action Tolling

In American Pipe & Construction Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), the United States Supreme Court held that the filing of a class action in federal district court tolls the running of the statute of limitations for all purported members of the class who make timely motions to intervene after the court has found the suit inappropriate for class action status. American Pipe, 414 U.S. at 553, 94 S.Ct. at 766, 38 L.Ed.2d at 726. This court subsequently adopted the American Pipe rule for class actions filed in Illinois state court. Steinberg v. Chicago Medical School, 69 Ill.2d 320, 342, 13 Ill.Dec. 699, 371 N.E.2d 634 (1977). The Supreme Court then extended American Pipe by holding that the filing of a class action in federal district court tolls the statute of limitations not just for those who move to intervene in the original suit after class status is denied, but also for those who subsequently file their own individual suits in federal court. Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 350, 103 S.Ct. 2392, 2395-96, 76 L.Ed.2d 628, 633 (1983).

The five instant plaintiffs who were not named as parties in the prior federal suit urge this court to apply the holding of Crown, Cork to toll the Illinois statute of limitations during the pendency in federal court of a complaint seeking class certification. These plaintiffs argue that when a federal court denies class certification, the tolling principle of Crown, Cork should apply to all purported class members who subsequently file individual suits, regardless of whether they file in federal or state court.

Statutes of limitation rest upon the premise that the right to be free of stale claims in time comes to prevail over the right to prosecute them. Golla v. General Motors Corp., 167 Ill.2d 353, 369, 212 Ill.Dec. 549, 657 N.E.2d 894 (1995). Limitation periods are designed to encourage claimants to pursue causes of action before memories have faded, witnesses have died or disappeared, and evidence has been lost. Chase Securities Corp. v. Donaldson, 325 U.S. 304, 314, 65 S.Ct. 1137, 1142, 89 L.Ed. 1628, 1635 (1945). Statutes of limitation thus promote predictability and finality. Golla, 167 Ill.2d at 370, 212 Ill.Dec. 549, 657 N.E.2d 894.

In American Pipe, the United States Supreme Court reasoned that tolling the statute of limitations for all purported class members upon the filing of a class action complaint would best promote the purposes of the class action procedure, which are efficiency and economy of litigation. American Pipe, 414 U.S. at 553-54, 94 S.Ct. at 766, 38 L.Ed.2d at 726-27. Without such a tolling rule, the Court explained, class members not named in the original complaint would feel Plaintiffs concede that both American Pipe and Crown, Cork concerned individual suits filed in federal court after denial of class certification in federal court. Plaintiffs nevertheless contend that the tolling principles of those cases are applicable as well to individual suits filed in Illinois state court after denial of class certification in federal court. We disagree.

                [233 Ill.Dec. 830] compelled to file motions to intervene in the action before the expiration of the limitation period in order to prevent loss of their claims in the event class status was ultimately denied after the limitation deadline.  American Pipe, 414 U.S. at 553, 94 S.Ct. at 766, 38 L.Ed.2d at 726.   The Court asserted that such "protective" filings would be unnecessarily duplicative and thus detrimental to the class action's goal of litigative efficiency.  American Pipe, 414 U.S. at 553-54, 94 S.Ct. at 766, 38 L.Ed.2d at 726-27.   Similarly, in Crown, Cork, the Court reasoned that tolling the statute of limitations for purported class members who file separate, individual suits after the denial of class status was likewise essential to prevent needless "protective" filings of such suits during the pendency of the class action complaint.  Crown, Cork, 462 U.S. at 350-51, 103 S.Ct. at 2396, 76 L.Ed.2d at 634
                

Tolling the statute of limitations for individual actions filed after the dismissal of a class action is sound policy when both actions are brought in the same court system. In such instances, failing to suspend the limitation period would burden the subject court system with the protective filings described by the Supreme Court in American Pipe and Crown, Cork. American Pipe, 414 U.S. at 553-54, 94 S.Ct. at 766, 38 L.Ed.2d at 726-27; Crown, Cork, 462 U.S. at 350-51, 103 S.Ct. at 2396, 76 L.Ed.2d at 634. Tolling the statute of limitations for purported class members who file individual suits within the same court system after class status is denied therefore serves to reduce the total number of filings within that system.

Tolling a state statute of limitations during the pendency of a federal class action, however, may actually increase the burden on that state's court system, because plaintiffs from across the country may elect to file a subsequent suit in that state solely to take advantage of the generous tolling rule. Unless all states simultaneously adopt the rule of cross-jurisdictional class action tolling, any state which independently does so will invite into its courts a disproportionate share of suits which the federal courts have refused to certify as class actions after the statute of limitations has run. Although plaintiffs assert that the majority of courts which have considered this issue have chosen to adopt cross-jurisdictional tolling to preserve claims under state law, our research indicates precisely the opposite. See Barela v. Showa Denko, K.K., 1996 WL 316544 (D.N.M. 1996) (concluding that class action brought in another jurisdiction does not toll New Mexico statute of limitations); Bell v. Showa Denko, K.K., 899 S.W.2d 749, 757 (Tex.Ct.App.1995) (holding that pendency of federal class action does not toll Texas statute of limitations); In re Agent Orange Product Liability Litigation, 818 F.2d 210, 213 (2d Cir.1987) (holding that Hawaii statute of limitations is not tolled by pendency of federal class action); but see Lee v. Grand Rapids Board of Education, 148 Mich.App. 364, 369-70, 384 N.W.2d 165, 168 (1986) (holding that Michigan state claims were preserved by prior federal suit). At any rate, it is apparent that very few states to date have even considered the issue of cross-jurisdictional tolling, let alone adopted it. Given this state of affairs, it is clear that adoption of...