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Sixth Circuit Establishes New Precedent Sustaining Class-Action Claims Against Timeliness

May 24, 2013

Recognizing its precedential significance, the Sixth Circuit on May 24, 2013, ordered the publication of its previously unpublished April 16, 2013, opinion rejecting contentions that a telemarketing-fraud case was time barred.  Victims of the telemarketing scheme argued that under the Supreme Court’s 1974 American Pipe decision, the filing of a prior class action complaint tolled the limitations period on their federal claims, and that a federal statute, 28 U.S.C. §1367(d), tolled the limitations period on their state-law claims – permitting them to file follow-on class actions when the initial case terminated without obtaining class-wide relief.  The defendants urged that a Sixth Circuit decision interpreting American Pipe permitted the filing of individual claims but barred further litigation on behalf of a class.  Defendants also argued that the court should hold, as a matter of first impression, that §1367(d) applies only to named parties’ claims and does not toll the time for claims of a class to be asserted.  The Sixth Circuit flatly rejected both contentions in an opinion holding that American Pipe permits a follow-on class action if class certification was never definitively in the initial action, and that §1367(d) protects class members as well as named plaintiffs.  See In re Vertrue Inc. Marketing and Sales Practices Litigation, No. 10-3928 (6th Cir., decided April 16, 2013; published May 24, 2013).

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