- Second Circuit Court of Appeals Addresses TCPA
- August 30, 2013 | Authors: Reid S. Manley; Jennifer E. Ziemann
- Law Firms: Burr & Forman LLP - Birmingham Office ; Burr & Forman LLP - Atlanta Office
In Giovanniello v. ALM Media, LLC, No. 10-3854-CV, - F.3d -, 2013 WL 4016567 (2d Cir. Aug. 8, 2013), the Court of Appeals for the Second Circuit held that (1) the federal four-year statute of limitations applies to claims under the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”); and (2) the tolling of the limitations period during the pendency of a putative class action ceases upon the initial denial of class status.
In an earlier decision, the Second Circuit applied the state-law statute of limitations and affirmed the dismissal of the plaintiff’s TCPA claim as time-barred. Giovanniello v. ALM Media, LLC, 660 F.3d 587 (2d Cir. 2011). The Supreme Court vacated that judgment, and remanded the case for further consideration in light of Mims v. Arrow Financial Services, LLC, 132 S. Ct. 740, 181 L. Ed. 2d 881 (2012). Giovanniello v. ALM Media, LLC, 133 S. Ct. 159, 184 L. Ed. 2d 1 (2012).
On remand from the Supreme Court, the court recognized that “Mims has now changed the jurisdictional landscape for TCPA claims,” casting doubt on the authorities underlying its earlier holding. While Mims did not address the statute of limitations applicable to a TCPA claim, it did establish that claims under the TCPA can give rise to federal-question jurisdiction. The Mims court explained that “[b]eyond doubt, the TCPA is a federal law that both creates the claim [the plaintiff] has brought and supplies the substantive rules that will govern the case.” This reasoning undermined the Second Circuit’s prior interpretation of § 227(b)(3), which was the basis for its conclusion that the state statute of limitations applied to TCPA claims.
Section 227(b)(3) provides that “[a] person or entity may, if otherwise permitted by the laws or rules of court of a State, bring [an action] in an appropriate court of that State.” 47 U.S.C. § 227(b)(3). Previous decisions interpreted this state-centric language “as a delegation by Congress to the states of considerable power to determine which causes of action lie under the TCPA.” Reexamining the meaning of § 227(b)(3) following Mims, the court concluded that § 227(b)(3) was intended to give state courts the power to decide whether to entertain TCPA claims. It was not intended to displace the federal four-year limitations period of 28 U.S.C. § 1658(a).
Turning to the plaintiff’s argument on tolling, the court took the opportunity to address the scope of tolling under American Pipe & Construction Co. v. Utah, 414 U.S. 538, 94 S. Ct. 756, 38 L. Ed. 2d 713 (1974), joining other circuits and holding that American Pipe tolling does not extend beyond the denial of class status. The Supreme Court in American Pipe held that “the commencement of the class action in th[e] case suspended the running of the limitations period only during the pendency of the motion to strip the suit of its class action character.” In Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 103 S. Ct. 2392, 76 L. Ed. 2d 628 (1983), the Supreme Court added that once class certification is denied, “class members may choose to file their own suits or to intervene as plaintiffs in the pending action.” At that point, the named plaintiff no longer has a duty to putative class members, and class members cannot reasonably rely on the class action suit to protect their rights. Noting the need for a bright-line rule in this area of law, the court concluded that neither a motion for reconsideration nor an appeal serve to toll the limitations period following the denial of class status.