Tigg v. Pirelli Tire Corp., M2003-02118-SC-R11-CV.

• Citation: 232 S.W.3d 28
• Decision Date: 16 August 2007
• Docket Number: No. M2003-02118-SC-R11-CV.,M2003-02118-SC-R11-CV.
• Parties: Anthony TIGG et al. v. PIRELLI TIRE CORPORATION et al.
• Court: Supreme Court of Tennessee

232 S.W.3d 28

Anthony TIGG et al. v. PIRELLI TIRE CORPORATION et al.

No. M2003-02118-SC-R11-CV.

Supreme Court of Tennessee, at Nashville.

June 6, 2007 Session.

August 16, 2007.

Richard L. Colbert, Nashville, Tennessee, for the appellant, Pirelli Tire Corporation.

George E. Barrett, Gerald E. Martin, David W. Garrison, and Edmund L. Carey, Jr., Nashville, Tennessee, for the appellants, United Steelworkers of America and United Rubber, Cork, Linoleum and Plastic Workers of America Local Union 670.

F. Dulin Kelly, Clinton L. Kelly, and Andy L. Allman, Hendersonville, Tennessee, for the appellees, Anthony Tigg, Levance Madden, Jr., Ronald Elliott, Vickie

Dillworth, Daphney Cecil, Hershel D. Brooks, Jr., Eugene O. Coffman, Jr., Donald Elliott, Eric Thompson, Karz Miller, and Terrence Bryson.

OPINION

WILLIAM M. BARKER, C. J., delivered the opinion of the court, in which JANICE M. HOLDER, CORNELIA A. CLARK, and GARY R. WADE, JJ. joined.

The eleven plaintiffs in this case were hired to replace union employees who were on strike against Pirelli Tire Corporation. Once the strike ended, Pirelli Tire Corporation terminated the plaintiffs' employment. Years later, the plaintiffs filed this lawsuit naming Pirelli Tire Corporation, United Steelworkers of America, and United Rubber, Cork, Linoleum and Plastic Workers of America ("URW") Local Union 670 as defendants. Upon the defendants' motion, the trial court dismissed the plaintiffs' complaint as untimely. The Court of Appeals reversed the dismissal as to two of the plaintiffs' claims. The defendants, Pirelli Tire Corporation, United Steelworkers of America, and URW Local Union 670, have appealed. We granted review to determine whether the previous timely commencement of a class action by other terminated replacement workers tolled the statutes of limitations applicable to the plaintiffs' lawsuit. We hold that the complaint filed by the previous plaintiffs, which purported to be a class action, did not operate to toll the statutes of limitations for the plaintiffs in this case after the time for seeking class certification expired. We reverse the judgment of the Court of Appeals and affirm the trial court's dismissal of the plaintiffs' complaint as untimely. Our ruling that the plaintiffs' action is barred by the statutes of limitations is dispositive of the case; therefore, we will not address the other issues presented by the parties.

This appeal is presented to the Court upon the defendants' motion to dismiss pursuant to Rule 12.02(6) of the Tennessee Rules of Civil Procedure.

A Rule 12.02(6) motion to dismiss only seeks to determine whether the pleadings state a claim upon which relief can be granted. Such a motion challenges the legal sufficiency of the complaint, not the strength of the plaintiff's proof, and, therefore, matters outside the pleadings should not be considered in deciding whether to grant the motion.

Trau-Med of Am., Inc. v. Allstate Ins. Co., 71 S.W.3d 691, 696 (Tenn.2002); Bell ex rel. Snyder v. Icard, Merrill, Cullis, Timm, Furen & Ginsburg, P.A., 986 S.W.2d 550, 554 (Tenn.1999). Accordingly, the underlying facts in this case are derived from the complaint.

In 1994, most of the employees at Pirelli Tire Corporation, a tire manufacturing company, were members of the United Steelworkers' Union and URW Local Union No. 670. On July 15, 1994, the union employees went on strike. The tire company then hired replacement workers, including the plaintiffs, to perform the striking employees' work. The replacement workers were promised permanent positions.

In the Fall of 1994, the bargaining between the unions and the tire company reached an impasse; the tire company declared the strike illegal and terminated the employment of the striking union members. Following further negotiations, the tire company entered into a new bargaining agreement with the unions, and the strike ended around March 27, 1995. The tire company then began to rehire the union employees and terminate the employment of the replacement workers; all of the replacement workers were terminated by September of 1995.

On October 2, 1995, three of the replacement workers filed a timely complaint in the Davidson County Circuit Court, naming the tire company and the unions as defendants. Against the tire company, the three replacement workers' complaint alleged claims of a breach of contract and retaliatory discharge; against the unions, the three replacement workers' complaint alleged a claim for the procurement of breach of an employment contract. Their complaint also included a request for certification as a class action pursuant to Rule 23 of the Tennessee Rules of Civil Procedure.

On October 25, 1995, the lawsuit of the three replacement workers was removed to federal court. The action remained pending before the United States District Court for the Middle District of Tennessee for six months until it was remanded back to Davidson County Circuit Court on April 29, 1996. On May 9, 2002, the three replacement workers settled their claims and voluntarily dismissed the complaint. During the pendency of the lawsuit, no motions seeking or opposing class certification were pursued. Consequently, the trial court never certified the case as a class action.

On August 16, 2002, the plaintiffs presently before the Court, who were also replacement workers, filed this class action lawsuit in the Davidson County Circuit Court. Against the tire company, the plaintiffs allege the grounds of breach of contract and wrongful discharge. Against the unions, the plaintiffs allege the ground of procurement of a breach of contract. The defendants responded to the complaint with a motion to dismiss based on both the applicable statutes of limitations and the equitable doctrine of laches.¹ The trial court dismissed the complaint, finding the claims untimely under the statutes of limitations and inequitable under the doctrine of laches. On appeal, however, the Court of Appeals applied a class action tolling rule to conclude that the limitations periods for the claim of breach of contract and the claim of procurement of a breach of contract were tolled during the pendency of the prior lawsuit involving identical claims by the three replacement workers. Under this reasoning, the Court of Appeals reversed the dismissal of the breach of contract and the procurement of a breach of contract claims.² Upon the defendants' appeal to this Court, both the plaintiffs and the defendants raise issues related to collateral estoppel, federal preemption under the Labor Management Relations Act and the National Labor Relations Act, intrajurisdictional tolling of limitations periods for pending class actions, and laches.

Standard of Review

This appeal originates from a motion to dismiss in which the defendants assert that the plaintiffs fail to state a claim upon which relief can be granted. See Tenn. R. Civ. P. 12.02(6). "In reviewing a motion to dismiss, the appellate court must construe the complaint liberally, presuming all factual allegations to be true and giving the plaintiff the benefit of all reasonable inferences." Trau-Med of Am., Inc. v. Allstate Ins. Co., 71 S.W.3d 691, 696 (Tenn.2002). Therefore, the factual allegations are taken as true, and our review is limited to the lower court's legal conclusions. These questions of law are reviewed de novo with no presumption that the lower court's conclusions are correct. White v. Revco Disc. Drug Ctrs., Inc., 33 S.W.3d 713, 718 (Tenn.2000).

Analysis

Although we are presented with several issues, the critical question in this case is whether the complaint filed in 1995 by the three replacement workers, which purported to be a class action, tolled the statutes of limitations governing the claims for prospective members of the class until the settlement in 2002. We hold that the 1995 complaint did not operate to toll the applicable statutes of limitations after the time for class certification expired. The plaintiffs' complaint is untimely, and the other issues are pretermitted.

Under the class action tolling rule applicable in federal court, "the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action." American Pipe & Constr. Co. v. Utah, 414 U.S. 538, 554, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974). The limitations period "remains tolled for all members of the putative class until class certification is denied." Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 354, 103 S.Ct. 2392, 76 L.Ed.2d 628 (1983). Therefore, in federal courts, when a court denies certification of a class, the members of the proposed class may file individual lawsuits or intervene in the pending action within the statutory limitations period, which begins to run again on the date that the court denies class action certification. The justification for tolling the limitations periods in these cases rests on what the United States Supreme Court has described as a principal function of class action lawsuits—the avoidance of repetitious filings of pleadings and motions by numerous class members. American Pipe, 414 U.S. at 551, 94 S.Ct. 756.

The theory upon which American Pipe relies is that the filing of a class action is a representative suit such that "the claimed members of the class [stand] as parties to the suit" until and unless they receive notice of the suit and choose not to continue. Id. at 551, 94 S.Ct. 756. Therefore, it is appropriate to toll the statutes of limitations not only for the named plaintiffs but also for those claimed members of the class who might subsequently participate in the suit. As the Court in American Pipe noted, a contrary rule would deprive class actions of the "efficiency and economy of litigation which is a principal purpose of the procedure." Id. at 553, 94 S.Ct. 756. "Potential class members would be induced to file...