Justices Hold Federal Dismissals Stop the Clock on State Law Claims

(CN) – A divided Supreme Court ruled Monday that the statute-of-limitations clock is stopped on state claims dismissed as part of federal cases.

The lawsuit that worked its way before the justices was filed by Stephanie Artis, a one-time health inspector for the District of Columbia, who sued her former employer in federal court shortly after her firing in November 2010.

In her suit, Artis leveled a federal employment discrimination claim against the city and three related claims under D.C. law.

Though a federal judge granted the city health Department judgment on the pleadings with respect to Artis’ federal claim, the court did not exercise jurisdiction over the claims arising under D.C. law.

Artis refiled those claims on Aug. 25, 2014 – 59 days after the U.S. District Court ruled against her – but was again unsuccessful.

Section 1367(d) of Title 28 has language about tolling the statute of limitations, or putting it on hold, but Judge Herbert Dixon Jr. determined that the statute creates a 30-day period for a claimant to file actions over which the U.S. District Court lacked jurisdiction.

There were nearly two years remaining on the statute of limitations when Artis filed her federal complaint, however, and she claimed she had that period, plus 30 days, to file her claims in D.C. Superior Court.

In April 2016, the D.C. Court of Appeals affirmed dismissal, agreeing with the district’s interpretation of “tolled” as meaning a 30-day “grace period” will apply if the limitations period for the state-based claims expires while the claim is pending in the federal court.

Artis argued unsuccessfully for the court to find that “tolled” means to suspend the local statute of limitations at the point the federal suit was filed.

But Justice Ruth Bader Ginsberg, writing for the majority on Monday, sided with Artis and held the appellate court erred in concluding the fired worker had only 30 days to refile her complaint in state court after its dismissal in federal court.

She was joined in the majority by Chief Justice John Roberts, and associate justices Stephen Breyer, Sonia Sotomayor and Elena Kagan.

For Ginsberg, the question came down to a matter of Congressional intent, and in her view, the lower courts in this case misinterpreted the legislative history behind the creation of Section 1367(d) of Title 28.

The Justice also found fault in the respondent’s argument that imposing a stop-the-clock approach on such cases would be a greater imposition on the states than regime enshrined in the appeals court ruling.

Ginsburg dismissed the argument, saying such concerns are “more theoretical than real.”

“Consider the alternative suggested by the D. C. Superior Court,” she wrote. “Plaintiffs situated as Artis was could simply file two actions and ask the state court to hold the suit filed there in abeyance pending disposition of the federal suit. … Were the dissent’s position to prevail, cautious plaintiffs would surely take up the D. C. Superior Court’s suggestion.

“How it genuinely advances federalism concerns to drive plaintiffs to resort to wasteful, inefficient duplication to preserve their state-law claims is far from apparent,” Ginsberg said.

The justice went on to say that “a stop-the-clock rule is suited to the primary purposes of limitations statutes: ‘preventing surprises’ to defendants and ‘barring a plaintiff who has slept on his rights.’”

“Whenever §1367(d) applies, the defendant will have notice of the plaintiff ’s claims within the state-prescribed limitations period. Likewise, the plaintiff will not have slept on her rights. She will have timely asserted those rights, endeavoring to pursue them in one litigation,” Ginsberg said.

But in a dissent, Justice Neil Gorsuch said Ginsberg had gotten the issues all wrong in the case. He was joined in dissent by justices Anthony Kennedy, Clarence Thomas, and Samuel Alito.

Borrowing from the English writer and philosopher G.K. Chesterton, Gorsush said there’s a danger in clearing away “a fence just because we cannot see its point.”

“Even if a fence doesn’t seem to have a reason, sometimes all that means is we need to look more carefully for the reason it was built in the first place,” he said. “The same might be said about the law before us.”

To Gorsush what Ginsburg and her colleagues in the majority had done was clear away a traditional rule cause they mistakenly overlooked the original reasons for it.

As a result, “the Court now reads the law to guarantee parties not 30 days or whatever state law permits but months or years more to refile their dismissed state law claims in state court,” he wrote.

But this “alternative reading” of the legislative history “extends too little respect to Congress’s competency as drafter. It asks us to assume the legislature was so garbled in its expression that it switched the meaning of the term ‘toll’ halfway through a single sentence without telling anyone,” Gorsuch said.

He continued: “The stop-clock approach, then, ensures that traditional state law judgments about the appropriate lifespan of state law claims will be routinely displaced — and displaced in favor of nothing more than a fortuity (the time a claim sits in federal court) that bears no rational relationship to any federal interest. The Court’s approach forces state courts to entertain routinely state law claims that the state legislatures treat as no claims at all.”

Gorush concluded by accusing the majority of clearing away a fence “that once marked a basic boundary between federal and state power.

“Maybe it wasn’t the most vital fence and maybe we’ve just simply forgotten why this particular fence was built in the first place. But maybe, too, we’ve forgotten because we’ve wandered so far from the idea of a federal government of limited and enumerated powers that we’ve begun to lose sight of what it looked like in the first place,” Gorsuch wrote. “If the federal government can now, without any rational reason, force States to allow state law causes of action in state courts even though the state law limitations period expired many years ago, what exactly can’t it do to override the application of state law to state claims in state court? What boundaries remain then?”

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