Late last year, we explained the tricky statute of limitations issues that can arise regarding “cross-jurisdictional class action tolling.” The issue arose in some of the many Pella window cases pending before Judge Norton in the District of South Carolina. Those cases have now raised several more interesting timeliness issues—when plaintiffs can consolidate pending cases to avoid dismissal on timeliness grounds, and when a failure to move for certification waives class claims.
In October of last year, the Judicial Panel on Multidistrict Litigation (JPML) transferred the Saltzman/Eubank case against Pella to Judge Norton. The Saltzman/Eubank case was originally filed in Illinois in 2006. The other Pella windows cases before Judge Norton were filed much more recently, and many of the plaintiffs face the kind of statute of limitations issues we discussed in our earlier post.
After the Saltzman/Eubank case was transferred to South Carolina, lead counsel in the multi-district litigation (MDL) developed a strategy to use the 2006 complaint in Saltzman/Eubank to avoid the statute of limitations issues in the later-filed cases. Plaintiffs argued that, in effect, the later cases were really just a continuation of the Saltzman/Eubank litigation. They attempted to consolidate with the later-filed cases, and they moved to file an amended complaint that would become the operative complaint for all of the cases in the MDL.
Plaintiffs’ argument was that the named plaintiffs in the later-filed cases were unnamed members of the class in Saltzman/Eubank. Thus, if they could consolidate all of the cases and file an amended complaint, they could argue that the later-filed claims related back to the original 2006 complaint. This would save claims in the later cases from being dismissed as untimely.
In his order, Judge Norton began his analysis with the motion to consolidate. He held that, even if he granted the motion for consolidation, it would not produce the result the plaintiffs wanted. Because consolidation under Rule 42(a) does not merge all the suits into a single action, it would not let plaintiffs file a complaint in the later-filed cases that would relate back to the 2006 complaint in Saltzman/Eubank. The Court also noted that it was unnecessary to consolidate the cases because they were already consolidated when they were transferred to the Court by the JPML.
Next, the Court turned to the motion to file an amended complaint. The Plaintiffs hoped to persuade the Court that all of the MDL plaintiffs were unnamed class members in the Saltzman/Eubank, thereby avoiding timeliness issues. The Court held that the plaintiffs in the later-filed actions were not unnamed class members in Saltzman/Eubank. Although the later-filed claims were part of the original complaint in Saltzman/Eubank, those claims were never certified. Instead, they were apparently abandoned during settlement negotiations in 2008. Citing authority from the 11th Circuit and other federal district courts, Judge Norton held that the failure to move for certification on these claims in Saltzman/Eubank resulted in a waiver. The Court also noted that “[t]o accept plaintiffs’ argument would essentially place Pella in legal limbo for five years, leaving it to speculate whether abandoned claims in a settled case would eventually be resurrected.”
The Fourth Circuit may have the opportunity to address some of these issues. This April, Judge Norton entered an order in Alexander v. Pella Corp, No. 2:14-mn-00001, 2:14-cv-540 (D.S.C. April 21, 2015). As in the case discussed in our earlier post, the Court rejected the argument that their claims were tolled during the pendency of Saltzman/Eubank. The plaintiffs moved the court to reconsider, arguing that their claims related back to the original 2006 complaint, as outlined above. The Court denied the motion to reconsider, and Plaintiffs have now filed an appeal to the Fourth Circuit.