Elawyers Elawyers
Ohio| Change

Vaught,et al v. Showa Denko K K,etal, 96-20200 (1997)

Court: Court of Appeals for the Fifth Circuit Number: 96-20200 Visitors: 13
Filed: Jun. 02, 1997
Latest Update: Mar. 02, 2020
Summary: REVISED UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _ No. 96-20200 _ JANET L. VAUGHT et al., Plaintiffs-Appellants, versus SHOWA DENKO K.K. et al., Defendants-Appellees. _ Appeals from the United States District Court for the Southern District of Texas _ March 10, 1997 Before HIGGINBOTHAM, SMITH, and BARKSDALE, Circuit Judges. RHESA HAWKINS BARKSDALE, Circuit Judge: For this diversity action, the key issues at hand are when the limitations period began running under Texas law for the Va
More
                                 REVISED
                  UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT

                         _____________________

                              No. 96-20200
                         _____________________

                        JANET L. VAUGHT et al.,

                                                 Plaintiffs-Appellants,

                                 versus

                        SHOWA DENKO K.K. et al.,

                                                  Defendants-Appellees.

_________________________________________________________________

           Appeals from the United States District Court
                 for the Southern District of Texas

_________________________________________________________________
                          March 10, 1997

Before HIGGINBOTHAM, SMITH, and BARKSDALE, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge:

     For this diversity action, the key issues at hand are when the

limitations period began running under Texas law for the Vaughts’
cause of action arising out of Janet L. Vaught’s use of L-

tryptophan, a nutritional supplement, and whether her membership in

a putative federal class action in another State tolled the Texas

limitations   period     until   class     certification   was   denied.

Asserting, inter alia, that a diligent, but fruitless, inquiry was

made as to whether the Vaughts had a cause of action, the Vaughts

challenge the summary judgment granted Defendants on limitations

grounds.   We AFFIRM.

                                   I.
     In August 1987, while hospitalized for injuries received in an

automobile   accident,   Janet   Vaught     (Vaught)   was    prescribed    L-

tryptophan, an over-the-counter nutritional supplement.              She had

never taken this product.     After her hospitalization, however, she

continued to take L-tryptophan for several months pursuant to

prescription purchases.      In late 1987 or early 1988, she began to

experience various unexplained physical symptoms: fatigue, swollen

neck glands, sore throats, body aches, burning sensations, tingling

on her legs, and muscle and joint pain.            She stopped taking L-

tryptophan   in   December   1988,   when    she   learned    that   she   was

pregnant.

     On 4 April 1990, Vaught read a newspaper article about an

action filed by a Houston, Texas, lawyer on behalf of a woman who

allegedly contracted eosinophilia myalgia syndrome (EMS) from L-

tryptophan. EMS is a multisystemic disorder characterized by severe

muscle and joint pain, swelling of the arms and legs, skin rash,

fever, and sometimes neuropathy, resulting in paralysis and death.

In the fall of 1989, the Food and Drug Administration (FDA)

established that over 280 cases of EMS were connected to the

ingestion    of     L-tryptophan,      a      “virtually        unequivocal”

epidemiological link. As a result, the FDA issued a nationwide,

mandatory recall of L-tryptophan in late November 1989.

     Vaught noticed that she suffered some of the same symptoms

that the newspaper article described as indicative of EMS, such as

fatigue, stiffness, and muscle and joint pain.               She contacted a

paralegal (now the Vaughts’ lawyer) in the Houston lawyer’s office,


                                  - 2 -
to obtain information about EMS, although Vaught contends that she

did not think she had EMS at that time.              Her contact with that law

firm led her to contact two doctors conducting an EMS study at

Baylor University Medical School, Drs. Harati and McKinley.

     Dr. McKinley sent her an “L-tryptophan Eosinophilia-Myalgia

Patient    Data      Sheet”.      When     Vaught    began     filling    out   the

questionnaire on 18 April 1990, she thought she might have EMS, so

she called the Baylor doctors for their opinion.               Vaught spoke with

each of them at the end of April.

     Also in April 1990, after reading the newspaper article,

Vaught    contacted     Dr.    Keichian,    who     had   treated   her   for   her

automobile accident injuries, and told him that she had taken L-

tryptophan.       Dr. Keichian ordered a blood test, and on 25 April

told Vaught that her eosinophil levels were normal and that she did

not have EMS.

     That June, Vaught arranged to have an examination done by one

of the Baylor doctors, Dr. Harati.           She brought her medical records

and the completed Patient Data Sheet to the examination.                        Once

again, she was advised that she had normal eosinophil levels in her

blood and did not have EMS.              Dr. Harati referred Vaught to Dr.

Croock, a Baylor University rheumatologist, for further evaluation.

     Vaught was examined by Dr. Croock on 13 July 1990; he told her

that she was not suffering from EMS but from fibromyalgia or

fibrositis.     He    gave     Vaught    information      on   fibromyalgia     and

prescribed Elavil, a tricyclic antidepressant used primarily for

treating that ailment.


                                        - 3 -
     Vaught took Elavil for approximately six months, and her

condition     improved        somewhat.     Her     symptoms,     however,      never

completely disappeared, in spite of her attempts at other curative

measures, such as physical therapy.

     By    the    end    of    1992,     Vaught’s     condition     worsened;    she

experienced      dizziness,      fainting        spells,   and    respiratory    and

gastrointestinal problems.          In late 1992 or early 1993, she again

became concerned that she might have EMS.              She contacted her family

physician, Dr. Fields.           And in January 1993, she consulted Dr.

Patton.     That February and March, she underwent muscle and sural

nerve biopsies to rule out EMS. Dr. Fields then recommended Vaught

to Dr. Burns; in April 1993, he diagnosed EMS on the basis of

Vaught’s biopsies, medical records, exams, and blood work.

     Vaught contacted the paralegal with whom she had spoken in

1990 and who had become a practicing attorney in Houston.                    On 28

April 1993, Vaught and her husband filed this action in Texas state

court against Showa Denko K.K. and its American distributors; it

was removed to federal court in February 1994.                     That June, the

Panel on Multidistrict Litigation ordered this action transferred

to the United States District Court for the District of South

Carolina    to    be    joined    with     pending     nationwide     L-tryptophan

litigation being conducted there (MDL No. 865). In September 1995,

this action was conditionally remanded to district court in Texas

for further proceedings.




                                         - 4 -
       Defendants then moved for summary judgment on limitations

grounds.    Following a hearing in January 1996, the district court

granted the motion.

                                         II.

       The Vaughts present three issues.                First, they contend that a

genuine issue of material fact exists as to when their cause of

action accrued.      Next, they seek certification of the following

question to the Texas Supreme Court: “Under the Texas discovery

rule, does a plaintiff’s diligent, but fruitless, inquiry into

whether she has an actionable toxic tort suspend the statute of

limitations running against her claim?”.                   Finally, they maintain

that    Janet   Vaught’s    membership         in   a    putative   nationwide    L-

tryptophan class action tolled the limitations period until class

certification was denied.

       We review a summary judgment de novo, applying the same

standard as the district court. E.g., Bodenheimer v. PPG Indus.,

Inc.,   
5 F.3d 955
,    956   (5th    Cir.       1993).      Such   judgment   is

appropriate where “there is no genuine issue as to any material

fact and the movant is entitled to judgment as a matter of law”.

FED. R. CIV. P. 56(c).     In making this determination, we are to draw

all reasonable     inferences      in    favor      of    the   nonmovant.   E.g.,

Bodenheimer, 5 F.3d at 956
.              And, because this is a diversity

action, we apply Texas substantive law. Erie R.R. Co. v. Tompkins,

304 U.S. 64
(1938).

                                         A.




                                        - 5 -
     In Texas, a personal injury action must be filed “not later

than two years after the day the cause of action accrues.”                TEX.

(CIV. PRAC. & REM.) CODE ANN. § 16.003(a).       Generally, accrual occurs

on the date “the plaintiff first becomes entitled to sue the

defendant based upon a legal wrong attributed to the latter”, even

if the plaintiff is unaware of the injury.             Zidell v. Bird, 
692 S.W.2d 550
, 554 (Tex. Ct. App. 1985).

     The “discovery rule” is an exception to this general rule.

See Moreno v. Sterling Drug, Inc., 
787 S.W.2d 348
, 351 (Tex. 1990).

Under Texas’ discovery rule, the limitations period is tolled until

the plaintiff discovers, or through the exercise of reasonable

diligence should have discovered, the nature of her injury.               See

id.; Willis v. Maverick, 
760 S.W.2d 642
, 644 (Tex. 1988).

     The term “discovered”, however, is quite broad.            In Hoover v.

Gregory, 
835 S.W.2d 668
(Tex. Ct. App. 1992, error denied), the

Texas Court of Appeals explained: “‘Discovery’ ... occurs when a

plaintiff ha[s] knowledge of such facts as would cause a reasonably

prudent person to make an inquiry that would lead to discovery of

the cause of action.”       
Id. at 671.
     Such knowledge is “in the law

equivalent to knowledge of the cause of action for limitation

purposes”.    Bayou Bend Towers Council of Co-Owners v. Manhattan

Constr. Co., 
866 S.W.2d 740
, 747 (Tex. Ct. App. 1993, error

denied).

     In    other   words,   a   cause   of   action   may   accrue   before   a

plaintiff actually learns the “details of the evidence by which to

establish his cause of action”.              
Hoover, 835 S.W.2d at 672-73

                                    - 6 -
(quoting Citizens State Bank v. Shapiro, 
575 S.W.2d 375
, 385 (Tex.

Ct. App. 1978, error refused nre)).         As held in the controlling

case for purposes of this appeal, Bell v. Showa Denko K.K., 
899 S.W.2d 749
, 754 (Tex. Ct. App. 1995, error denied) this is because

the discovery rule “mandates that the plaintiff exercise reasonable

diligence to discover facts of negligence or omission”.

      It is undisputed that Vaught first consumed L-tryptophan from

mid-1987 to 1988, more than two years before this action was filed

in April 1993.     On these facts, the district court concluded that

the limitations period began in 1987, when Vaught first took L-

tryptophan, but that it was tolled until April 1990, when the

discovery period began.        (Defendants do not contest this.)    It was

then that Vaught read the newspaper article; connected her symptoms

with EMS; and contacted the lawyer’s office.          Therefore, she had

two years from that point within which to file suit; she failed to

do so.

      The Vaughts contend that there is a material fact issue on

when the cause of action accrued.       They concede that a diagnosis of

a disease is not a sine qua non to “knowledge” under the discovery

rule but claim that Janet Vaught conducted a diligent (albeit

fruitless) inquiry into whether Defendants’ product was the cause

of her symptoms.        (Along this line, it bears repeating that

Vaught’s inquiry apparently ended in mid-July 1990, when she was

diagnosed with fibromyalgia. This diagnosis was only approximately

three and one-half months after the discovery period began (when

she   read   the   newspaper    article).    And   after   the   July   1990


                                    - 7 -
diagnosis, she continued to have adverse symptoms, despite taking

the prescribed medication for the diagnosis of fibromyalgia for

approximately six months.)

      If Janet Vaught exercised reasonable diligence, the Vaughts

continue, the legal consequence cannot be dismissal of her action.

Therefore, they maintain that the discovery rule should be read to

require “knowledge of sufficient facts that actually connect the

injury and the tortfeasor so as to warrant the filing of a suit by

a reasonable person”.

      Defendants respond that it is knowledge of the injury — not

knowledge    that   the   injury     is   actionable   —   that    triggers    the

discovery period (and the running of limitations).                 Thus, once a

plaintiff learns that she has been harmed and associates that harm

with a potential tortfeasor (such as a product manufacturer), she

has   two   years   to    discover    relevant    evidence;       difficulty   in

obtaining a confirming diagnosis during that interval does not toll

the two-year period.

      In this regard, Defendants contend that the above-referenced

decision by the Texas Court of Appeals in 1995 in Bell v. Showa

Denko K.K. controls. We agree.            Bell is very similar factually to

this action, and squarely addresses the Vaughts’ contention as to

when the discovery period began.

      Bell also took L-tryptophan and allegedly contracted EMS as a

result.     
Bell, 899 S.W.2d at 752
.          Bell had suffered from severe

muscle pains from October 1989 to March 1990. Like Vaught, Bell

read about EMS in a newspaper article in late 1989 or early 1990,


                                      - 8 -

id. at 754,
and suspected that she had EMS based on the fact that

her symptoms corresponded to those reported by EMS victims (muscle

pains and high eosinophil levels in blood).      
Id. at 754-55.
   Bell

consulted with various doctors in July 1990; filled out an “L-

tryptophan Eosinophilia-Myalgia Patient Data Sheet”; was told by

doctors in March and October 1990 that she might have EMS; but did

not receive a positive diagnosis until February 1992.      
Id. at 755.
Bell filed suit in Texas state court in September 1992 against

Showa Denko, K.K. and others.    
Id. at 752.
  The trial court granted

the defendants summary judgment on limitations grounds.      
Id. The Texas
Court of Appeals affirmed, 
id. at 755,
concluding

that Bell had “knowledge” of her injury at some point between March

and July 1990, when she connected (“associated”) her symptoms with

the ingestion of L-tryptophan.    
Id. That knowledge
was sufficient

to trigger the two-year statute; therefore, Bell’s September 1992

filing was too late.   
Id. (As discussed
infra, the court also

rejected the tolling contention advanced here.)

     It is undisputed that, in April 1990, Janet Vaught made a

connection between her physical symptoms, EMS, and the ingestion of

L-tryptophan. That knowledge was sufficient in Bell to trigger the

discovery period; it has the same legal effect here.

     Vaught’s difficulty in obtaining a positive EMS diagnosis does

not distinguish this case from Bell.      As the Bell court explained,

“the question to be determined is not whether a plaintiff has

actual knowledge of the particulars of a cause of action ...;

rather, it is whether the plaintiff has knowledge of facts which


                                 - 9 -
would cause a reasonable person to diligently make inquiry to

determine his or her legal rights.”        
Id. at 754
(emphasis added);

see also 
Hoover, 835 S.W.2d at 671-72
; 
Shapiro, 575 S.W.2d at 385
.

This language presumes that the discovery period begins before a

plaintiff has actionable knowledge — or, as the Vaughts describe

it, knowledge of “sufficient facts that actually connect the injury

and the tortfeasor”.     In sum, there is no exception under Texas law

for those who make a diligent inquiry but fail to obtain a positive

diagnosis.

       We are not blind to the Vaughts’ contention that Bell places

similarly situated plaintiffs in a difficult situation.               They

assert that, if they had filed suit prior to 1993 — when they claim

they could not produce “a single medical witness to confirm [Janet

Vaught’s] suspicion that she had EMS” — they might well have been

subject to sanctions under TEX. R. CIV. P. 13 (the counterpart to

FED. R. CIV. P. 11), which forbids making groundless factual and

legal allegations.     See TEX. R. CIV. P. 13.    Yet the consequence of

waiting until she obtained a positive diagnosis in 1993 was that

her suit was dismissed as time-barred.

       The source of the problem is not the Texas discovery rule; it

may well be the diagnoses of the first four doctors consulted, all

of whom advised Vaught that she did not have EMS.           The discovery

rule   operates   to   trigger   the   statute   of   limitations   once   a

plaintiff has the requisite knowledge, regardless of whether or how

the plaintiff is advised by the medical community. In this regard,

the result commanded by Bell is supported by United States v.


                                  - 10 -
Kubrick, 
444 U.S. 111
(1979), in which the Supreme Court considered

whether an action under the Federal Tort Claims Act for alleged

malpractice in a Veterans Administration hospital had been timely

filed:

                 If [a plaintiff] fails to bring suit
            because he is incompetently or mistakenly told
            that he does not have a case, we discern no
            sound reason for visiting the consequences of
            such error on the defendant by delaying the
            accrual of the claim until the plaintiff is
            otherwise informed or himself determines to
            bring suit, even though more than two years
            have passed from the plaintiff’s discovery of
            the relevant facts about [the] injury.

Id. at 124.
       As a final matter, we note that a statute of limitations can

operate to the detriment of both plaintiffs and defendants.               In

essence, the statute is a compromise; on occasion, it can cause

seemingly unfair results.       The Texas Supreme Court has explained

that the primary purpose of such statutes is “to compel the

exercise of a right of action within a reasonable time that the

opposing party has a fair opportunity to defend while witnesses are

available and the evidence is fresh in their minds.”           
Willis, 760 S.W.2d at 644
; see also Murray v. San Jacinto Agency, Inc., 
800 S.W.2d 826
, 828 (Tex. 1990).          They establish a “point of repose”

and operate to “terminate stale claims”.           
Murray, 800 S.W.2d at 828
.     Nevertheless, Texas’ discovery rule, a judicially created

exception, theoretically permits an action to be filed long after

the    limitations   period   would    otherwise   have   expired,   placing

defendants like Showa Denko at a possible disadvantage in terms of

witnesses and evidence.

                                  - 11 -
      On   the   other    hand,   Texas       has   declined    to   construe   the

discovery rule to toll limitations periods until “a plaintiff

discovers a specific cause of action against a specific defendant”.

See   
Moreno, 760 S.W.2d at 357
    n.9.     That    approach   would

“effectively ‘expand ... to infinity the time period during which

[an action] could be brought’”. 
Id. (quoting Pastierik
v. Duquesne

Light Co., 
526 A.2d 323
, 325 (Pa. 1987)).               Thus, a plaintiff like

Vaught, who may be incorrectly advised, may be precluded from

pursuing her cause of action, even though she took the necessary

investigatory steps mandated by the discovery rule.

                                         B.

      The Vaughts ask us to certify to the Texas Supreme Court the

question addressed above: “Under the Texas discovery rule, does a

plaintiff’s diligent, but fruitless inquiry into whether she has an

actionable toxic tort suspend the statute of limitations running

against her claim?”        Certification to the Texas Supreme Court is

appropriate only if “it appears to the certifying court that there

is no controlling precedent in the decisions of the Supreme Court

of Texas”.    TEX. R. APP. P. 114(a); see TEX. CONST. art. V, § 3-c; see

also Swearingen v. Owens-Corning Fiberglas Corp., 
968 F.2d 559
, 564

(5th Cir. 1992).

      This procedure is not “a panacea for resolution of those

complex or difficult state law questions which have not been

answered by the highest court of the state.”              Transcontinental Gas

Pipeline Corp. v. Transportation Ins. Co., 
958 F.2d 622
, 623 (5th

Cir. 1992).      Thus, even in the absence of decisions by the Texas


                                       - 12 -
Supreme Court or intermediate appellate courts on an issue of state

law, we will not necessarily certify a question.                 See, e.g.,

Swearingen, 968 F.2d at 564
.

     Existing Texas law (especially Bell) adequately addresses the

discovery rule issue.       Accordingly, we decline the certification

request.

                                       C.

     The Vaughts’ final contention is that Janet Vaught’s potential

membership in a putative L-tryptophan federal class action tolled

the limitations period until class certification was denied. On or

before 27 September 1990, three nationwide class actions were filed

in Maryland against various defendants, including Showa Denko, on

behalf of “natural persons who sustained personal injuries as a

result of ingesting ... L-tryptophan”.           Two of the actions were

filed in federal court; one filed in state court was removed to

federal court. Rapoport v. P. Leiner Nutritional Products Corp.

(JH-90-397) (D. Md. — filed in state court 20 Dec. 1989 and removed

to federal court 2 Feb. 1990); Rapoport v. Showa Denko America (JH-

90-518) (D. Md. — filed 13 Feb. 1990); Rapoport v. Showa Denko K.K.

(JH-90-2516) (D. Md. — filed 27 Sept. 1990). All three were

transferred    by   the   Panel   on   Multidistrict   Litigation   to    the

earlier-referenced litigation in South Carolina (MDL No. 865).

Certification was denied in two of the actions in January 1992; the

third action    was   dismissed    in   May   1992   without   reaching   the

certification issue.




                                   - 13 -
     The Vaughts contend that, under the decisions of the Supreme

Court in American Pipe & Constr. Co. v. Utah, 
414 U.S. 538
(1974),

and Crown, Cork & Seal Co. v. Parker, 
462 U.S. 345
(1983), and of

the Texas Court of Appeals in Grant v. Austin Bridge Constr. Co.,

725 S.W.2d 366
(Tex. Ct. App. 1987), Janet Vaught’s membership in

the putative Rapoport classes tolled the limitations from running

against her claim (putative class action tolling).      Thus, even

assuming the limitations period began running on 4 April 1990, when

she read the newspaper article, the period would have been tolled,

at the latest, on 27 September 1990 (176 days later), when the last

Rapoport action was filed; and when class certification was denied

on 3 January 1992, the limitations period would have resumed.

Therefore, the Vaughts would have had until 11 July 1993 (two years

less 176 days equals 554 days) to file suit, making their April

1993 filing timely.1

     1
          In ruling against this contention, the district court
stated initially that Janet Vaught had opted-out of the putative
Rapoport classes by independently pursuing her claim. In response
to the Vaughts’ counsel urging that she had not opted-out — because
she had not filed suit until after denial of class certification —
the district court stated:

          There’s nothing in the facts here that suggest
          that she did not pursue her claim because of
          the pendency of that action.    She consulted
          counsel and doctors and thought she didn’t
          have a claim. Unilateral mistake of fact.

We agree with the district court that the record does not reflect
that Vaught withheld filing suit pending a class certification
ruling. Moreover, Vaught does not claim that she did.      (In any
event,   any  thought   that   Vaught  withheld   filing   pending
certification is belied by the fact that this action was not filed
until April 1993, approximately 16 months after denial of
certification in South Carolina.)


                              - 14 -
     In American Pipe and Crown, Cork & Seal, the Court held that

filing a FED. R. CIV. P. 23 class action tolled limitations for

potential class members pending the certification ruling.   Crown,

Cork & 
Seal, 462 U.S. at 353-54
; American 
Pipe, 414 U.S. at 552-53
.

And, in Grant, after the Texas Court of Appeals determined that

TEX. R. CIV. P. 42 was patterned after Federal Rule 23, the court

relied on American Pipe and Crown, Cork & Seal in holding that a

state class action tolled the limitations period for all potential

class members.   
Grant, 725 S.W.2d at 370
.

     Defendants counter that the American Pipe tolling rule governs

only property damage-type claims, not mass personal injury claims,

for which class certification has historically been disfavored.

See Castano v. American Tobacco Co., 
84 F.3d 734
, 746-47 (5th Cir.

1996) (denying nationwide class certification for proposed class of

nicotine-dependent persons who smoked and purchased cigarettes

manufactured by tobacco companies and of their families).     They

assert that the American Pipe holding was based on the premise that

a class action would provide a defendant with sufficient notice of

the “potential claims of all potential class members”.




     Accordingly, a possible issue might be whether Janet Vaught’s
independent actions (possibly including contacting the law firm and
consulting with doctors) and otherwise not awaiting a class
certification ruling preclude her from receiving shelter under the
putative class action tolling rule advanced here. It appears that
the district court ruled that they do. On the other hand, for our
de novo review, neither side presses the issue.      In any event,
because, as discussed infra, we conclude that the Vaughts’ class
action tolling contention fails, we need not consider this possible
issue.

                              - 15 -
       In any event, Defendants assert primarily that the Texas Court

of Appeals’ decision in Bell also controls this issue because Bell

held that, under American Pipe, class action does not toll state

personal injury claims imputed in federal mass tort.             The Vaughts

maintain, inter alia, that the tolling language in Bell is dicta,

because Bell also held that the class action tolling issue had not

been preserved for appeal.        
Id. at 756-57.
       However, under Texas

law, “[w]hen [the] highest court gives two grounds for a decision,

both of which are carefully developed and supported by authority,

an intermediate court cannot justifiably disregard either of these

grounds as obiter.”       Inn of Hills, Ltd. v. Schulgen & Kaiser, 
723 S.W.2d 299
, 301 (Tex. Ct. App. 1987, error refused nre) (quoting

Reynolds-Penland Co. v. Hexter & Lobello, 
567 S.W.2d 237
, 243 (Tex.

Civ.   App.   1978)     (Guittard,   J.,   dissenting)).        Although   the

foregoing authority refers to alternative holdings by the Texas

Supreme Court, this alternative-holdings rule must, of necessity,

apply to decisions by Texas’ intermediate appellate courts as well.

In Bell, the procedural and substantive bases for the tolling

rulings are independently developed and supported and do not depend

on hypothetical facts; neither can be disregarded as dicta.

       We conclude that, pursuant to Bell, the Rapoport actions did

not toll the limitations period for the Vaughts.           We arrive at this

conclusion, however, in a somewhat circuitous manner.             As before,

we begin with Bell.

       Bell contended that, under Grant and the American Pipe line of

cases,    a   federal    class   action    filed   in    New   Mexico   tolled


                                     - 16 -
limitations on her claim until class certification was denied.

Bell, 899 S.W.2d at 756-57
.          In addressing this issue on the

merits, the Bell court concluded first that the American Pipe line

of cases did not directly control, because they involved the

tolling   effect   of   putative   federal    class   actions   on   federal

statutes of limitations.      
Id. at 757.
    Whether a state statute of

limitations would be tolled by a federal class action, the court

explained, was a question of state law.         The Bell court construed

Grant to apply only to the tolling effect of a state class action

on state claims.        
Id. at 757-58.
     In addition, the Bell court

concluded, the American Pipe tolling rule was meant to apply only

where a class action gives a defendant notice of the “type and

potential number of the claims against it” — for example, where a

“discernible group of people claim[ ] injury to certain property”.

Id. at 758.
  The court explained:

                For us to hold that the filing of a mass
           personal injury suit, in a federal court, in
           another state, with the variety of claims
           necessarily involved in such a case, entitled
           a plaintiff to a tolling of the limitations
           period such as in American Pipe, would be an
           extension not warranted by [Grant] and we
           refuse to do so.

Id. Hence, the
federal class action involved (New Mexico) did not

toll the limitations period on Bell’s state claims pending a

certification ruling.

      To circumvent this holding in Bell, the Vaughts cite Supreme

Court and Fifth Circuit precedent, see Board of Regents v. Tomanio,

446 U.S. 478
(1980); Johnson v. Railway Express Agency, 
421 U.S. 454
(1975); F.D.I.C. v. Dawson, 
4 F.3d 1303
(5th Cir. 1993), cert.

                                   - 17 -
denied, 
114 S. Ct. 2673
(1994), contending that a federal court may

disregard a state tolling rule if it is inconsistent with a federal

policy — in this case, the tolling effect of a putative federal

class action. Federal Rule 23 seeks to avoid a multiplicity of

actions in various courts and the “filing of repetitious papers and

motions”.   American 
Pipe, 414 U.S. at 550
.          Therefore, the Vaughts

assert that, if the limitations period is not tolled during the

pendency of a Rule 23 class certification ruling, potential class

members will have to adopt a “belt-and-suspenders attitude”: each

will have to file suit individually to preserve her claim in the

event that certification is later denied.

     None of the cited cases, however, support this contention.

Johnson and Tomanio involved federal causes of action under 42

U.S.C. §§ 1981 and 1983.      
Tomanio, 446 U.S. at 482
; 
Johnson, 421 U.S. at 456
. Because federal law does not specifically provide the

limitations   period,    state    law   is    “borrowed”     to   provide   it.

Johnson, 421 U.S. at 462
.        In fact, Johnson and Tomanio hold that,

in addition to borrowing a state’s statute of limitations for a §

1981 or § 1983 action, a federal court should also borrow the

corresponding tolling rules for such actions. 
Tomanio, 446 U.S. at 485-86
; 
Johnson, 421 U.S. at 463-64
. Of course, any borrowed state

law cannot be “inconsistent with the constitution and laws of the

United States”.   42 U.S.C. § 1988(a); see 
Tomanio, 446 U.S. at 485
-

86; 
Johnson, 421 U.S. at 465
.

     Dawson   involved    a      federal     claim   under    the   Financial

Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA)


                                   - 18 -
brought by the FDIC as receiver.            
Dawson, 4 F.3d at 1305-07
.

Although FIRREA provides a limitations period for such claims, it

cannot revive stale state law claims; thus, a court must determine

whether a claim would be barred by a state statute of limitations.

Id. at 1306-07.
     In Dawson, that inquiry included determining

whether   the   doctrine   of   adverse    domination   tolled   the   state

limitations period and whether, for that question, federal or state

law controlled.    
Id. at 1308.
  Citing Johnson, our court held that,

because we were “borrowing” a state statute of limitations, state

tolling principles would be the “‘primary guide’”, 
id. at 1308-09
(quoting 
Johnson, 421 U.S. at 465
), and could be disregarded only

if “inconsistent with federal policy”.         Id. (citing 
Tomanio, 446 U.S. at 485-86
).

     Needless to say, these cases are inapposite to this case; they

deal with borrowing state law to fill gaps left by Congress for

federal causes of action.       In a § 1981, § 1983, or FIRREA action,

federal law still supplies the rules of decision.         It makes sense,

therefore, that under 42 U.S.C. § 1988 and the Johnson and Tomanio

cases, a federal court may disregard a state tolling rule on

certain occasions.

     By contrast, diversity actions, such as the one at hand for

product liability, involve state causes of action, where state law,

of course, provides the rules of decision, even in federal court.

In fact, the Supreme Court has stated that generally, for diversity

actions, a federal court should apply not only state statutes of

limitation but also any accompanying tolling rules. Walker v. Armco


                                  - 19 -
Steel Co., 
446 U.S. 740
, 750-53 (1980) (rendered only two weeks

after Tomanio).

       The case providing the strongest support for the Vaughts

appears to be Byrd v. Blue Ridge Rural Elec. Coop., 
356 U.S. 525
(1958).      At issue was whether, in a diversity action, the judge or

the jury decided, under a state workers’ compensation act, the

question of employer immunity.                
Id. at 533-34.
       The applicable

state rule, pursuant to case law, provided that the judge decided

the question, id.; however, in federal court civil actions, the

jury traditionally, of course, resolved disputed questions of fact.

Id. at 534.
        Therefore, the Supreme Court held that the federal

court should not follow the state rule.               
Id. at 538-40.
       The Court first explained that the state rule was not “an

integral part of the special relationship created by the [workers’

compensation]        statute”,    but   was    “merely   a   form      and   mode   of

enforcing the immunity ... and not a rule intended to be bound up

with the definition of the rights and obligations of the parties”.

Id. at 536.
        In addition, the federal policy of having juries

decide disputed questions of fact was an “essential characteristic”

of    the    federal    system,    strongly       influenced    by     the   Seventh

Amendment.      
Id. at 537-38.
     For the Court, the importance of this

federal policy outweighed the state rule.

       The Supreme Court’s subsequent decision in Hanna v. Plumer,

380 U.S. 460
   (1965)   (holding     that    federal     court    sitting     in

diversity should apply FED. R. CIV. P. 4, rather than conflicting




                                        - 20 -
state rule, because federal rule was consistent with Rules Enabling

Act), does not prevent us from applying Byrd to the facts at hand.

     Hanna concerned a federal rule of civil procedure promulgated

pursuant to the Rules Enabling Act, 28 U.S.C. § 2072, that was in

“direct collision” with state law.   
Hanna, 380 U.S. at 461-64
.    In

the case at hand, however, there is no federal rule of civil

procedure that is in direct conflict with state law.    Although the

American Pipe tolling rule is intended to preserve the policies

underlying Rule 23, neither Rule 23 nor any other rule expressly

mandates tolling limitations periods.       See FED. R. CIV. P. 23.

Restated, we are not “narrowly construing” the federal rules to

avoid a “direct collision” with state law; rather, we are applying

the rules’ plain meaning.    See 
Walker, 446 U.S. at 750
n.9.    And,

in those cases where “there is no conflict between the Federal Rule

and ... state law”, Hanna does not apply.    
Id. at 752.
     Tolling is essentially a judge-made practice, see Crown, Cork

& 
Seal, 462 U.S. at 350-54
; American 
Pipe, 414 U.S. at 552-59
, and

nothing in Hanna detracts from a Byrd-type analysis of a conflict

between a judge-made federal practice and a state rule.       Neither

Hanna nor any other Supreme Court case has explicitly overruled

Byrd or suggested that it no longer retains vitality.      (Walker, in

which the Supreme Court applied a state tolling rule in a diversity

case, involved a claimed conflict with FED. R. CIV. P. 3, not a

federal practice, as here.    See 
Walker, 446 U.S. at 741-43
.)

     In addition, to the extent our court has previously questioned

the vitality of Byrd in the light of Hanna, it has done so by


                               - 21 -
suggesting that Hanna expanded the power of federal courts to

disregard state law in diversity cases:

               We   think,  in   the   light   of  later
          authority,   that   Byrd   gave    too  little
          recognition to the federal forum-qua-forum
          interests.... Hanna gives us good reason to
          hold that federal courts have inherent powers
          under Article III to displace state laws on
          matters involving their basic competence as
          courts.

See In re Air Crash Disaster Near New Orleans, La. on July 9, 1982,

821 F.2d 1147
, 1159 (5th Cir. 1987), cert. granted and judgment

vacated on other grounds, Pan American World Airways v. Lopez, 
490 U.S. 1032
(1989), on remand, 
883 F.2d 17
(5th Cir. 1989).

     And, the Tenth Circuit has stated that, under Byrd, a federal

court sitting in diversity may disregard a state tolling rule.

Cook v. G.D. Searle & Co., 
759 F.2d 800
, 803 (10th Cir. 1985) (“A

state tolling rule ... will generally govern in diversity actions

absent a direct conflict between a state rule and an overriding

federal rule or affirmative countervailing federal consideration”.)

(citing Byrd).   Under Byrd, therefore, the Texas non-tolling rule

(stated in Bell) could arguably be displaced because it conflicts

with the well-established federal tolling practice promulgated in

American Pipe and Crown, Cork & Seal.

     Without doubt, there is a strong federal policy favoring the

tolling of limitations periods as to all potential members of a

Rule 23 class action. The Supreme Court explained in American Pipe

that a contrary holding would

          frustrate the principal function of a class
          suit, because then the sole means by which
          members of the class could assure their

                                - 22 -
              participation in the judgment if notice of the
              class suit did not reach them until after the
              running of the limitation period would be to
              file earlier individual motions to join or
              intervene   as   parties   —   precisely   the
              multiplicity of activity which Rule 23 was
              designed to avoid....

American 
Pipe, 414 U.S. at 551
.

       In Crown, Cork & Seal, the Court explained that the American

Pipe   rule    applied   to   all   potential    class       members,    not    just

intervenors.      Crown, Cork & 
Seal, 462 U.S. at 353-54
.               It went on

to state that, without tolling, its holding in Eisen v. Carlisle &

Jacquelin, 
417 U.S. 156
(1974), requiring individual notice to

absent class members, would make no sense.             Crown, Cork & 
Seal, 462 U.S. at 351
.     Notice is intended to enable class members to opt-out

and pursue their claims independently.                 
Id. If there
were no

tolling rule, notice would be irrelevant, because the limitations

period for absent class members would most likely have expired,

making the right to pursue a claim separately utterly meaningless.

Id. at 351-52.
       In the light of Bell, we understand Texas’ tolling rule to

operate as follows: A state (Texas) class action that raises

property damage-type claims tolls a Texas statute of limitations

pending    a    certification   ruling.         And,    consistent       with    our

understanding of this Texas tolling rule, it is unclear whether,

under this rule, a federal class action filed in Texas or in any




                                    - 23 -
other State      would      ever    toll   a   Texas    statute   of   limitations,

regardless of the type of claims raised.2

       In any event, this Texas rule clearly conflicts with the well-

established federal practice on class action tolling. We conclude,

however, that, for this case, the federal interest in that practice

does not trump the Texas tolling rule.                  Unlike the situation in

Byrd or Hanna, neither the federal constitution nor federal law

would be displaced.           On the other hand, a tolling rule is an

“integral part” of a statute of limitations.                See 
Byrd, 356 U.S. at 536
.       Therefore, Texas’ interest in its tolling rule has quite

considerable depth.           This is because its rule is a means of

enforcing its statute of limitations, a matter of considerable

importance to Texas, one reflecting a deliberate policy choice by

its legislature.

       In    short,    we    have    come      full-circle.       Bell   controls.

Consequently, summary judgment was proper.

                                           III.

       Because   the     Vaughts’     action      is   time-barred,    the   summary

judgment awarded Defendants is

                                                            AFFIRMED.




       2
          Pre-Bell, our court noted that Texas’ tolling rule was
the same as the federal rule under American Pipe and Crown, Cork &
Seal. See National Ass’n of Gov’t Employees v. City Pub. Serv. Bd.
of San Antonio, Tex., 
40 F.3d 698
, 715 n.25 (5th Cir. 1994) (citing
Grant). Post-Bell, that observation retains little vitality.

                                       - 24 -

Source:  CourtListener

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer