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The United States Supreme Court Issues Major Decision on Tolling of Statute of Limitations in Employment Cases Under Supplemental Jurisdiction

partnership-2750197__340-300x200The United States Supreme Court issued a major decision on tolling the statute of limitations on state law claims while the case is in federal court which has significant impact on New Jersey employment litigation.  In the case of Artis v. District of Columbia, the Supreme Court answered a major procedural question regarding the interplay of federal and state claims being heard together in federal district court and state statutes of limitations.  While the case involved an employment case in District of Columbia, it would be equally applicable to cases brought under New Jersey employment law.

 

Background

Stephanie Artis worked as a health inspector for the city government of the District of Columbia.  She was fired.  Thereafter, she filed suit in the United States District Court for the District of Columbia. She alleged a federal claim under Title VII of the Civil Rights Act of 1964 (known as “Title VII”).  She also sued under District of Columbia law for whistleblower retaliations, false claims and gender discrimination.

 

Supplemental Jurisdiction in Cases under State and Federal Law in Federal District Court  

The federal court asserted “supplemental jurisdiction” over the District of Columbia law claims as well as the federal claim.  Eventually the federal district judge dismissed the Title VII claim.  Since this was the only federal claim, the judge declined to further exercise federal jurisdiction over the case.  The judge ruled that there would be no prejudice to Artis because the federal law governing supplemental jurisdiction provides that a state (or D.C.) law claim in federal court under supplemental jurisdiction “shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.”

 

Tolling The Limitation Periods in Supplemental Jurisdiction Cases: “Grace Period” Versus “Stopping the Clock”

59 days later Artis re-filed her state law claims in the District of Columbia Superior Court.  The Superior Court dismissed Artis’s claims as time-barred.  When the appeal finally reached the Supreme Court, Justice Roberts explained the problem facing Artis and the courts.  “When Artis first asserted her state-law claims in the District Court, nearly two years remained on the applicable three-year statute of limitations. But two and a half years passed before the federal court relinquished jurisdiction. Unless [the Federal supplemental jurisdiction statute] paused the limitations clock during that time, Artis would have had only 30 days to refile.”  Justice Roberts explained the two competing views on tolling statutes of limitation were the “grace period” approach, where if the statute of limitation period passed during the federal litigation, the plaintiff (the person suing) would have only a 30 day grace period within which to refile.  The other view was the “stop the clock” approach, where the plaintiff would still have the same time left on the state statute of limitations as on the day she filed in federal court.  In this case, that difference was the heart of the matter.  Under a grace period approach Artis’s suit would be dismissed; under the stop the clock approach, Artis’s suit was timely filed and could continue.

 

The Supreme Court Comes Down Squarely in Favor of the “Stop the Clock” Approach

Justice Roberts and the majority of the justices adopted the stop the clock approach, and Artis’s suit was therefore timely and could continue.  Roberts explained that the word “toll” means that the clock on the limitations period would be tolled, or stop ticking, once the case is filed in federal court.  It would not restart until 30 days after the case was dismissed in federal court.  To read it otherwise, Justice Roberts explained, would mean that the rule only took effect after dismissal, and the clock continued to run while the case was pending in federal court.  However, the statute requires that the case be tolled while the case is “pending” in federal court, and so must therefore begin when the case  is filed.

Justice Roberts explained that since the plaintiff would have had to have filed suit in a federal court case she would clearly have been pursuing her rights in a timely fashion – the Court’s interpretation was not rewarding delay.  It  would be unjust to deprive someone who was pursuing her rights of access to the court.

Justice Gorsch wrote a dissent, which Justices Kennedy, Thomas and Alito joined.

 

The Takeaway

Undoubtedly this is the just result.  It would be wrong to penalize a fired employee by barring her from the courthouse when she had pursued her claims within the statute of limitations.  The courts are one of the three co-equal branches of our government, and their doors must be open to all deserving litigants.

However, had Artis’s employment attorneys been more cautious, they could have saved years of appealing, and avoided the risk that the dismissal would be upheld.  Statutes of limitation can permanently bar a claim.  While the Supreme Court reached a just result, each case rests on its unique facts.  It is never wise to assume that a procedural rule may give you more time to file.  The best course is always to err on the side of caution.  Suits should always be filed as soon as possible when the limitation period is in doubt.

 

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Our employment lawyers have significant experience in representing both employees and employers in state and federal court.  Call (973) 890-0004 or email us to set up a consultation.  We can help.