‘Tolled’ means ‘stop the clock’ for time to refile state-law claims after federal claims dismissed
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Wednesday, January 24, 2018

‘Tolled’ means ‘stop the clock’ for time to refile state-law claims after federal claims dismissed

By Joy P. Waltemath, J.D.

In a procedural decision arising out of dismissed federal and state employment discrimination claims, a 5-4 Supreme Court held that 28 U.S.C. §1367(d), which says that the period of limitations for refiling state claims after they have been dismissed in a federal court action “shall be tolled while the claim is pending [in federal court],” stops the clock while the claim is in federal court, and it starts running again when the tolling period ends. Accordingly, an employee’s state-law claims that were dismissed from federal court after two and a half years and were refiled in state court 59 days later were timely, because the applicable statute of limitations for her D.C. law claims was suspended while her federal suit was pending. Notably, Chief Justice Roberts joined the liberal wing of the court in the majority opinion authored by Justice Ginsburg; Justice Gorsuch dissented (Artis v. District of Columbia, January 22, 2018, Ginsburg, R.).

What to do with dismissed state-law claims? Federal district courts may exercise supplemental jurisdiction over state claims not otherwise within their adjudicatory authority if those claims are “part of the same case or controversy” as the federal claims the plaintiff asserts. When a district court dismisses all claims independently qualifying for the exercise of federal jurisdiction, it ordinarily also dismisses all related state claims. 28 U.S.C. §1367(d) provides that the “period of limitations for” refiling in state court a state claim so dismissed “shall be tolled while the claim is pending [in federal court] and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.”

When the employee, a health inspector, filed a federal-court suit against the District of Columbia alleging a federal Title VII employment-discrimination claim and three allied claims under D.C. law, nearly two years remained on the applicable statute of limitations for her D.C.-law violations, which included whistleblower retaliation, statutory wrongful termination, and public policy wrongful termination. Two and a half years later, the district court ruled against the employee on her sole federal claim and dismissed the D.C.-law claims; 59 days after that dismissal, the employee refiled her state-law claims in the D.C. state court, but that court dismissed them as time-barred. The appeals court affirmed, holding that the statute gave the employee only a 30-day grace period to refile in state court because that “better accommodates federalism concerns”; it rejected her argument that “tolled” in Section 1367(d) means that the limitations period was suspended during the pendency of the federal suit.

The Supreme Court majority framed the issue to be whether “the word ‘tolled,’ as used in §1367(d), means the state limitations period is suspended during the pendency of the federal suit; or does ‘tolled’ mean that, although the state limitations period continues to run, a plaintiff is accorded a grace period of 30 days to refile in state court post dismissal of the federal case?”

To “toll” means to stop the clock. According to the majority’s reasoning, there are two ways that statutes protecting claims that were filed in another forum from being time-barred work. One is to be “tolled” or suspended, while the claim is pending elsewhere; “the time clock starts running again when the tolling period ends, picking up where it left off.” Or a legislature may elect to provide a grace period, allowing the statute of limitations to run while the claim is pending in another forum and giving the plaintiff a fixed period in which to refile.

The statute uses “toll.” Section 1367(d) uses the language of a tolling provision: “It suspends the statute of limitations both while the claim is pending in federal court and for 30 days post dismissal,” said the majority, agreeing with the employee’s interpretation. The District, in contrast, had read “tolled” to mean to remove, temporarily, the bar that would ordinarily accompany the expiration of the limitations period, which the Court said was “a strained interpretation of the phrase ‘period of limitations’ and ‘could yield an absurdity, permitting a plaintiff to refile in state court even if the limitations period on her claim had expired before she filed in federal court.’”

It was significant to the High Court that the District had not identified any federal statute in which a grace-period meaning has been ascribed to the word “tolled” or any word similarly rooted. Nor had the dissent “identified even one federal statute that fits its bill, i.e., a federal statute that says ‘tolled’ but means something other than ‘suspended,’ or ‘paused,’ or ‘stopped.’”

Plus a grace period. After disposing of the argument that Congress had adopted an American Law Institute 1969 recommendation to allow refiling in state court only for 30 days after a dismissal, the majority turned to Section 1367(d)’s 30-day federal floor on the time allowed for refiling in state court. Why would that grace-period provision be included, suggested the District, if the tolling provision meant suspend or stop the clock? This additional 30-day grace period accounted for cases in which a plaintiff filed a federal action close to the date the relevant state statute of limitations expired, by giving a plaintiff “breathing space” to refile in state court, reasoned the Court, finding it not unusual in stop-the-clock statutes. The Court also noted Section 1367(d)’s proviso “unless State law provides for a longer tolling period,” which also would aid a plaintiff who filed in federal court just before the state limitations period was set to expire.

Exceed Congressional authority? Although the District also asked whether the statute exceeded Congress’ authority under the Necessary and Proper Clause “because its connection to Congress’ enumerated powers is too attenuated or because it is too great an incursion on the States’ domain,” the majority found that a “stop-the-clock” interpretation of Section 1367(d) did not present a serious constitutional problem. Specifically, in Jinks v. Richland County (2003), the Court earlier rejected an argument that Section 1367(d) impermissibly exceeded Congress’ authority under the Necessary and Proper Clause. The District contended that a stop-the-clock prescription serves “no federal purpose” that could not be served by a grace-period prescription. Both a stop-the-clock prescription and a grace-period prescription are “standard, off-the-shelf means of accounting for the fact that a claim was timely” in another forum, reasoned the Court.

“Requiring Congress to choose one over the other would impose a tighter constraint on Congress’ discretion than this Court has countenanced,” and concerns that a stop-the-clock approach is a greater imposition on the states than a grace-period approach “may also be more theoretical than real,” the majority concluded, reversing and remanding. A stop-the-clock rule supports primary reason behind limitations statutes: “preventing surprises” to defendants and “barring a plaintiff who has slept on his rights,” continued the majority, because when the statute applies, defendants will have notice of the plaintiff’s claims within the state-prescribed limitations period as a plaintiff will have timely asserted those rights by attempting to pursue them in one litigation in federal court.

Dissent. Justice Gorsuch, although acknowledging early on that the majority opinion’s interpretation of “toll” was both possible and historically common, predicted the majority’s approach “will require state courts to entertain state law claims that state law deems untimely not only by weeks or months but by many years.” He went on to explain that “the Court demands all this without offering any rational account why it is necessary or proper to the exercise of one of the federal government’s limited and enumerated powers. It may only be a small statute we are interpreting, but the result the Court reaches today represents no small intrusion on traditional state functions and no small departure from our foundational principles of federalism.”

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