Basch v. Ground Round, Inc.

• Court: Court of Appeals for the First Circuit
• Decided: March 17, 1998
• Docket: 97-1550
• Status: Published

Opinion

USCA1 Opinion

                  United States Court of Appeals

                        For the First Circuit

    

                         ____________________

    

    No. 97-1550

    

    ALAN BASCH, ROBERT EISENBERG, SUSAN WINSPEAR, PETER COUTU,

  THOMAS HOWELL, WILLIAM JORGENSEN, DIANA KURTZ, SCOTT SEENEY,

      SHANO EZZELL, ANDREW CHAPMAN AND WILLIAM CONNELLY,

                                

                    Plaintiffs, Appellants,

                                

                               v.

                                

                    THE GROUND ROUND, INC.,

                                

                      Defendant, Appellee.

                      ____________________

                                

         APPEAL FROM THE UNITED STATES DISTRICT COURT 

                                

               FOR THE DISTRICT OF MASSACHUSETTS

                                

         [Hon. Richard G. Stearns, U.S. District Judge]

                                  

                         ____________________

    

                                Before

                                   

                      Boudin, Circuit Judge,

                                

                 Aldrich, Senior Circuit Judge,

                                

                   and Lynch, Circuit Judge.

                                

                      ___________________

                                

                                        Jonathon J. Margolis, with whom Sara Fleschner and

    Kushner & Sanders were on brief, for appellants.

        Edward P. Leibensperger, with whom Christa Von Der Luftand Nutter, McClennen & Fish were on brief, for appellee. 

                       ____________________

                                  

                          March 17, 1998

                      ____________________

                                  

        LYNCH, Circuit Judge.  This case involves the

    intersection of the ADEA statute of limitations and the special

    tolling rules which may apply when the plaintiffs are within a

    class alleged but not certified in earlier ADEA actions.  The

    plaintiffs are eleven people, all over 40 years old, who lost

    their management level jobs at The Ground Round.  In all,

    members of this group, represented by the same counsel, have

    filed four different actions accusing Ground Round of age

    discrimination.  If this, the fourth action, is untimely, then

    the district court correctly entered summary judgment.  

        This action is untimely if the plaintiffs' otherwise

    concededly untimely claims are not saved by the fact that there

    were two prior lawsuits with class action allegations, and

    plaintiffs were within the classes alleged.  We hold that this

    stacking of two class actions does not save the plaintiffs'

    claims.  We affirm.

                                I.

                                      This is the fourth lawsuit by former Ground Round

    employees alleging class-wide age discrimination by Ground

  Round.  Each action described the same set of events   and

    asserted essentially the same class.  The first such action,

    Dionne v. Ground Round, was filed in Massachusetts state court

    and removed by Ground Round to federal court based on

    plaintiffs' ADEA claims.  The Dionne plaintiffs sought class

    certification, which the district court denied on July 6, 1994. 

    The Dionne plaintiffs then voluntarily dismissed their ADEA

    claims and successfully moved to remand the case to state

    court.

        The second action, Halligan v. Ground Round, was filed in

    federal district court on November 22, 1993.  As of the time

    the complaint in this case was filed, the Halligan plaintiffs

  still had not moved for class certification.    On December 21,

    1995, after the complaint in this case was filed, the Halliganplaintiffs voluntarily dismissed their ADEA claims and the

    action was dismissed.

        After the district court denied class certification in

    Dionne, but before remand to state court, several members of

    the putative class sought to intervene in that action.  The

    district court denied their motion, at which point the would-be

    intervenors filed the third related lawsuit, Winspear v. Ground

    Round, in state court alleging only state-law causes of action. 

    Seven of the plaintiffs in the Winspear action are plaintiffs

    here.  The Massachusetts Superior Court granted Ground Round's

    motion for summary judgment in Winspear without reaching the

  merits.  

       Plaintiffs here filed this action against Ground Round on

    October 6, 1995, alleging that Ground Round instituted a

    company-wide policy of dismissing older management workers and

    replacing them with younger workers, in violation of the ADEA. 

    Plaintiffs claimed to represent a class of similarly situated

  former Ground Round employees.   

        The plaintiffs here claim to represent the class of "all

    past, present and future managerial employees of Ground Round,

    who have been or may be terminated from their employment on the

    basis of age," not including those who left Ground Round's

    employ before January 1, 1990.  The Dionne, Halligan, and

    Winspear complaints defined the putative class in a nearly

    identical manner.

        Ground Round moved for summary judgment on several

    grounds.  First, relying on the Massachusetts Superior Court's

    dismissal of the Winspear action to which seven of the present

    plaintiffs were parties, Ground Round argued that the claims of

  those seven plaintiffs   were barred by the doctrine of res

    judicata.  The district court rejected this argument based on

    its conclusion that the Winspear action was dismissed for

    procedural reasons, and not on its merits.  

        Defendant's second argument for summary judgment was that

  the claims of seven plaintiffs   were barred because those

    plaintiffs failed to file administrative charges with the EEOC

    within 300 days of their discharge from employment, as required

  by the ADEA.    The seven plaintiffs admit that they did not

    file administrative charges within the requisite time period,

    but argue that their claims are nevertheless saved by the

    "single-filing rule" adopted by the majority of circuits, but

    not yet addressed by this circuit.  That rule, also referred to

    as "piggybacking," permits plaintiffs who have failed to file

    administrative charges, or who have filed untimely charges, to

    "piggyback" on the timely-filed charges of other plaintiffs,

    provided the timely-filed charge gives the EEOC and the

    employer adequate notice of allegations of class-wide

    discrimination.  See Grayson v. K Mart Corp., 79 F.3d 1086,

    1101-02 (11th Cir. 1996); Howlett v. Holiday Inns, Inc., 49

    F.3d 189, 194 (6th Cir. 1995); Anson v. University of Tex.

    Health Science Ctr., 962 F.2d 539, 541-42 (5th Cir. 1992);

    Tolliver v. Xerox Corp., 918 F.2d 1052, 1057-59 (2nd Cir.

    1990); Kloos v. Carter-Day Co., 799 F.2d 397, 400-401 (8th Cir.

  1986).   

        Defendant also argued that even if the single-filing rule

    were adopted, plaintiffs' claims would still be barred because

    the timely-filed administrative charges on which plaintiffs

  rely provided inadequate notice of class-wide allegations.   

    See Kloos, 799 F.2d at 400 ("To be faithful to the purposes of

    the filing requirement, an administrative charge must allege

    class-wide age discrimination or claim to represent a class in

    order to serve as the basis for an ADEA class action . . . ."). 

    The district court found that this circuit would adopt the

    majority rule, but accepted defendant's argument that the

    single-filing rule offered plaintiffs no refuge here because

    the underlying charges contained no allegations of class-wide

    discrimination.

        Defendant's final argument for summary judgment was that

    the claims of all of the plaintiffs were time-barred for

    failure to file their complaint within 90 days of receiving

    notice from the EEOC of termination of its proceedings, as

  required by the ADEA.    The EEOC proceedings on plaintiffs'

    charges terminated at various dates between July 21, 1993, and

    January 4, 1995.  This action was filed on October 6, 1995,

    long after the 90-day period had expired for all plaintiffs.  

        Plaintiffs concede they all missed the 90-day deadline

    for filing their complaint, but seek shelter in the statute of

    limitations tolling rule announced in American Pipe & Const.

    Co. v. Utah, 414 U.S. 538 (1974), and reiterated in Crown, Cork

    & Seal Co. v. Parker, 462 U.S. 345 (1983).  Those cases held

    that "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, 414

    U.S. at 554.  Plaintiffs argue that the filing of the

    Dionne and Halligan actions suspended the running of the

    statute of limitations for plaintiffs, who would have been

    members of the Dionne and Halligan classes had class

    certification been granted in those cases.  The district court

    accepted the application of the American Pipe tolling rule, but

    rejected plaintiffs' argument that the rule saved their claims

    in this case.

        Assuming arguendo that the American Pipe and Crown, Corktolling rules apply to ADEA actions, we nevertheless find that

    plaintiffs' claims are time-barred.  We do not reach the merits

    of the res judicata or single-filing rule arguments.

                               II.

                                        In American Pipe the Supreme Court balanced the policies

    served by the class action rule, Fed. R. Civ. P. 23, and the

    policies served by the statute of limitations.  The case arose

    under the Sherman Antitrust Act, and was brought as a putative

    class action.  After the district court denied class

    certification, several would-be class members moved to

    intervene.  Although the applicable statute of limitations had

    run as to the intervenors, the Supreme Court held that their

    claims were not time-barred because the filing of the putative

    class action tolled the statute of limitations as to all

    alleged class members until the district court denied

    certification, "at least where class action status has been

    denied solely because of failure to demonstrate that the class

    is so numerous that joinder of all members is impracticable." 

    Id. at 552-53 (internal quotation marks omitted).

        In Crown, Cork, a Title VII case, the Court reaffirmed

    the American Pipe tolling rule and extended it to apply not

    only to plaintiffs who seek to intervene in the pending action,

    but also to would-be class members who file actions of their

    own.  See id. at 349-50.  The Court also did not limit its

    holding to instances when the class certification was denied

    solely on numerosity grounds.

        A logical initial question is whether the Crown, Corkrule for Title VII cases also applies to ADEA cases.  Defendant

    argues that these tolling rules do not apply to ADEA

    plaintiffs.  This argument is grounded in the fact that both

    American Pipe (a Sherman Act case) and Crown, Cork (a Title VII

    case) arose in the context of class actions brought under Fed.

    R. Civ. P. 23.  Rule 23 provides that all members of a class

    are included in the action and are bound by the judgment unless

    they "opt out" of the action by affirmatively requesting

    exclusion.  The ADEA, in contrast, adopts the enforcement

    procedures of the Fair Labor Standards Act, see 29 U.S.C. 

    201-219, which provides for an "opt in" procedure for class

    actions, requiring individuals to affirmatively file consent to

    the action in order to be a member of the class.  See 29 U.S.C.

     216(b), 626(b).  Defendant contends that the difference

    between these two procedures results from different policy

    considerations, and that the rationale behind the American Pipeand Crown, Cork tolling rules does not apply in the context of

    "opt in" class actions.  

        The courts of appeals that have addressed this issue have

    split on the outcome.  Compare Sperling v. Hoffman-La Roche,

    Inc., 24 F.3d 463, 471-72 (3rd Cir. 1994) (opt-in plaintiff may

    join ADEA action after limitations period for that individual

    plaintiff has run if the representative plaintiffs' actions are

    timely) with Grayson, 79 F.3d at 1106 (opt-in ADEA plaintiffs

    must meet the statute of limitations and may not rely on filing

    of class action complaint) and O'Connell v. Champion Int'l

    Corp., 812 F.2d 393, 394 (8th Cir. 1987) (same).  We consider

    this an issue of some complexity, and we do not reach or

    resolve it here.  Even assuming that the American Pipe and

    Crown, Cork tolling rules do apply to ADEA actions, we find

    that the rules do not save plaintiffs' claims.  This is because

    plaintiffs' claims depend on the "stacking" of two sequential

    class actions to keep their claims from being untimely.  We do

    not believe the tolling rules were meant to permit the stacking

    of class actions.

        In Crown, Cork, the Court stated that "[o]nce the statute

    of limitations has been tolled, it remains tolled for all

    members of the putative class until class certification is

    denied," at which point "class members may choose to file their

    own suits or to intervene as plaintiffs in the pending action." 

    462 U.S. at 354.  In this case, the first class action relevant

    is the Dionne action.  The Dionne action was filed as a

    putative class action on April 20, 1993, and the district court

    denied class certification on July 6, 1994.  Plaintiffs here

    were within the class sought in Dionne.  Applying American Pipeand Crown, Cork would toll the running of the 90-day

    limitations period for each plaintiff from April 20, 1993,

    until July 6, 1994.  At that point, each plaintiff would have

    had at most 90 days to move to intervene in that action or to

    file an individual action.  But plaintiffs did not do that. 

    The complaint in this action was filed on October 6, 1995, more

    than 90 days after the denial of class certification in Dionne.

        Plaintiffs argue that they are saved by the filing of the

    Halligan putative class action.  Halligan was filed in November

    of 1993, after Dionne was filed but before the court had denied

    class certification in Dionne.  Halligan remained pending as an

    asserted but not certified class action, plaintiffs not yet

    having moved for class certification, on the day the instant

    action was filed.  Plaintiffs claim that because "at all

    relevant times there was at least one class-action suit pending

    against Ground Round, and each of the plaintiffs was a member

    of the defined classes in those cases[, t]hose actions tolled

    the statute of limitations."  We disagree.

        The Halligan complaint alleged the same class and the

    same claims as did the Dionne complaint.  In fact, the named

    plaintiff, David Halligan, was active in the effort to attain

    class certification in the Dionne action.  Halligan submitted

    an affidavit in support of the Dionne motion to certify a

    class, in which he alleged age discrimination by Ground Round. 

      The policies -- respect for Rule 23 and considerations of

    judicial economy -- which animated the Crown, Cork and American

    Pipe tolling rules dictate that the tolling rules, if adopted

    at all in ADEA cases, not permit plaintiffs to stretch out

    limitations periods by bringing successive class actions.

        Plaintiffs may not stack one class action on top of

    another and continue to toll the statute of limitations

    indefinitely.  Permitting such tactics would allow lawyers to

    file successive putative class actions with the hope of

    attracting more potential plaintiffs and perpetually tolling

    the statute of limitations as to all such potential litigants,

    regardless of how many times a court declines to certify the

    class.  This simply cannot be what the American Pipe rule was

    intended to allow, and we decline to embrace such an extension

    of that rule.  At least one of our sister circuits agrees.  SeeSalazar-Calderon v. Presidio Valley Farmers Ass'n, 765 F.2d

    1334, 1351 (5th Cir. 1985) ("Plaintiffs have no authority for

    their contention that putative class members may piggyback one

    class action onto another and thus toll the statute of

    limitations indefinitely, nor have we found any.").  On closely

    related issues, each court of appeals to address the question

    has reasoned similarly and rejected efforts by late plaintiffs

    to resuscitate their claims through stacking of subsequent

    class actions.  See Andrews v. Orr, 851 F.2d 146, 149 (6th Cir.

    1988) (class action tolls statute of limitations only for

    subsequent individual actions, not for subsequent class action

    alleging similar class and similar claims); Robbin v. Fluor

    Corp., 835 F.2d 213, 214 (9th Cir. 1987) (same); Korwek v.

    Hunt, 827 F.2d 874, 879 (2d Cir. 1987) (same).  

        The dangers which Justice Blackmun warned against in his

    concurring opinion in American Pipe are vividly demonstrated by

    plaintiffs' theory.  Justice Blackmun wrote separately to

    stress that the Court's decision "must not be regarded as

    encouragement to lawyers in a case of this kind to frame their

    pleadings as a class action, intentionally, to attract and save

    members of the purported class who have slept on their rights."

    414 U.S. at 561 (Blackmun, J. concurring).  This point was

    emphasized by Justice O'Connor in her Crown, Cork concurrence,

    in which she stated that "[t]he tolling rule of American Pipeis a generous one, inviting abuse."  462 U.S. at 354 (O'Connor,

    J., concurring).  Rational policy considerations led the

    Congress to impose a statute of limitations on the bringing of

    ADEA actions.  After class certification has been denied in an

    action, potential individual plaintiffs cannot extend that

    limitations period by relying on successive class actions which

    allege the same class and the same claims.  Plaintiffs' claims

    are therefore time-barred, and the district court properly

    entered summary judgment in Ground Round's favor.

        Affirmed.  Costs to defendant.