Class actions; Tolling under American Pipe & Constr Co v Utah; Hicks v Commissioner of Soc Sec; Martin v Commissioner of Soc Sec (ED KY); Hughes v. Commissioner of Soc Sec (ED KY); Whether the administrative denial of class certification terminated tolling; Effect of outright dismissal of an uncertified class action; Statute of limitations (SOL); Social Security Administration (SSA)

The court reversed the dismissal of two of the cases in this consolidated appeal (Potter and Adams), holding that the administrative denial of class certification in Hughes did not terminate American Pipe tolling, so those actions were timely. But it held that because the uncertified class action in Martin was dismissed, American Pipe tolling ceased, and the class members’ individual SOL clocks, including plaintiff-Messer’s, began running. Plaintiffs were successful Social Security disability benefit applicants who were represented in those proceedings by an attorney involved in a fraud scheme. Once the scheme was discovered, the SSA redetermined his clients’ eligibility. Two class actions filed challenging the determination procedures were involved here. Martin was dismissed and a class was never certified because the named plaintiffs failed to exhaust their administrative remedies. In Hughes, a stay was granted pending resolution of Hicks, and the motion for class certification was denied “without prejudice” in order to clear the docket. The issues on appeal involved the timeliness of plaintiffs’ actions and tolling under American Pipe, which provides that “filing a class action pauses the deadlines for members to file related individual actions.” The court considered whether the administrative denial for purposes of docket management in Hughes terminated equitable tolling, and held that it had not. “There was no finding that the proposed class lacked numerosity or commonality, or that the class representatives lacked typicality or adequacy.” The judge’s order in Hughes was “a case management tool meant only to clear his docket ahead of a long stay. Thus, the reasonable reliance interests of the putative Hughes class members” favored applying American Pipe tolling. As a result, Potter and Adams filed their claims within the SOL. But Messer had to “be able to claim an additional period of American Pipe tolling from the Martin appeal.” Consistent with the courts of appeal that have considered the issue, the court held that “once an uncertified class action is dismissed, American Pipe tolling ceases, and the class members’ individual” SOL clocks start running. This meant “that the pendency of the Martin appeal did not suspend Messer’s time to file an individual action” and his action was untimely. The court reversed in Potter and Adams, but affirmed in Messer.