Radmanovich v. Combined Insurance Co. of America

271 F. Supp. 2d 1075, 2003 U.S. Dist. LEXIS 12085, 2003 WL 21673451

Opinion

MEMORANDUM OPINION AND ORDER

ALESIA, District Judge.

On June 26, 2003, this court denied plaintiffs motion for class certification. Radmanovich v. Combined Ins. Co. of Am., 216 F.R.D. 424 (N.D.Ill.2003). Currently before the court is plaintiffs motion to serve notice under Rule 23(e) and (d)(2) and for stay of limitations. For the following reasons, the court grants in part and denies in part plaintiffs motion.

I. DISCUSSION

A. Background

Plaintiff Traci Radmanovich (“Radmano-vich”) originally brought this suit as a class action, claiming that defendant Combined Insurance Company of America (“Combined”) discriminated against her and the potential class members, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (“Title VII”). Particularly, she alleged that Combined discriminated against its female employees with regard to hiring, promotions, and commission opportunities and that the company created a work environment that was hostile towards women. Radmanovich filed a motion to certify the class that she sought to represent, and the court denied that motion on June 26, 2003.

Radmanovich has now filed a motion to serve notice under Rule 23(e) and (d)(2) and for stay of limitations. First, the court will address Radmanovich’s motion to serve notice. Second, the court will consider Radmanovich’s motion for stay of limitations.

B. Radmanovich’s Motion to Serve Notice

Radmanovich argues that notice should issue pursuant to both Rule 23(d)(2) and 23(e). First, the court will review Radma-novich’s argument regarding notice under Rule 23(e).

Under Rule 23(e), “notice of the proposed dismissal or compromise [of a class action] shall be given to all members of the class.” Fed. R. Civ. P. 23(e). The Seventh Circuit has held that Rule 23(e) applies both to classes that have been certified and to cases that have been filed as class actions, but not yet certified. Morency v. Evanston N.W. Healthcare Corp., No. 98 C 8436, 1999 WL 521155, at *3 (N.D.Ill. July 15, 1999) (citing Baker v. Am.’s M ortgage Serv’g, Inc., 58 F.3d 321, 324 (7th Cir.1995)) (additional citations omitted).

Radmanovich and Combined disagree regarding the application of the Seventh Circuit’s decision in Culver v. City of Milwaukee, 277 F.3d 908 (7th Cir.2002), to the instant case. In Culver, the Seventh Circuit held that notice under Rule 23(e) must issue where a class was initially certified by the district court but was later decerti-fied when the district court discovered that the class representative would, provide inadequate representation. Id. at 914. Radmanovich argues that the Seventh Circuit’s reasoning in Culver requires this court to grant her motion under Rule 23(e). Combined argues in response that Culver is distinguishable from the instant case and that notice should not issue.

In Culver, the Seventh Circuit initially stated that the purpose of Rule 23(e) is to “enable the class members to protect their interests in the face of the dismissal of the class action.” Id. The court then found that one of these interests is the need to protect one’s individual claims against the expiration of the statute of limitations. Id. Next, the Seventh Circuit noted that Rule 23(e) applies to both putative and certified class actions because the danger of prejudice to class members from dismissal of the class suit is the same in either case. Id. Further, the Seventh Circuit stated, “decertification has the same effect on the members of the class, so far as the running of the statute of limitations is concerned, as dismissal of the class action — it is tantamount to dismissal — and so it should be treated the same under Rule 23(e).” Id. at 915. The Seventh Circuit said that the district court’s finding that the class members were probably unaware of the class action and, therefore, would not be prejudiced was insufficient. Id. at 914. The court stated that Rule 23(e) applies when some class members may have been prejudiced by the dismissal or decertification of a class action. Id. (emphasis added). Thus, the Seventh Circuit’s reasoning in Culver is clear: when members of a class — whether putative or certified — may be relying upon the class action to present their individual claims and the class action disappears, those individuals are entitled to notice under Rule 23(e).

In this case, the court finds that some of the women who were potential class members were aware of the class action. Radmanovich’s counsel obtained declarations from over one hundred potential class members, in support of her motion for class certification. Additionally, more potential class members may have become aware of the case through the media. Because the possibility that many absent potential class members were aware of the putative class action, the court finds that they may have been relying upon the class action to assert their claims. Thus, the court concludes that Culver requires notice to issue under Rule 23(e). See id. at 915 (“The judge’s duty is to order notice unless the risk of prejudice to absent class members is nil.”).

Combined attempts to distinguish Cul-ver and cites in support of its argument Edwards v. Clendenon Henney & Hoy, No. 02-09271-CTK, 2003 WL 21254438 (S.D.Ind. Mar. 17, 2003). In Edwards, the Southern District of Indiana denied a plaintiffs motion — under Rule 23(e) — to send notice to the class after the court denied a motion for class certification. Id. at *2. In reaching its decision, the court distinguished Culver on its facts because Culver involved a class that was initially certified but later decertified. Id. In Edwards, the court stated that Culver “should be limited to situations in which the class members have received formal notice of the class action and may have relied on that notice.” Id. The Southern District of Indiana stated that the class members in Culver had received formal notice of the class action and distinguished the Seventh Circuit’s decision on that point. Id. Combined argues that this court should follow the reasoning of the Edwards court.

The court is not persuaded by Combined’s arguments. First, the court disagrees respectfully with the Edwards court’s reading of Culver. Although Cul-ver involved a case in which class certification had been granted, the Seventh Circuit’s reasoning expressly referred to both putative and certified class actions. Culver, 277 F.3d at 914. Although Edwards emphasized the formal notice received by the class members in Culver in distinguishing the Seventh Circuit case, the court finds no mention of formal notice of certification in the Culver decision. Instead, the Seventh Circuit simply relied upon the fact that some of the class members may have been aware of the suit and, therefore, may have been prejudiced without receiving notice of the decertification. Id. Second, the court questions whether formal notice issued in Culver, as the Edwards court assumed. In Culver, the Seventh Circuit noted that the district court thought that the class members “probably were unaware of the suit and therefore would not be prejudiced by its demise.” Id. Consequently, the court questions whether formal notice of class certification did, in fact, issue in Culver. The absence of such formal notice would seriously undermine the reasoning of the Edwards court. Therefore, the court does not find Combined’s arguments persuasive. 1

The court grants Radmanovich’s motion for notice pursuant to Rule 23(e). Because the court has determined that notice is appropriate under Rule 23(e), it need not consider the parties’ arguments under Rule 23(d)(2) and denies as moot Radma-novich’s motion under Rule 23(d)(2). The court orders Radmanovich’s counsel to submit a draft Rule 23(e) notice for the court’s approval by Tuesday July 29, 2003. See id. (“The judge’s duty ... is to review for adequacy the form of notice proposed by class counsel in response to the order.”).

C.. Radmanovich’s Motion for Stay of Limitations

Radmanovich argues that the statute of limitations should be tolled, in order to allow women who would have been members of the class to file individual claims. She contends that the statute of limitations should be tolled for one year, under the Illinois Savings Statute, 735 ILL. COMP. STAT. 5/13-202. Additionally, Radmano- vich argues that the court should equitably toll the limitations period and order a grace period for the filing of individual suits.

In Illinois, a Title VII plaintiff must file a charge with the EEOC within 300 days of the alleged discrimination. Bilow v. Much Shelist Freed Denenberg Ament & Rubenstein, P.C., 277 F.3d 882, 892 (7th Cir.2001). See also 42 U.S.C. § 2000e-5(e)(l). The plaintiff then has ninety days after receiving her “right to sue” letter to file a lawsuit. 42 U.S.C. § 2000e — 5(f)(1). As a general rule, the statute of limitations is tolled for class members until the court determines that the ease cannot proceed as a class action. Elmore v. Henderson, 227 F.3d 1009, 1012 (7th Cir.2000) (citations omitted). Generally, tolling ends as soon as the district court refuses to certify the class action. Hemenway v. Peabody Coal Co., 159 F.3d 255, 265 (7th Cir.1998) (citing American Pipe & Const. Co. v. Utah, 414 U.S. 538, 561, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974)).

Radmanovich argues that this court should borrow the Illinois Savings Statute and toll the limitations period for individual plaintiffs for one year. Federal courts borrow state savings statutes only when the federal cause of action is based upon a state statute of limitations. Beck v. Caterpillar Inc., 50 F.3d 405, 406 (7th Cir.1995). However, the limitations period for Title VII actions is governed by 42 U.S.C. § 2000e-5. Therefore, because the Title VII statute of limitations is based upon federal law, the Illinois Savings Statute does not apply to this case.

In support of her argument that the court should toll the limitations period based upon the Illinois Savings Statute, Radmanovich cites two cases, Chardon v. Fumero Soto, 462 U.S. 650, 652-54, 103 S.Ct. 2611, 77 L.Ed.2d 74 (1983), and American Pipe, 414 U.S. at 553-54, 94 S.Ct. 756. The court will discuss the applicability of each of’these cases in turn. First, Chardon involved a case brought under 42 U.S.C. § 1983, and the limitations period for those cases is derived from the state statute of limitations. See Ashafa v. City of Chicago, 146 F.3d 459, 461 (7th Cir.1998) (citing Wilson v. Garcia, 471 U.S. 261, 276, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985)). Therefore, Chardon is inapplicable to the instant case. Second, American Pipe involved an antitrust case and discussed intervention by a plaintiff who was a potential class member. The case is unpersuasive for two reasons. The Clayton Act includes specific language that tolls the statute of limitations for actions under the act. Furthermore, the court’s holding extended only to intervention of individual plaintiffs and did not discuss the limitations period for individual plaintiffs to file their own lawsuits. Accordingly, the court finds that Radmanovich’s reliance upon these two cases is misplaced.

Radmanovich correctly points out that the Title VII statute of limitations can be subject to tolling. In fact, she concedes that the statute of limitations, for individual claims, resumes running upon the denial of class certification. (Pl.’s Reply, at 6.) Additionally, Radmanovich acknowledges that it will be difficult to determine the appropriate limitations period for the absent class members. (Pl.’s Reply, at 7.) In the court’s June 26, 2003 memorandum opinion, the court noted the diversity between each absent individual’s claims. Radmanovich, 216 F.R.D. 424, at 435-37. Therefore, whether a particular individual is entitled to a tolling of the statute of limitations should be made on a case-by-case basis if and when she files her own lawsuit.

Therefore, the court denies Radmano-vich’s motion for stay of limitations.

II. CONCLUSION

For the foregoing reasons, the court grants in part and denies in part Radma-novich’s motion to issue notice under Rule 23(e) and (d)(2) and for stay of limitations as follows: (1) the court grants Radmano-vich’s motion to serve notice under Rule 23(e); (2) the court denies as moot Radma-novich’s motion to serve notice under Rule 23(d)(2); and (3) denies Radmanovich’s motion for stay of limitations. The court orders Radmanovich’s counsel to submit a draft Rule 23(e) notice by Tuesday July 29, 2003, for the court’s approval.

1 . Combined also argues that Radmanovich's motion is an attempt by her counsel to obtain court sanction to solicit individual claims. The court acknowledges this potential problem but agrees with Radmanovich that any such problem will be eliminated by court review of the notice.