Sharon Potter v. Comm'r of Soc. Sec. ( 2021 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 21a0183p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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SHARON POTTER (20-5550); BRANDI JANE ADAMS
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(20-5551); JOHNNY MESSER (20-5552),
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Plaintiffs-Appellants, > Nos. 20-5550/5551/5552
│
│
v. │
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COMMISSIONER OF SOCIAL SECURITY, │
Defendant-Appellee. │
┘
Appeals from the United States District Court for the Eastern District of Kentucky at Pikeville;
Nos. 7:19-cv-00072 (Potter) and 7:19-cv-00093 (Messer)—Danny C. Reeves, District Judge;
No. 7:17-cv-00085 (Adams)—Gregory F. Van Tatenhove, District Judge.
Argued: January 28, 2021
Decided and Filed: August 16, 2021
Before: COOK, GRIFFIN, and LARSEN, Circuit Judges.
_________________
COUNSEL
ARGUED: Emma Simson, WILMER CUTLER PICKERING HALE AND DORR LLP,
Washington, D.C., for Appellants. Jaynie Lilley, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Emma Simson, Daniel S. Volchok,
Arpit K. Garg, WILMER CUTLER PICKERING HALE AND DORR LLP, Washington, D.C.,
Evan B. Smith, APPALRED LEGAL AID, Prestonsburg, Kentucky, Richard Frank Dawahare,
Lexington, Kentucky, for Appellants. Jaynie Lilley, Charles Scarborough, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 2
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OPINION
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GRIFFIN, Circuit Judge.
Class actions encourage absent members to rely on representatives to vindicate their
rights. If, however, the court decides that a lawsuit should not proceed as a class action (or at
all), class members are on their own. Consistent with the representative nature of class litigation,
the Supreme Court has established American Pipe tolling, an equitable doctrine under which
filing a class action pauses the deadlines for members to file related individual actions. See
American Pipe & Const. Co. v. Utah, 414 U.S. 538, 554 (1974). The reason for this doctrine is
simple: Once a class action is filed, putative class members pursue their rights through that
vehicle and defendants know of the claims against them, so there is no need to clutter the courts
with repetitive actions.
Traditionally, American Pipe tolling continues until the district court decides that the
lawsuit should not proceed as a class action and denies class certification on the merits. These
consolidated cases (Potter, Adams, and Messer) present two significant questions about what else
ends American Pipe tolling. First, we must decide whether tolling continues after a district court
denies a motion for class certification solely as a matter of docket management, without deciding
that certification is unwarranted. If it does, we must then decide whether American Pipe
continues to toll statutes of limitations during the appeal of a dismissed, uncertified class action.
For the reasons below, we hold that the administrative denial at issue here did not
terminate tolling. We also hold that the outright dismissal of an uncertified class action ends
American Pipe tolling and restarts class members’ statute-of-limitations clocks. Applying our
first holding, we reverse the district court’s dismissals of Potter and Adams and remand for
proceedings consistent with this opinion. Applying our second, we affirm the district court’s
dismissal of Messer.
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 3
I.
A.
Attorney Eric Conn successfully represented plaintiffs Sharon Potter, Brandi Jane
Adams, and Johnny Messer (and thousands of other claimants) in seeking disability benefits
from the Social Security Administration (“SSA”). But it turned out that Conn was a fraudster; he
bribed doctors to certify false disability applications and bribed an administrative law judge to
approve those applications. See Hicks v. Comm’r of Soc. Sec., 909 F.3d 786, 793 (6th Cir. 2018).
All told, Conn caused the SSA to pay out millions in fraudulent benefits and fees.
After Conn’s scheme came to light, the SSA identified more than 1,700 approved
applications that it believed might have been the product of his fraud. Id. at 794. The SSA
began redetermining whether Conn’s clients were eligible for benefits. Id. Many applicants took
issue with how the SSA redetermined eligibility, however, and litigation ensued.
The SSA redetermined and denied plaintiffs’ applications, but by then several class
actions had been filed to challenge the SSA’s redetermination procedures. For our purposes, two
are important.1
The first is Martin v. Commissioner of Social Security, No. 7:15-cv-00046 (E.D. Ky.
2015). That case was filed on May 30, 2015 and dismissed several months later—without a class
having been certified—because the named plaintiffs failed to exhaust their administrative
remedies. The Martin plaintiffs appealed, but after both properly exhausted and filed separate
individual actions, we vacated the judgment on January 16, 2018, and remanded to the district
court with instructions to dismiss the case. Martin v. Colvin, No. 16-5527, 2018 U.S. App.
LEXIS 1019, at *2 (6th Cir. Jan. 16, 2018) (order).
The second important class action is Hughes v. Commissioner of Social Security,
No. 5:16-cv-00352 (E.D. Ky. 2016), which was assigned to then-District Judge Thapar. Hughes
began as an individual lawsuit challenging the SSA’s redetermination procedures, but became a
1
The parties discuss other related class actions but, because of their similarities and overlapping dates,
discussion of those cases is unnecessary.
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 4
class action on November 2, 2016, when the complaint was amended to include putative class
claims. The named plaintiffs then moved to certify a class. While their motion was pending, the
SSA moved to stay the case because Hicks was already pending in the Sixth Circuit and would
likely control the merits. See Hughes v. Berryhill, No. CV-16-352-ART, 2017 WL 3000035, at
*2 (E.D. Ky. Feb. 21, 2017). Judge Thapar granted the SSA’s motion for a stay. Id. He
expressed no view on the suitability of the claims for class treatment. But he did deny the
pending motion for class certification “without prejudice” to clear his docket, adding that “[o]nce
the Sixth Circuit rules on the legal issues, the plaintiffs may file any motions they deem
necessary.” Id.Almost two years later, we held in Hicks that the SSA’s redetermination procedures
violated due process and the Administrative Procedure Act. Hicks, 909 F.3d at 813. Following
our decision, the district court remanded the Hughes plaintiffs’ claims to the SSA on August 13,
2019.
B.
The plaintiffs in these cases received denials from the SSA at different times relative to
Martin and Hughes. The SSA denied Messer’s application in July 2016. At that time, the
Martin appeal was pending and Hughes had not been filed as a class action. The SSA denied
Potter and Adams’s applications in late 2017, while Hughes was stayed.
Under the relevant statute, plaintiffs had sixty days to seek judicial review of the SSA’s
decision to deny benefits. See 42 U.S.C. § 405(g). They each waited more than two years.
There was, however, a reason for their delay: As absent Hughes class members, they believed
that American Pipe tolled their statute of limitations while that case remained stayed before the
district court. Once the district court remanded Hughes, plaintiffs filed their civil actions within
the time provided for in the statute. Potter and Adams alleged that their actions were timely
under American Pipe because of Hughes, while Messer alleged that a combination of the Martin
appeal and Hughes made his action timely.
The district courts rejected each plaintiff’s invocation of American Pipe, holding that the
actions were filed out-of-time because Judge Thapar’s February 2017 administrative denial of
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 5
the Hughes motion ended American Pipe tolling and restarted the statute-of-limitations clock.
The Messer court further concluded that, even if class actions can be “stacked” for tolling
purposes,2 he could not rely on the Martin appeal. The district courts dismissed each case as
untimely, plaintiffs appealed, and we consolidated their appeals for review.
II.
Plaintiffs argue that the district courts erroneously applied American Pipe tolling.
We review de novo a district court’s determination that a complaint was filed outside the
statute-of-limitations period. Cook v. Comm’r of Soc. Sec., 480 F.3d 432, 435 (6th Cir. 2007).
Distilled down, the issues in these cases are a series of “if-then” propositions. If the
Hughes administrative denial ended American Pipe tolling, then no case is timely. If it did not,
then Potter and Adams filed their actions within the statute of limitations. If the denial did not
end American Pipe tolling and the Martin appeal also paused the time to file, then Messer’s suit
is timely. But if the Martin appeal had no tolling effect, then Messer’s suit is untimely.
Put differently, we confront two questions: (1) does American Pipe tolling continue after
a district court denies a motion to certify a class solely as a matter of docket management—
without deciding that certification is unwarranted; and, if so, (2) does American Pipe tolling
continue during the appeal of a dismissed, uncertified class action?
III.
To answer these questions, we first review existing case law, starting with basic
principles of American Pipe tolling. In American Pipe, the Supreme Court 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.” 414 U.S. at 554. The limitations period “remains tolled for all members of the
2
The district court gave Messer “the benefit of the doubt” regarding his ability to “stack tolling periods.”
Messer v. Comm’r of Soc. Sec., No. CV-7:19-093-DCR, 2020 WL 1860695, at *7 n.4 (E.D. Ky. Apr. 13, 2020). On
appeal, the SSA likewise “assume[s] . . . that Messer can rely on a chain of successive class actions.” Accordingly,
we do not consider this question further.
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 6
putative class until class certification is denied.” Crown, Cork & Seal Co. v. Parker, 462 U.S.
345, 354 (1983).
But how does American Pipe apply to the cases currently before us? The parties each
point to one of our prior decisions and argue that binding precedent dictates the doctrine’s
application and the outcome of these cases. We disagree.
The SSA argues that our decision in Andrews v. Orr, 851 F.2d 146 (6th Cir. 1988), cuts
off tolling at the Hughes denial, dooming all three cases. The Andrews plaintiffs argued that
American Pipe tolling continued after a class certification denial because the named plaintiffs
had expressed an intent to file a second motion for certification and later did file such a motion.
Id. at 150. We rejected this argument, concluding that, “[e]ven if the [class-action] plaintiff’s
second motion for class certification somehow revived or reactivated tolling, it came too late,”
because “[m]ore than thirty days”—the statute-of-limitations period in that case—“had gone by
in which neither a class action nor a motion for class certification was pending.” Id. We also
found “nothing in American Pipe or Crown, Cork & Seal to indicate that mere notice by the
[class-action] plaintiff of her intent to file a second motion for class certification began a new
tolling period.” Id. Instead, we reasoned that
[i]t is the filing of a class action and the pendency of a motion to certify that
suspend the running of a limitations period for putative class members, and the
period for filing begins to run anew when class certification is denied. Nothing
less will suffice to maintain the period of suspension.
Id. In the SSA’s view, the Hughes denial stripped that action of its class character and, because
there was no other motion for certification pending, the statute of limitations began to run. If
that is true, the limitations period expired in May 2017, years before any plaintiff filed their
action.
Andrews bears little resemblance to these cases, however. There, the court presiding over
the predicate class action denied the first motion to certify on the merits, finding that the
proposed class lacked commonality and that the class representative’s claims were not typical of
the proposed class. Id. at 148; see Brown v. Orr, 99 F.R.D. 524, 527 (S.D. Ohio 1983). And
because more than thirty days passed before the action might have regained its class character
with the filing of the second certification motion, American Pipe did not provide a long enough
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 7
tolling peiord.3 Thus, this portion of Andrews was very much a run-of-the-mill American Pipe
case.
In contrast, the predicate class action here (Hughes) involved a denial that did not address
the merits of class certification. The reasonableness of the absent class members’ reliance
interests is therefore much less clear. And to the extent that Andrews’s nothing-less-will-suffice
language could be read to require a pending class-certification motion to preserve tolling, such a
reading is belied by American Pipe itself, where plaintiffs never moved for certification. See
American Pipe, 414 U.S. at 542–43 (class status denied because of defendants’ motion for “an
order . . . that the suit could not be maintained as a class action”). This language merely left
open the possibility that the class-action plaintiff’s second motion to certify could “somehow
revive[] or reactivate[] tolling,” if it came within the statute-of-limitations period. Andrews,
851 F.2d at 149. Because Andrews is distinguishable, it does not dictate the outcome of these
cases.
The case relied on by plaintiffs to support reversal in all three actions, In re Vertrue Inc.
Marketing & Sales Practices Litigation, 719 F.3d 474 (6th Cir. 2013), presents a much closer
question. But it too is inapplicable. To fully understand why, a review of its rather complicated
procedural history is necessary.
The predicate class action that provided the basis for American Pipe tolling in Vertrue
was Sanford v. Memberworks, Inc., which was filed in the Southern District of California.
Vertrue, 719 F.3d at 477. After the Sanford district court compelled the named plaintiff to
arbitration, it denied a motion for class certification as moot. Sanford v. Memberworks, Inc., No.
02-CV-601H, 2003 WL 27382208, at *1 (S.D. Cal. June 13, 2003). Later, however, the Ninth
Circuit reversed the district court’s arbitration order and revived the class claims. See Sanford v.
Memberworks, Inc., 483 F.3d 956, 964 (9th Cir. 2007). And, on remand, the district court
dismissed the case on the merits without ever addressing class certification. Sanford, 2008 WL
4482159, at *6 (S.D. Cal. Sept. 30, 2008). Thus, no court ever decided the merits of class
certification.
3
We applied traditional equitable tolling principles to find that the plaintiffs’ individual claims were timely.
See Andrews, 851 F.2d at 150–52.
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 8
Shortly after Sanford was dismissed for the final time, the Vertrue plaintiffs filed their
class complaint. Vertrue, 719 F.3d at 477. Defendants moved to dismiss the suit as untimely,
arguing that “any applicable tolling doctrine may not be applied to allow th[e] matter to proceed
as a class action.” In re Vertrue Mktg. & Sales Pracs. Litig., 712 F. Supp. 2d 703, 711 (N.D.
Ohio 2010). In response, plaintiffs argued that American Pipe tolling had paused their time to
file a class action during the pendency of Sanford. Id. The district court agreed with plaintiffs
and held that they could continue as a class action and avail themselves of American Pipe tolling
because no previous court had made a “‘definitive’ determination regarding the propriety of
class certification.” Id. at 713.
The Vertrue defendants appealed to this court, arguing that the district court’s decision
ran afoul of our opinion in Andrews. In relevant part, the Andrews court affirmed the district
court’s conclusion that American Pipe tolling could not apply to save a second action’s class
claims. It noted that “[t]he courts of appeals that have dealt with the issue appear to be in
unanimous agreement that the pendency of a previously filed class action does not toll the
limitations period for additional class actions by putative members of the original asserted
class.” Id. at 149 (collecting cases).
Back in Vertrue, we rejected the defendants’ argument regarding Andrews:
Vertrue argues that Andrews stands for the bright line rule that American Pipe
tolling never applies to subsequent class actions by putative class members and
that, therefore, the plaintiffs here are time-barred from seeking to pursue a
subsequent class action. However, we dealt in Andrews with a situation in which
class certification had already been denied. Here, no court has definitively ruled
on class certification, as the district court dismissed the plaintiffs’ actions in
Sanford before ruling on the plaintiffs’ motion for class certification. Sanford,
2008 WL 4482159, at *6. Because the risk motivating our decision in Andrews—
namely, repetitive and indefinite class action lawsuits addressing the same
claims—is simply not present here, we hold that the commencement of the
original Sanford class action tolled the statute of limitations under American Pipe.
The parties agree that if American Pipe tolling is allowed in this case, the
plaintiffs’ federal claims were timely filed. Because no court ever denied the
motion for class certification in the Sanford action, we affirm the district court’s
conclusion that the plaintiffs’ federal claims were timely filed.
Vertrue, 719 F.3d at 479–80 (footnotes omitted).
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 9
Plaintiffs focus on Vertrue’s use of the word “definitively,” arguing that it establishes a
broad, bright-line rule that a ruling on the merits of class certification is necessary to restart the
statute-of-limitations clock in all circumstances. Without such a ruling, plaintiffs believe tolling
continues as long as the case remains pending before the district court or on appeal. But the
context of that language makes clear that the court’s conclusion was far narrower.
Take this passage step-by-step. We first rejected defendants’ argument that Andrews
represented a bright-line rule against applying American Pipe tolling to subsequent class actions
brought by putative members of the first class action. We then distinguished Andrews from the
circumstances of Vertrue because in Andrews, “class certification had already been denied.” Id.
at 479. In contrast, “no court ha[d] definitively ruled on class certification” as to the Vertrue
plaintiffs when they were absent members of the putative Sanford class. Id. “Because the risk
motivating our decision in Andrews—namely, repetitive and indefinite class action lawsuits
addressing the same claims—[was] simply not present [in Vertrue],” we held that the Vertrue
plaintiffs were entitled to American Pipe tolling from “the commencement of the original
Sanford class action.” Id. at 479–80. And because “[t]he parties agree[d] that if American Pipe
tolling” applied, then “the plaintiffs’ federal claims were timely filed[,]” we affirmed the district
court. Id. at 480.
Thus, Vertrue confronted a single issue: whether a successive class action could claim the
benefit of American Pipe tolling. And our reasoning was confined to that question. We held that
American Pipe tolling applied to subsequent class actions when there was not a definitive denial
of class certification in the predicate class action.4 Put differently, if the prior district court had
denied class certification on the merits, a subsequent class action could not invoke American
Pipe tolling. But if there had been no merits adjudication of class status, there was no harm in
allowing American Pipe to apply to a successive class action. And because the parties only
disputed whether the tolling doctrine applied—not how long it lasted—our holding was
4
As an aside, we note that Vertrue’s holding may not have survived the Supreme Court’s later decision in
China Agritech, Inc. v. Resh, 138 S. Ct. 1800, 1806–09 (2018) (“The ‘efficiency and economy of litigation’ that
support tolling of individual claims . . . do not support maintenance of untimely successive class actions; any
additional class filings should be made early on, soon after the commencement of the first action seeking class
certification.” (citation omitted)).
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 10
appropriately limited to the conclusion that “the commencement of the original Sanford class
action tolled the statute of limitations under American Pipe.” Id.The cases before us now are different from Vertrue in two important ways. First, we are
not dealing with a subsequent class action and therefore Vertrue’s narrow “definitively”
language does not apply. Vertrue did not contemplate subsequent individual filings, as shown by
its focus on the risk of “repetitive and indefinite class action lawsuits addressing the same
claims” as the dispositive concern. Id. at 479 (emphasis added). This risk is irrelevant to
individual actions. Second, unlike the Vertrue court, we are deciding only how long tolling
lasted—not if it ever started—because the parties before us agree that American Pipe tolling
commenced upon the filing of the predicate class actions. No question related to the tolling
doctrine’s duration was ever before the Vertrue court because those parties “agree[d]” that the
plaintiffs’ federal claims were timely filed if American Pipe tolling was allowed. Vertrue, 719
F.3d at 480. Indeed, comparing Vertrue to these cases shows that the parties in one appeal
contest only what the parties in the other conceded. In Vertrue, the parties argued about whether
American Pipe tolling applied, but not how long it lasted; here, the parties dispute the length of
tolling, but not its initial application. Thus, our prior holding—which answered only the
threshold question of whether American Pipe tolling was permissible at all for subsequent class
actions—is not helpful to our current inquiries.
IV.
Because we lack controlling case law, we turn to the rationale of American Pipe tolling
itself to guide our decision. American Pipe tolling is the product of a “careful balancing of the
interests of plaintiffs, defendants, and the court system.” Korwek v. Hunt, 827 F.2d 874, 879 (2d
Cir. 1987). The doctrine aims to protect the putative class members’ reliance interests, satisfy
the need for defendants to have fair notice of claims being brought against them, and promote
judicial efficiency. See Chavez v. Occidental Chem. Corp., 933 F.3d 186, 198 (2d Cir. 2019).
We will first determine how these interests align with applying American Pipe tolling when a
district court denies a certification motion for administrative reasons, then consider how they
apply to appeals of dismissed, uncertified class actions. Along the way, we will also consider
how our sister circuits have answered these questions.
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A.
i.
Class actions “both permit[] and encourage[] class members to rely on the named
plaintiffs to press their claims.” Crown, Cork & Seal, 462 U.S. at 352–53. Other courts have
recognized that “American Pipe tolling extends as far as is justified by the objectively reasonable
reliance interests of the absent class members.” Bridges v. Dep’t of Md. State Police, 441 F.3d
197, 211 (4th Cir. 2006); see also Chavez, 933 F.3d at 198 (describing “reasonable reliance by
putative class members on the pending class action” as one of the “principles from which
American Pipe tolling derives”); Armstrong v. Martin Marietta Corp., 138 F.3d 1374, 1380 (11th
Cir. 1998) (en banc) (“The purpose of [American Pipe] tolling is to encourage class members
reasonably to rely on the class action to protect their rights.”).
Here, absent Hughes class members (like plaintiffs) reasonably relied on class
representatives to continue to represent them and press their claims after the administrative
denial of the motion for class certification. Judge Thapar’s order gave no indication that
class-action status was inappropriate or that the named plaintiffs were ill-suited to their task; it
merely stayed Hughes pending our resolution of a related appeal and denied the motion for class
certification without prejudice. There was no finding that the proposed class lacked numerosity
or commonality, or that the class representatives lacked typicality or adequacy. See Fed. R. Civ.
P. 23(a). In fact, the order provided that “[o]nce the Sixth Circuit rules on the legal issues, the
[Hughes] plaintiffs may file any motions they deem necessary.” Contrary to the SSA’s
argument, nothing in Judge Thapar’s order indicated that the named plaintiffs were relieved of
their duty to represent putative class members. Rather, a reasonable absent class member would
have seen Judge Thapar’s order for what it was: a case management tool meant only to clear his
docket ahead of a long stay. Thus, the reasonable reliance interests of the putative Hughes class
members favor applying American Pipe tolling to these circumstances.
ii.
For American Pipe to apply, tolling must also be consistent with the purposes served by
statutes of limitations. See American Pipe, 414 U.S. at 554; Crown, Cork & Seal, 462 U.S. at
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 12
352. “Limitations periods are intended to put defendants on notice of adverse claims and to
prevent plaintiffs from sleeping on their rights[.]” Crown, Cork & Seal, 462 U.S. at 352. Both
of “these ends are met when a class action is commenced.” Id. First, “a class complaint 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 353 (internal quotation marks omitted). And second, “class members who do not file suit
while a class action is pending cannot be accused of sleeping on their rights,” due to a class
action’s representative nature. Id. at 352.
Hughes made the SSA aware of the substantive claims being brought against it and of the
number and generic identities of the putative class members. Judge Thapar’s order changed
nothing; it expressed no opinion on the merits of the claims against the SSA or whether “the suit
[was] inappropriate for class action status.” China Agritech, Inc. v. Resh, 138 S. Ct. 1800, 1806
(2018) (quoting American Pipe, 414 U.S. at 553). Nor did it alter the number or identities of the
putative class members. And, as explained above, Hughes class members cannot be accused of
sleeping on their rights given their reasonable expectation that the class representatives would
continue to press their claims when the stay was lifted. Thus, allowing tolling in these
circumstances is consistent with the purposes of the statute of limitations.
iii.
Finally, American Pipe tolling serves class actions’ principal purpose: “efficiency and
economy of litigation.” American Pipe, 414 U.S. at 553; see China Agritech, 138 S. Ct. at 1811.
To that end, this doctrine avoids “a needless multiplicity of actions.” Crown, Cork & Seal, 462
U.S. at 351.
These efficiency interests would be best served by applying American Pipe tolling in the
circumstances of the Hughes denial. If American Pipe tolling does not extend beyond an
administrative denial like this one, absent class members would need to file individual
intervention motions or suits. The result would be a flood of individual filings without any prior
determination that these filings were necessary or that the filers were not served by the still-
pending putative class action. Indeed, many (if not all) of these filings would likely face the
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 13
same fate as Hughes: an administrative stay. And, if the court later addresses the merits of class
certification and certifies a class, these individual filings will have done nothing but
clutter district court dockets. That is “precisely the situation that Federal Rule of Civil
Procedure 23 and the tolling rule of American Pipe were designed to avoid.” Crown, Cork &
Seal, 462 U.S. at 351. Thus, American Pipe tolling’s efficiency interests support its application
after administrative denials like that which occurred in Hughes.
iv.
Because all of the interests underpinning American Pipe support continued tolling under
these circumstances, the Hughes denial did not restart plaintiffs’ statute-of-limitations clock.
We recognize that this conclusion seems at odds with the only other court of appeals that
has squarely considered this issue. In Bridges, the Fourth Circuit purported to adopt “the bright-
line rule that the statute of limitations ‘remains tolled for all members of the putative class until
class certification is denied’ for whatever reason.” 441 F.3d at 211 (emphasis omitted) (quoting
Crown, Cork & Seal, 462 U.S. at 354). The SSA asks us to adopt this approach, but we decline
this invitation for a few reasons.
First, the Fourth Circuit’s purported approach lacks any basis in Supreme Court
precedent. The phrase “for whatever reason” is the Fourth Circuit’s own invention; it appears
nowhere in Crown, Cork & Seal, which dealt with a certification motion that was denied on the
merits. See 462 U.S. at 347–48.
Second, the Bridges court’s repeated assertion that it was recognizing and applying a
bright-line rule is belied by its analysis, which instead reveals a far more fact-intensive approach.
The court discussed at length the reasonable expectations of absent class members who had
knowledge of the denial order and subsequent actions of the class representatives. See Bridges,
441 F.3d at 211 (“If the denial order left doubts in the minds of reasonable absent class members
whether they would be protected, then the acts that followed entry of that order surely put the
issue to rest.”); id. at 212 (“The individual plaintiffs actively pursued settlement negotiations for
themselves, and they so advised absent class members. . . . Such conduct by the representative
parties was inconsistent with the case proceeding as a class action . . . .”). Furthermore, the
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Fourth Circuit couched its conclusion on this issue in the “objective[] reasonable[ness]” of an
absent class member. Id. at 213. “Objective reasonableness” is a test that usually disfavors
bright-line rules. See, e.g., United States v. Ellis, 497 F.3d 606, 612 (6th Cir. 2007). So too of
equitable doctrines like American Pipe tolling. See Griffin v. Rogers, 399 F.3d 626, 639 (6th Cir.
2005) (quoting Harris v. Hutchinson, 209 F.3d 325, 328 (4th Cir. 2000)); see also Cal. Pub.
Emps.’ Ret. Sys. v. ANZ Sec., Inc., 137 S. Ct. 2042, 2051 (2017) (explaining that “the source of
the tolling rule applied in American Pipe is the judicial power to promote equity”). In short, we
do not read Bridges as necessarily having adopted a bright-line rule; had it done so, we would
have expected the decision to have noted the denial of class certification and left it at that.
Finally, the Fourth Circuit did not confront a situation like this one, where the denial of
class certification was made without prejudice alongside an administrative stay. So it had no
occasion to assess the “would-be plaintiffs’ equities” or the unique considerations that this case
presents. Bridges, 441 F.3d at 213.
Accordingly, we hold that the Hughes administrative denial did not terminate American
Pipe tolling, so the actions filed by Potter and Adams are timely. We therefore reverse the
district courts’ dismissal of those actions.
B.
For Messer’s suit to be timely, he must be able to claim an additional period of American
Pipe tolling from the Martin appeal. Unfortunately for him, the courts of appeals that have
considered this issue are unanimous that the dismissal of an uncertified class action terminates
American Pipe tolling and resumes the running of statutes of limitations as to absent class
members. See, e.g., Collins v. Village of Palatine, 875 F.3d 839, 845 (7th Cir. 2017) (“An
uncertified class-action suit is decidedly not a class action once all class claims have been
dismissed. The statute of limitations immediately resumes.”); Taylor v. United Parcel Serv.,
Inc., 554 F.3d 510, 517 (5th Cir. 2008) (holding that, while members of a certified class may
continue to rely on representatives during an appeal, “[t]he same result does not flow for
members of a putative class that has not been certified”); Stone Container Corp. v. United States,
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 15
229 F.3d 1345, 1355 (Fed. Cir. 2000) (“[T]olling ends with the district court’s dismissal of the
class action.”).
This result also aligns with the general rule that appealing an unfavorable class-action
decision does not preserve American Pipe tolling. See Giovanniello v. ALM Media, LLC, 726
F.3d 106, 117 (2d Cir. 2013) (“If the [Supreme] Court had contemplated that tolling
continued . . . through appeal, there would be no need for class members to take action to protect
their rights [after a denial of class certification].”); Armstrong, 138 F.3d at 1382 (American Pipe
“clearly assumed that tolling should end when the district court denies class certification, not
after the appeals process has run and some later order is entered.”); Hall v. Variable Annuity Life
Ins. Co., 727 F.3d 372, 376 (5th Cir. 2013) (“[T]he unsuccessful appeal of either a decertification
or a denial of certification does not extend the tolling period.”).5
This rule makes sense when considering the purposes of the tolling doctrine. “When the
[named] plaintiff’s own claim is dismissed, he can no longer be the class representative.”
Collins, 875 F.3d at 846 (internal quotation marks and citation omitted). The decision to dismiss
is a de facto determination that the class representative lacks adequacy or typicality. See Fed. R.
Civ. P. 23(a)(3)–(4). Therefore, absent class members can no longer reasonably rely on the
named class representative to protect their rights and must take action themselves.
A contrary rule would also contravene the reasons for statutes of limitations. While the
filing of a class complaint puts the defendants on notice of the nature and scope of the claims
against them, the dismissal of that complaint puts them back at ease. See Collins, 875 F.3d at
845. Moreover, while the district court can usually decide a promptly filed motion to dismiss
relatively quickly—often before the certification motion, which must be decided at an “early
practicable time,” Fed. R. Civ. P. 23(c)(1)(A)—appeals stretch for months or years. Thus,
applying American Pipe tolling during an appeal would mean that every dismissed class action
would significantly extend an absent class member’s statute of limitations, allowing evidence to
5
We do not foreclose the possibility of an exception to this rule when the appellate court reinstates the
action’s class character, as some courts have suggested in dictum. See Hall, 727 F.3d at 376 n.8 (“If a denial of
certification is reversed on appeal, the putative class members can claim the benefit of uninterrupted tolling from the
original class action filing date.”). But even if that exception exists, it would not apply here because we remanded
Martin with instructions to dismiss the case as moot. We did not reinstate its class character.
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 16
be lost, memories to fade, and witnesses to disappear. See American Pipe, 414 U.S. at 554.
Such a rule would also fly in the face of judicial economy by encouraging the filing of frivolous
class actions, aimed not at efficiently redressing harms but at buying time for individual claims.
Consistent with our sister circuits’ case law and the rationale of American Pipe tolling,
we hold that once an uncertified class action is dismissed, American Pipe tolling ceases, and the
class members’ individual statute-of-limitations clocks begin running. This means that the
pendency of the Martin appeal did not suspend Messer’s time to file an individual action.
Accordingly, Messer’s action was untimely, and we affirm the district court’s judgment.
V.
There is one more loose end to tie up. Messer asserts that he is entitled to equitable
tolling. But “[i]t is well-settled that this court’s function is to review the case presented to the
district court, rather than a better case fashioned after an unfavorable order,” so “[a]rguments not
squarely presented to the district court are not reviewed on appeal.” Thomas M. Cooley Law
Sch. v. Kurzon Strauss, LLP, 759 F.3d 522, 528 (6th Cir. 2014) (quotation omitted). Messer did
not raise a traditional equitable-tolling argument below, instead relying solely on American Pipe.
He argues that reference to that tolling rule was enough to preserve an equitable-tolling argument
because American Pipe is an equitable doctrine. Yet in making his equitable-tolling argument
now, he points to factors that differ from American Pipe tolling, including his reasonable
uncertainty regarding American Pipe tolling’s duration, his diligence in filing suit, and the lack
of prejudice faced by the SSA. This is a textbook example of a “better case fashioned after an
unfavorable order” that incorporates “[a]rguments not squarely presented to the district court.”
Id.Messer also argues that, even if he forfeited equitable tolling, the Court should exercise
its discretion to still consider that argument. “This court will exercise its discretion to entertain
issues not raised before the district court only in exceptional cases or when application of the rule
would produce a plain miscarriage of justice.” Id. (quotation marks and brackets omitted).
Messer does not explain why he failed to raise his equitable tolling argument before the district
Nos. 20-5550/5551/5552 Potter, et al. v. Comm’r of Soc. Sec. Page 17
court, or why a miscarriage of justice would occur if we adhere to our usual rule, so we decline
to excuse his forfeiture.
VI.
For these reasons, we reverse the dismissals in Potter (Case No. 20-5550) and Adams
(Case No. 20-5551) and remand those cases for proceedings consistent with this opinion.
We affirm the district court’s judgment in Messer (Case No. 20-5552).