Statutes of Limitation

“Statute of Limitations in the Context of Prescription Drug Addiction: Case Dismissed in Northern District of New York.” That’s the very apt title of yet another informative and fun to read article from the authors at Drug & Device Law; this one dated August 21, 2018.  As the article explains in detail, new issues are arising in opioid cases. The  case involved claims of addiction and subsequent events, including the suicide of the addict.

Judging by oral argument questions at SCOTUS, one legal analyst suggests the American Pipe tolling doctrine seems likely to live on to toll statutes of limitation, as opposed to statutes of repose. See Ronald Mann, Argument analysis: Justices dubious about limiting precedent that tolls statutes of limitations to permit “stacked” class actions, SCOTUSblog (Mar. 27, 2018, 10:52 AM), http://www.scotusblog.com/2018/03/argument-analysis-justices-dubious-limiting-precedent-tolls-statutes-limitations-permit-stacked-class-actions/

Late in June, SCOTUS knocked out “American Pipe” equitable tolling in a securities case, as explained in a June 27,  2017 post at Faegre Baker Daniels. This is a typical 5-4 Roberts court “bright line” ruling based on the literal language of the statute, with the usual justices on the usual side of the ruling. The dissent pointed out the usual factors that rationalized tolling.

The outcome also illustrates a typical “be careful what you wish for” situation. For one company, a win. For others, maybe not. Expect more opt out suits by more plaintiffs.

The American Pipe statute of limitation tolling doctrine is on its way back up to SCOTUS, as described in a January 15, 2017 article at D&O Diary.   American Pipe just keeps on going and going and going ….. Back in the late 1990s, I was the lead trial lawyer for a class action filed by large US companies seeking refunds of illegal taxes. The class action arose after my Katten Muchin partners had helped to take down the unconstitutional tax. The cases raised various issues regarding application of the American Pipe doctrine. More recently, in 2011, I mentioned the American Pipe doctrine in the context of barking about how poorly our legislatures and courts deal with mass torts. It will be interesting to see where the doctrine is taken in 2017.

The intersections between law and science continue to increase as more issues turn on when and how injury is defined and the light science can (or can not) shed on the questions. The point is illustrated by the latest ruling in the NHL concussion litigation (online here). There, the court rejected some reasoning from football cases, and denied a motion to dismiss. At 9-10, the court explained:

“The NHL originally filed two motions to dismiss, based on two distinct grounds. First, the NHL filed a Motion to Dismiss Master Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b), seeking dismissal of Plaintiffs’ claims as time-barred. (See Mem. Opinion and Order dated Mar. 25, 2015 [Doc. No. 126], at 8.). The Court denied that motion because it could not determine, from the face of the Master Complaint, when Plaintiffs’ causes of action accrued and, therefore, whether those claims are barred by the applicable statute of limitations. (See id. at 13, 33.) In particular, the Court explained that when the alleged injuries (e.g., “an increased risk of developing serious latent neurodegenerative disorders and diseases” and “latent or manifest neuro-degenerative disorders and diseases”) “occurred” or “resulted,” and when Plaintiffs discovered or should have discovered the link between the type of injuries they suffered and the increased risk of developing neurodegenerative disorders, are matters that are proper subjects of discovery. (Id. at 13–14.)4  Only after additional discovery is completed can it be determined within which of (at least) four potential categories each Plaintiff-retiree belongs: (1) retirees whose cause of action arose while they were active players, and who filed a lawsuit as retired players within the statute of limitations; (2) retirees whose cause of action arose while they were active players, and who filed a lawsuit as retired players outside of the statute of limitations; (3) retirees whose cause of action arose after they retired, and who filed a lawsuit within the statute of limitations; and (4) retirees whose cause of action arose after they retired, but who filed a lawsuit outside of the applicable statute of limitations.

As expected, outgoing Governor Quinn of Illinois has signed a bill ending Illinois’ 10 year statute of repose for “premises” asbestos claims. The back story is here, and is part of a larger story of changes in Illinois law relevant to trying mass tort lawsuits in Illinois. Another key change is that Illinois will now use six person juries.

Some on the defense side will complain bitterly about the demise of the statute of repose. Others will say the change may be good for “peripheral” defendants because the ability of plaintiff lawyers to target some owners of some big sites may (repeat, may) reduce the demands to “peripheral defendants”  when plaintiff lawyers are trying to recover money for persons who are dying of lung cancers and mesotheliomas. Others will argue that demands and payments will not go down to anyone, and instead the overall plaintiff’s recovery will increase. The plaintiff’s bar will say statutes of repose were never fair given the realities of latent disease.

Ultimately, it will be tough to discern the truth – in public. Why? Because there is virtually no transparency as to asbestos settlements; all sides usually seek to keep the numbers “private.” That lack of transparency will make it hard for defendants to prevail when they file inevitable challenges to the law. After all, after decades of statutes of repose, the insurance industry should have and in fact does have vast amounts of actual settlement amount data that could be parsed to show the actual financial effect of statutes of repose. But the full set of data will never see the light of day, in my opinion.

Once again, it bears repeating: ” Be careful what you wish for.” Taking extreme positions in the short term can have long term downsides, and that applies for all persons who are repeat players in mass tort litigation. In this instance, defendants and insurers have lost a statute of repose in a state that hosts 30-40% of all mesothelioma claiming.

The yin and yang of litigation creates interesting alternatoives. Today, we hear some on the defense side complain bitterly that “meritless” lawsuits are awful and that more investigation should be required before any suit is filed. Consider, for example, any med mal statute that requires  a series of pre-suit steps. On the flip side, I was struck by Steve McConnell’s  July 9, 2014 post at Drug and Device blog. There, he (reviewed movies – worth reading by itself) endorsed a court’s view that product liability statutes of limitation should begin to run the day a plaintiff knows something adverse happened (in this case, a uterus was pierced by an IUD). According to Steve:

“The statute of limitations starts running from accrual, which is 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.”  The limitations period is tolled until the plaintiff discovers, or through the exercise of reasonable diligence should have discovered, the nature of her injury.  The discovery rule applies only where the nature of the injury is inherently undiscoverable.  Here is what is important about Truitt: the court avoids the epistemological quagmire into which too many courts sink, and makes clear that accrual does not await the plaintiff’s discovery of “the legal theory for holding a defendant liable for the action to accrue.”  Awareness of injury is enough and starts the clock.”   
The rule argued for by Steve of course offers multiple benefits to the defense side –  greater simplicity, less to litigate and starts the statute earlier, thereby probably barring more claims. But, on the flip side, it means lawyers need to bring claims before the body of evidence is more fully developed as to the merit of the claims. Thus, the yin and yang of litigation.