SCOTUS to Decide When Statute of Limitations is Tolled After Dismissal of State Law Claims Without Prejudice

Gavel on desk

“For Whom the Bell Tolls”

Litigants often try to resolve their federal and state law claims in a single action. In order for a federal court to hear state law claims, it must invoke supplemental jurisdiction, codified at 28 U.S.C. § 1367. As long as the court has subject matter jurisdiction and the state law claim arises out of the same transaction or occurrence, the federal court can hear the state law claim. However, the courts have the discretion to decline to hear the state law claim. In such a case, the state law claim is dismissed without prejudice, and the plaintiff is free to refile that claim in the appropriate state court. But how much time does the plaintiff have to refile before the statute of limitations expires? Section 1367(d) addresses the question, but its seemingly straightforward language has given rise to competing interpretations, which have made their way to the U.S. Supreme Court in Artis v. District of Columbia, 135 A.3d 334 (D.C. Cir. 2016) cert. granted (U.S. Feb. 27, 2017) (No. 16-460).

Section 1367(d) states, “The period of limitations . . . shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.” In 2011 Stephanie Artis filed suit against her employer, the District of Columbia, after being fired. She alleged a federal claim, a violation of Title VII of the Civil Rights Act, and claims under DC state law. (For the purposes of § 1367, DC is considered a state.) The DC state law claims had a statute of limitations of three years. The federal court did not reach a decision until 2014, at which time the statute of limitations had expired. The court granted summary judgment to the District on the federal claim, leaving only state law claims, which it dismissed without prejudice. Artis refiled her state law claims 59 days after the dismissal. The District moved for dismissal, contending that Artis failed to refile within the 30-day time period required by § 1367(d). The trial court granted the motion, and the appellate court affirmed, both concluding that the statute is ambiguous but the legislative history points to a grace period rather than a suspension of the statute of limitations.

Artis appealed to the Supreme Court. The Court certified the question, “whether the tolling provision in §1367(d) suspends the limitations period for the state-law claim while the claim is pending and for thirty days after the claim is dismissed, or whether the tolling provision does not suspend the limitations period but merely provides 30 days beyond the dismissal for the plaintiff to refile.” In their briefs, the parties argued that § 1367(d) is not ambiguous and argued the bases of their differing interpretations. Artis insisted that the word “tolled,” as used in § 1367(d), meant “to suspend,” and thus the period of limitations was suspended while her case was pending in federal court. Once the state law claims were dismissed, Artis’ interpretation was that she had the remainder of the limitations period plus 30 days in which to refile. The District interpreted § 1367(d) as granting plaintiffs a grace in period in which to refile, meaning that the limitations period was not tolled but continued to run and Artis had 30 days to refile before her claim was time-barred.

During oral arguments, held November 1, when questioning Artis’ attorney, the Court seemed mostly concerned with the effects that the suspension approach would have on State sovereignty. The Justices first inquired into whether the suspension approach gives plaintiffs an excessive amount of time in which to refile their claims in state court. They also questioned Artis’ counsel about whether this approach displaces the effect of the States’ statutes of limitations. Lastly, they wondered about the constitutional limits of Congress’s authority to toll and extend States’ statutes of limitations.

When questioning the D.C. Deputy Solicitor General, the Court was more concerned with the textual inconsistencies between the common definition of “tolled” (which the Court noted was understood by most lawyers to mean “suspended”) and “grace period.” The Justices made the point that if Congress wanted a grace period, they could have expressly done so, using language from existing grace period statutes.

Ultimately, the Court seems to be grappling with two questions (1) how much the text of § 1367(d) supports a suspension approach, and (2) what effect suspension has on States’ sovereignty.

The outcome of this case will affect plaintiffs and States differently. If the Court decides § 1367(d) provides for a grace period, this could greatly limit the amount of time plaintiffs have to refile in state court after a dismissal without prejudice. Within 30 days, plaintiffs will be expected to revise their complaints to conform to state court rules and procedures.

Notwithstanding the problems the grace period approach creates, the suspension approach would also create problems for States. States may feel that by interpreting § 1367(d) as a suspension, the Court would be invading the province of their respective legislatures. States alike may feel that the Court is legislating from the bench, ruling in such a way that affects the operation not only of federal procedural rule but also a state substantive law.

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