‘American Pipe’ tolling doesn’t save untimely appeal

The U.S. Supreme Court’s American Pipe & Construction Co. v. Utah rule tolls a statute of limitations only until class status is denied, either by the trial court or on appeal, the 4th U.S. Circuit Court of Appeals held in affirming dismissal of a class
action dispute.

Several former employees had filed suit against RTX Corp. in Arizona federal court, alleging their employer discriminated against them based on their religious objections to wearing face masks as required by a COVID-19 workplace safety policy.

The Arizona court dismissed the claims and denied the motion for class certification.

Joined by additional plaintiffs, the employees sued again, this time in the Eastern District of Virginia. Holding that the claims were barred by res judicata and had not been filed within the applicable statute of limitations, the Virginia federal court dismissed the action.

Relying on American Pipe, the plaintiffs appealed. But the 4th Circuit was not persuaded.

“Although the Arizona Appellants moved for class certification, that motion was denied as moot on February 27, 2023,” the per curiam panel wrote. “Therefore, American Pipe tolling could have given Appellants who received their right to sue letter before that date at most until May 28, 2023, to file suit in their individual capacities, but Appellants did not file this action until eighteen months later, on November 20, 2024.”

The 13-page unpublished opinion in Grace v. RTX Corporation (VLW 026-2-169) was authored by Judges James A. Wynn, Stephanie D. Thacker and Nicole G. Berner.

1. Scott Lloyd of the Lloyd Law Group in Front Royal was counsel for the plaintiffs. Boston attorney Dawn R. Solowey of
   Seyfarth Shaw represented RTX Corp. Neither lawyer responded to requests for comment.

Both suits dismissed

During the pandemic, RTX issued a new internal workplace safety policy that required employees to be vaccinated against COVID-19 and remain current on their vaccinations.

The policy offered an accommodation for any employees who declined to be vaccinated out of medical necessity or religious objection, allowing those workers to wear a mask at work, test weekly for COVID-19 and practice social distancing.

A group of employees objected, arguing that the masking policy singled them out and made them easily identifiable as having an objection to vaccination. Some resigned, and RTX fired others.

They sued in U.S. District Court in
Arizona, alleging that RTX discriminated and retaliated against them for their sincerely held religious beliefs in violation of Title VII.

RTX moved to dismiss, and the court granted the motion, dismissing all individual claims with prejudice. With the individual claims dismissed, the District Court then denied the motion for class certification as moot.

The 9th Circuit affirmed dismissal, and the U.S. Supreme Court denied certiorari.

After adding three new plaintiffs, the Arizona plaintiffs filed a nearly identical action in Virginia federal court, which held that most of the claims were barred by res judicata and the remaining claims were time barred. The case was dismissed as untimely.

The plaintiffs appealed.

Timelines and tolling

In filing suit, a Title VII plaintiff must inform the Equal Employment Opportunity Commission of the basis of the complaint so that the agency can attempt mediation with the employer. If that fails, or the EEOC declines to act on the complaint, the plaintiff can request a “right to sue” letter from the agency. A plaintiff cannot sue the employer until receiving that letter, and then must do so within 90 days.

In Grace, the first right to sue letter was received on Oct. 3, 2022, and the last on Aug. 5, 2024. Under the EEOC’s regulations, the latest date that any of the plaintiffs could have sued was Nov. 3, 2024, or 90 days after Aug. 5, 2024.

But the present action did not commence until 107 days later, on Nov. 20, 2024, the 4th Circuit panel pointed out.

The plaintiffs addressed that issue by contending that the American Pipe rule saved their case. The rule provides that the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action. Once the statute of limitations has been tolled, it remains tolled for all members of the putative class until class certification is denied. At that point, class members may choose to file their own suits or to intervene as plaintiffs in the pending action.

When does tolling end?

According to the plaintiffs, American Pipe tolling lasts through the pendency of appeal.

But the 4th Circuit panel disagreed.

The Arizona plaintiffs’ motion for class certification was denied as moot on Feb. 27,
2023, giving them at most until May 28, 2023, to file suit in their individual capacities — and the Virginia action wasn’t filed until 18 months later, on Nov. 20, 2024.

Even extending American Pipe through the pendency of appeal would not save the case, the court added, as the 9th Circuit affirmed dismissal on April 29, 2024, giving a window of tolling until July 28, 2024.

“[I]n order to prevail, [the plaintiffs] would require a ruling that American Pipe tolls statutes of limitation until denial of a writ of certiorari, as the Supreme Court’s denial of certiorari in this case — which came on October 21, 2024 — was the only appellate development in the Arizona action that occurred within 90 days of [their] filing in the Virginia action,” the panel said. “[S]uch a theory is unpersuasive.”

Although the plaintiffs cited opinions from the Kansas and Utah Supreme courts, those cases were of no precedential value and were distinguishable, the court noted. Alternatively, every federal circuit to consider the issue — the 2nd, 3rd, 5th, 6th, 7th, 11th and Federal circuits — have held that American Pipe tolls a statute of limitations only until class status is denied, either by the District Court or on appeal.

“The American Pipe rule thus tolled the statute of limitations for prospective class members only until [Feb. 27, 2023], at which time the statutory clock resumed for all Appellants,” the panel concluded. “And because every Appellant had received a right to sue letter by August 5, 2024, none of the Appellants’ individual claims could have been timely after November 3, 2024 — 90 days later. This action commenced on November 20, 2024 — 107 days later. The claims are therefore untimely, and the district court properly dismissed the action.”

Grace v. RTX Corporation

Issue           Does the American Pipe & Construction Co. v. Utah rule toll a statute of limitations only until class status is denied, either by the trial court or on appeal?

Answer      Yes (4th U.S. Circuit Court of Appeals)

Attorneys  E. Scott Lloyd, Lloyd Law Group, Front Royal (plaintiffs) Dawn R. Solowey, Seyfarth Shaw, Boston (defendant)

• Grace v. RTX Corporation