The Sixth Circuit Expands American Pipe Tolling

On July 7, the Sixth Circuit decided Phipps v. Wal-Mart Stores, Inc., No. 13-6194, 2015 WL 4079441 (6th Cir. July 7, 2015), an interlocutory appeal in one of the regional progeny of the U.S. Supreme Court's famous decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011). Dukes and Phipps both involved allegations of "gender discrimination in pay and promotions," though the Phipps plaintiffs allege that the discrimination stems from "regional Wal-Mart management policies and decisions" rather than national policies. See Phipps, 2015 WL 4079441, at *1 (emphasis added). That distinction proved critical for the thousands of women who did not pursue individual claims following the Dukes decision, which reversed an order certifying a nationwide class of female employees.

Phipps examined the scope of the American Pipe tolling doctrine. The basic rule of American Pipe is that the statutes of limitations for absent class members' individual claims are tolled while the putative class action makes its way to a Rule 23 determination. See American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974); Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 346-47 (1983). Phipps examined the extent to which American Pipe also tolled otherwise time-barred class claims. At base, Phipps appears to permit follow-on or "stacked" class actions when the new class is, in effect, a sub-class of the prior class—even when the Supreme Court has famously decertified the prior class for want of Rule 23(a) commonality.

In Andrews v. Orr, 851 F.2d 146 (6th Cir. 1988), the Sixth Circuit recognized that its sister circuits were "in unanimous agreement that the pendency of a previously filed class action does not toll the limitations period for additional class actions by putative members of the original asserted class." Id. at 149. The Phipps court, however, read Andrews in light of an intervening decision that applied American Pipe to save class claims on the grounds that the court in the prior class action had dismissed the case before considering class certification. See Phipps at *7-8 (discussing In re Vertrue Inc. Mktg. & Sales Litig., 719 F.3d 474, 478-80 (6th Cir. 2013)). Further, the prior court must have "affirmatively denied" class certification for Andrews to bar the follow-on class claims. Id. at *8 (quoting Vertrue, 719 F.3d at 480 n.2).

On that basis, the court found that the putative Rule 23(b)(3) class's claims survived. The only Dukes class before the Supreme...