Vaught,et al v. Showa Denko K K,etal ( 1997 )

REVISED
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 96-20200
_____________________
JANET L. VAUGHT et al.,
Plaintiffs-Appellants,
versus
SHOWA DENKO K.K. et al.,
Defendants-Appellees.
_________________________________________________________________
Appeals from the United States District Court
for the Southern District of Texas
_________________________________________________________________
March 10, 1997
Before HIGGINBOTHAM, SMITH, and BARKSDALE, Circuit Judges.
RHESA HAWKINS BARKSDALE, Circuit Judge:
For this diversity action, the key issues at hand are when the
limitations period began running under Texas law for the Vaughts’
cause of action arising out of Janet L. Vaught’s use of L-
tryptophan, a nutritional supplement, and whether her membership in
a putative federal class action in another State tolled the Texas
limitations period until class certification was denied.
Asserting, inter alia, that a diligent, but fruitless, inquiry was
made as to whether the Vaughts had a cause of action, the Vaughts
challenge the summary judgment granted Defendants on limitations
grounds. We AFFIRM.
I.
In August 1987, while hospitalized for injuries received in an
automobile accident, Janet Vaught (Vaught) was prescribed L-
tryptophan, an over-the-counter nutritional supplement. She had
never taken this product. After her hospitalization, however, she
continued to take L-tryptophan for several months pursuant to
prescription purchases. In late 1987 or early 1988, she began to
experience various unexplained physical symptoms: fatigue, swollen
neck glands, sore throats, body aches, burning sensations, tingling
on her legs, and muscle and joint pain. She stopped taking L-
tryptophan in December 1988, when she learned that she was
pregnant.
On 4 April 1990, Vaught read a newspaper article about an
action filed by a Houston, Texas, lawyer on behalf of a woman who
allegedly contracted eosinophilia myalgia syndrome (EMS) from L-
tryptophan. EMS is a multisystemic disorder characterized by severe
muscle and joint pain, swelling of the arms and legs, skin rash,
fever, and sometimes neuropathy, resulting in paralysis and death.
In the fall of 1989, the Food and Drug Administration (FDA)
established that over 280 cases of EMS were connected to the
ingestion of L-tryptophan, a “virtually unequivocal”
epidemiological link. As a result, the FDA issued a nationwide,
mandatory recall of L-tryptophan in late November 1989.
Vaught noticed that she suffered some of the same symptoms
that the newspaper article described as indicative of EMS, such as
fatigue, stiffness, and muscle and joint pain. She contacted a
paralegal (now the Vaughts’ lawyer) in the Houston lawyer’s office,
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to obtain information about EMS, although Vaught contends that she
did not think she had EMS at that time. Her contact with that law
firm led her to contact two doctors conducting an EMS study at
Baylor University Medical School, Drs. Harati and McKinley.
Dr. McKinley sent her an “L-tryptophan Eosinophilia-Myalgia
Patient Data Sheet”. When Vaught began filling out the
questionnaire on 18 April 1990, she thought she might have EMS, so
she called the Baylor doctors for their opinion. Vaught spoke with
each of them at the end of April.
Also in April 1990, after reading the newspaper article,
Vaught contacted Dr. Keichian, who had treated her for her
automobile accident injuries, and told him that she had taken L-
tryptophan. Dr. Keichian ordered a blood test, and on 25 April
told Vaught that her eosinophil levels were normal and that she did
not have EMS.
That June, Vaught arranged to have an examination done by one
of the Baylor doctors, Dr. Harati. She brought her medical records
and the completed Patient Data Sheet to the examination. Once
again, she was advised that she had normal eosinophil levels in her
blood and did not have EMS. Dr. Harati referred Vaught to Dr.
Croock, a Baylor University rheumatologist, for further evaluation.
Vaught was examined by Dr. Croock on 13 July 1990; he told her
that she was not suffering from EMS but from fibromyalgia or
fibrositis. He gave Vaught information on fibromyalgia and
prescribed Elavil, a tricyclic antidepressant used primarily for
treating that ailment.
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Vaught took Elavil for approximately six months, and her
condition improved somewhat. Her symptoms, however, never
completely disappeared, in spite of her attempts at other curative
measures, such as physical therapy.
By the end of 1992, Vaught’s condition worsened; she
experienced dizziness, fainting spells, and respiratory and
gastrointestinal problems. In late 1992 or early 1993, she again
became concerned that she might have EMS. She contacted her family
physician, Dr. Fields. And in January 1993, she consulted Dr.
Patton. That February and March, she underwent muscle and sural
nerve biopsies to rule out EMS. Dr. Fields then recommended Vaught
to Dr. Burns; in April 1993, he diagnosed EMS on the basis of
Vaught’s biopsies, medical records, exams, and blood work.
Vaught contacted the paralegal with whom she had spoken in
1990 and who had become a practicing attorney in Houston. On 28
April 1993, Vaught and her husband filed this action in Texas state
court against Showa Denko K.K. and its American distributors; it
was removed to federal court in February 1994. That June, the
Panel on Multidistrict Litigation ordered this action transferred
to the United States District Court for the District of South
Carolina to be joined with pending nationwide L-tryptophan
litigation being conducted there (MDL No. 865). In September 1995,
this action was conditionally remanded to district court in Texas
for further proceedings.
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Defendants then moved for summary judgment on limitations
grounds. Following a hearing in January 1996, the district court
granted the motion.
II.
The Vaughts present three issues. First, they contend that a
genuine issue of material fact exists as to when their cause of
action accrued. Next, they seek certification of the following
question to the Texas Supreme Court: “Under the Texas discovery
rule, does a plaintiff’s diligent, but fruitless, inquiry into
whether she has an actionable toxic tort suspend the statute of
limitations running against her claim?”. Finally, they maintain
that Janet Vaught’s membership in a putative nationwide L-
tryptophan class action tolled the limitations period until class
certification was denied.
We review a summary judgment de novo, applying the same
standard as the district court. E.g., Bodenheimer v. PPG Indus.,
Inc., 5 F.3d 955, 956 (5th Cir. 1993). Such judgment is
appropriate where “there is no genuine issue as to any material
fact and the movant is entitled to judgment as a matter of law”.
FED. R. CIV. P. 56(c). In making this determination, we are to draw
all reasonable inferences in favor of the nonmovant. E.g.,
Bodenheimer, 5 F.3d at 956. And, because this is a diversity
action, we apply Texas substantive law. Erie R.R. Co. v. Tompkins,
304 U.S. 64 (1938).
A.
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In Texas, a personal injury action must be filed “not later
than two years after the day the cause of action accrues.” TEX.
(CIV. PRAC. & REM.) CODE ANN. § 16.003(a). Generally, accrual occurs
on 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. Zidell v. Bird, 692
S.W.2d 550, 554 (Tex. Ct. App. 1985).
The “discovery rule” is an exception to this general rule.
See Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex. 1990).
Under Texas’ discovery rule, the limitations period is tolled until
the plaintiff discovers, or through the exercise of reasonable
diligence should have discovered, the nature of her injury. See
id.; Willis v. Maverick, 760 S.W.2d 642, 644 (Tex. 1988).
The term “discovered”, however, is quite broad. In Hoover v.
Gregory, 835 S.W.2d 668 (Tex. Ct. App. 1992, error denied), the
Texas Court of Appeals explained: “‘Discovery’ ... occurs when a
plaintiff ha[s] knowledge of such facts as would cause a reasonably
prudent person to make an inquiry that would lead to discovery of
the cause of action.” Id. at 671. Such knowledge is “in the law
equivalent to knowledge of the cause of action for limitation
purposes”. Bayou Bend Towers Council of Co-Owners v. Manhattan
Constr. Co., 866 S.W.2d 740, 747 (Tex. Ct. App. 1993, error
denied).
In other words, a cause of action may accrue before a
plaintiff actually learns the “details of the evidence by which to
establish his cause of action”. Hoover, 835 S.W.2d at 672-73
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(quoting Citizens State Bank v. Shapiro, 575 S.W.2d 375, 385 (Tex.
Ct. App. 1978, error refused nre)). As held in the controlling
case for purposes of this appeal, Bell v. Showa Denko K.K., 899
S.W.2d 749, 754 (Tex. Ct. App. 1995, error denied) this is because
the discovery rule “mandates that the plaintiff exercise reasonable
diligence to discover facts of negligence or omission”.
It is undisputed that Vaught first consumed L-tryptophan from
mid-1987 to 1988, more than two years before this action was filed
in April 1993. On these facts, the district court concluded that
the limitations period began in 1987, when Vaught first took L-
tryptophan, but that it was tolled until April 1990, when the
discovery period began. (Defendants do not contest this.) It was
then that Vaught read the newspaper article; connected her symptoms
with EMS; and contacted the lawyer’s office. Therefore, she had
two years from that point within which to file suit; she failed to
do so.
The Vaughts contend that there is a material fact issue on
when the cause of action accrued. They concede that a diagnosis of
a disease is not a sine qua non to “knowledge” under the discovery
rule but claim that Janet Vaught conducted a diligent (albeit
fruitless) inquiry into whether Defendants’ product was the cause
of her symptoms. (Along this line, it bears repeating that
Vaught’s inquiry apparently ended in mid-July 1990, when she was
diagnosed with fibromyalgia. This diagnosis was only approximately
three and one-half months after the discovery period began (when
she read the newspaper article). And after the July 1990
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diagnosis, she continued to have adverse symptoms, despite taking
the prescribed medication for the diagnosis of fibromyalgia for
approximately six months.)
If Janet Vaught exercised reasonable diligence, the Vaughts
continue, the legal consequence cannot be dismissal of her action.
Therefore, they maintain that the discovery rule should be read to
require “knowledge of sufficient facts that actually connect the
injury and the tortfeasor so as to warrant the filing of a suit by
a reasonable person”.
Defendants respond that it is knowledge of the injury — not
knowledge that the injury is actionable — that triggers the
discovery period (and the running of limitations). Thus, once a
plaintiff learns that she has been harmed and associates that harm
with a potential tortfeasor (such as a product manufacturer), she
has two years to discover relevant evidence; difficulty in
obtaining a confirming diagnosis during that interval does not toll
the two-year period.
In this regard, Defendants contend that the above-referenced
decision by the Texas Court of Appeals in 1995 in Bell v. Showa
Denko K.K. controls. We agree. Bell is very similar factually to
this action, and squarely addresses the Vaughts’ contention as to
when the discovery period began.
Bell also took L-tryptophan and allegedly contracted EMS as a
result. Bell, 899 S.W.2d at 752. Bell had suffered from severe
muscle pains from October 1989 to March 1990. Like Vaught, Bell
read about EMS in a newspaper article in late 1989 or early 1990,
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id. at 754, and suspected that she had EMS based on the fact that
her symptoms corresponded to those reported by EMS victims (muscle
pains and high eosinophil levels in blood). Id. at 754-55. Bell
consulted with various doctors in July 1990; filled out an “L-
tryptophan Eosinophilia-Myalgia Patient Data Sheet”; was told by
doctors in March and October 1990 that she might have EMS; but did
not receive a positive diagnosis until February 1992. Id. at 755.
Bell filed suit in Texas state court in September 1992 against
Showa Denko, K.K. and others. Id. at 752. The trial court granted
the defendants summary judgment on limitations grounds. Id.
The Texas Court of Appeals affirmed, id. at 755, concluding
that Bell had “knowledge” of her injury at some point between March
and July 1990, when she connected (“associated”) her symptoms with
the ingestion of L-tryptophan. Id. That knowledge was sufficient
to trigger the two-year statute; therefore, Bell’s September 1992
filing was too late. Id. (As discussed infra, the court also
rejected the tolling contention advanced here.)
It is undisputed that, in April 1990, Janet Vaught made a
connection between her physical symptoms, EMS, and the ingestion of
L-tryptophan. That knowledge was sufficient in Bell to trigger the
discovery period; it has the same legal effect here.
Vaught’s difficulty in obtaining a positive EMS diagnosis does
not distinguish this case from Bell. As the Bell court explained,
“the question to be determined is not whether a plaintiff has
actual knowledge of the particulars of a cause of action ...;
rather, it is whether the plaintiff has knowledge of facts which
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would cause a reasonable person to diligently make inquiry to
determine his or her legal rights.” Id. at 754 (emphasis added);
see also Hoover, 835 S.W.2d at 671-72; Shapiro, 575 S.W.2d at 385.
This language presumes that the discovery period begins before a
plaintiff has actionable knowledge — or, as the Vaughts describe
it, knowledge of “sufficient facts that actually connect the injury
and the tortfeasor”. In sum, there is no exception under Texas law
for those who make a diligent inquiry but fail to obtain a positive
diagnosis.
We are not blind to the Vaughts’ contention that Bell places
similarly situated plaintiffs in a difficult situation. They
assert that, if they had filed suit prior to 1993 — when they claim
they could not produce “a single medical witness to confirm [Janet
Vaught’s] suspicion that she had EMS” — they might well have been
subject to sanctions under TEX. R. CIV. P. 13 (the counterpart to
FED. R. CIV. P. 11), which forbids making groundless factual and
legal allegations. See TEX. R. CIV. P. 13. Yet the consequence of
waiting until she obtained a positive diagnosis in 1993 was that
her suit was dismissed as time-barred.
The source of the problem is not the Texas discovery rule; it
may well be the diagnoses of the first four doctors consulted, all
of whom advised Vaught that she did not have EMS. The discovery
rule operates to trigger the statute of limitations once a
plaintiff has the requisite knowledge, regardless of whether or how
the plaintiff is advised by the medical community. In this regard,
the result commanded by Bell is supported by United States v.
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Kubrick, 444 U.S. 111 (1979), in which the Supreme Court considered
whether an action under the Federal Tort Claims Act for alleged
malpractice in a Veterans Administration hospital had been timely
filed:
If [a plaintiff] fails to bring suit
because he is incompetently or mistakenly told
that he does not have a case, we discern no
sound reason for visiting the consequences of
such error on the defendant by delaying the
accrual of the claim until the plaintiff is
otherwise informed or himself determines to
bring suit, even though more than two years
have passed from the plaintiff’s discovery of
the relevant facts about [the] injury.
Id. at 124.
As a final matter, we note that a statute of limitations can
operate to the detriment of both plaintiffs and defendants. In
essence, the statute is a compromise; on occasion, it can cause
seemingly unfair results. The Texas Supreme Court has explained
that the primary purpose of such statutes is “to compel the
exercise of a right of action within a reasonable time that the
opposing party has a fair opportunity to defend while witnesses are
available and the evidence is fresh in their minds.” Willis, 760
S.W.2d at 644; see also Murray v. San Jacinto Agency, Inc., 800
S.W.2d 826, 828 (Tex. 1990). They establish a “point of repose”
and operate to “terminate stale claims”. Murray, 800 S.W.2d at
828. Nevertheless, Texas’ discovery rule, a judicially created
exception, theoretically permits an action to be filed long after
the limitations period would otherwise have expired, placing
defendants like Showa Denko at a possible disadvantage in terms of
witnesses and evidence.
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On the other hand, Texas has declined to construe the
discovery rule to toll limitations periods until “a plaintiff
discovers a specific cause of action against a specific defendant”.
See Moreno, 760 S.W.2d at 357 n.9. That approach would
“effectively ‘expand ... to infinity the time period during which
[an action] could be brought’”. Id. (quoting Pastierik v. Duquesne
Light Co., 526 A.2d 323, 325 (Pa. 1987)). Thus, a plaintiff like
Vaught, who may be incorrectly advised, may be precluded from
pursuing her cause of action, even though she took the necessary
investigatory steps mandated by the discovery rule.
B.
The Vaughts ask us to certify to the Texas Supreme Court the
question addressed above: “Under the Texas discovery rule, does a
plaintiff’s diligent, but fruitless inquiry into whether she has an
actionable toxic tort suspend the statute of limitations running
against her claim?” Certification to the Texas Supreme Court is
appropriate only if “it appears to the certifying court that there
is no controlling precedent in the decisions of the Supreme Court
of Texas”. TEX. R. APP. P. 114(a); see TEX. CONST. art. V, § 3-c; see
also Swearingen v. Owens-Corning Fiberglas Corp., 968 F.2d 559, 564
(5th Cir. 1992).
This procedure is not “a panacea for resolution of those
complex or difficult state law questions which have not been
answered by the highest court of the state.” Transcontinental Gas
Pipeline Corp. v. Transportation Ins. Co., 958 F.2d 622, 623 (5th
Cir. 1992). Thus, even in the absence of decisions by the Texas
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Supreme Court or intermediate appellate courts on an issue of state
law, we will not necessarily certify a question. See, e.g.,
Swearingen, 968 F.2d at 564.
Existing Texas law (especially Bell) adequately addresses the
discovery rule issue. Accordingly, we decline the certification
request.
C.
The Vaughts’ final contention is that Janet Vaught’s potential
membership in a putative L-tryptophan federal class action tolled
the limitations period until class certification was denied. On or
before 27 September 1990, three nationwide class actions were filed
in Maryland against various defendants, including Showa Denko, on
behalf of “natural persons who sustained personal injuries as a
result of ingesting ... L-tryptophan”. Two of the actions were
filed in federal court; one filed in state court was removed to
federal court. Rapoport v. P. Leiner Nutritional Products Corp.
(JH-90-397) (D. Md. — filed in state court 20 Dec. 1989 and removed
to federal court 2 Feb. 1990); Rapoport v. Showa Denko America (JH-
90-518) (D. Md. — filed 13 Feb. 1990); Rapoport v. Showa Denko K.K.
(JH-90-2516) (D. Md. — filed 27 Sept. 1990). All three were
transferred by the Panel on Multidistrict Litigation to the
earlier-referenced litigation in South Carolina (MDL No. 865).
Certification was denied in two of the actions in January 1992; the
third action was dismissed in May 1992 without reaching the
certification issue.
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The Vaughts contend that, under the decisions of the Supreme
Court in American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974),
and Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983), and of
the Texas Court of Appeals in Grant v. Austin Bridge Constr. Co.,
725 S.W.2d 366 (Tex. Ct. App. 1987), Janet Vaught’s membership in
the putative Rapoport classes tolled the limitations from running
against her claim (putative class action tolling). Thus, even
assuming the limitations period began running on 4 April 1990, when
she read the newspaper article, the period would have been tolled,
at the latest, on 27 September 1990 (176 days later), when the last
Rapoport action was filed; and when class certification was denied
on 3 January 1992, the limitations period would have resumed.
Therefore, the Vaughts would have had until 11 July 1993 (two years
less 176 days equals 554 days) to file suit, making their April
1993 filing timely.1
1
In ruling against this contention, the district court
stated initially that Janet Vaught had opted-out of the putative
Rapoport classes by independently pursuing her claim. In response
to the Vaughts’ counsel urging that she had not opted-out — because
she had not filed suit until after denial of class certification —
the district court stated:
There’s nothing in the facts here that suggest
that she did not pursue her claim because of
the pendency of that action. She consulted
counsel and doctors and thought she didn’t
have a claim. Unilateral mistake of fact.
We agree with the district court that the record does not reflect
that Vaught withheld filing suit pending a class certification
ruling. Moreover, Vaught does not claim that she did. (In any
event, any thought that Vaught withheld filing pending
certification is belied by the fact that this action was not filed
until April 1993, approximately 16 months after denial of
certification in South Carolina.)
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In American Pipe and Crown, Cork & Seal, the Court held that
filing a FED. R. CIV. P. 23 class action tolled limitations for
potential class members pending the certification ruling. Crown,
Cork & Seal, 462 U.S. at 353-54; American Pipe, 414 U.S. at 552-53.
And, in Grant, after the Texas Court of Appeals determined that
TEX. R. CIV. P. 42 was patterned after Federal Rule 23, the court
relied on American Pipe and Crown, Cork & Seal in holding that a
state class action tolled the limitations period for all potential
class members. Grant, 725 S.W.2d at 370.
Defendants counter that the American Pipe tolling rule governs
only property damage-type claims, not mass personal injury claims,
for which class certification has historically been disfavored.
See Castano v. American Tobacco Co., 84 F.3d 734, 746-47 (5th Cir.
1996) (denying nationwide class certification for proposed class of
nicotine-dependent persons who smoked and purchased cigarettes
manufactured by tobacco companies and of their families). They
assert that the American Pipe holding was based on the premise that
a class action would provide a defendant with sufficient notice of
the “potential claims of all potential class members”.
Accordingly, a possible issue might be whether Janet Vaught’s
independent actions (possibly including contacting the law firm and
consulting with doctors) and otherwise not awaiting a class
certification ruling preclude her from receiving shelter under the
putative class action tolling rule advanced here. It appears that
the district court ruled that they do. On the other hand, for our
de novo review, neither side presses the issue. In any event,
because, as discussed infra, we conclude that the Vaughts’ class
action tolling contention fails, we need not consider this possible
issue.
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In any event, Defendants assert primarily that the Texas Court
of Appeals’ decision in Bell also controls this issue because Bell
held that, under American Pipe, class action does not toll state
personal injury claims imputed in federal mass tort. The Vaughts
maintain, inter alia, that the tolling language in Bell is dicta,
because Bell also held that the class action tolling issue had not
been preserved for appeal. Id. at 756-57. However, under Texas
law, “[w]hen [the] highest court gives two grounds for a decision,
both of which are carefully developed and supported by authority,
an intermediate court cannot justifiably disregard either of these
grounds as obiter.” Inn of Hills, Ltd. v. Schulgen & Kaiser, 723
S.W.2d 299, 301 (Tex. Ct. App. 1987, error refused nre) (quoting
Reynolds-Penland Co. v. Hexter & Lobello, 567 S.W.2d 237, 243 (Tex.
Civ. App. 1978) (Guittard, J., dissenting)). Although the
foregoing authority refers to alternative holdings by the Texas
Supreme Court, this alternative-holdings rule must, of necessity,
apply to decisions by Texas’ intermediate appellate courts as well.
In Bell, the procedural and substantive bases for the tolling
rulings are independently developed and supported and do not depend
on hypothetical facts; neither can be disregarded as dicta.
We conclude that, pursuant to Bell, the Rapoport actions did
not toll the limitations period for the Vaughts. We arrive at this
conclusion, however, in a somewhat circuitous manner. As before,
we begin with Bell.
Bell contended that, under Grant and the American Pipe line of
cases, a federal class action filed in New Mexico tolled
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limitations on her claim until class certification was denied.
Bell, 899 S.W.2d at 756-57. In addressing this issue on the
merits, the Bell court concluded first that the American Pipe line
of cases did not directly control, because they involved the
tolling effect of putative federal class actions on federal
statutes of limitations. Id. at 757. Whether a state statute of
limitations would be tolled by a federal class action, the court
explained, was a question of state law. The Bell court construed
Grant to apply only to the tolling effect of a state class action
on state claims. Id. at 757-58. In addition, the Bell court
concluded, the American Pipe tolling rule was meant to apply only
where a class action gives a defendant notice of the “type and
potential number of the claims against it” — for example, where a
“discernible group of people claim[ ] injury to certain property”.
Id. at 758. The court explained:
For us to hold that the filing of a mass
personal injury suit, in a federal court, in
another state, with the variety of claims
necessarily involved in such a case, entitled
a plaintiff to a tolling of the limitations
period such as in American Pipe, would be an
extension not warranted by [Grant] and we
refuse to do so.
Id. Hence, the federal class action involved (New Mexico) did not
toll the limitations period on Bell’s state claims pending a
certification ruling.
To circumvent this holding in Bell, the Vaughts cite Supreme
Court and Fifth Circuit precedent, see Board of Regents v. Tomanio,
446 U.S. 478 (1980); Johnson v. Railway Express Agency, 421 U.S.
454 (1975); F.D.I.C. v. Dawson, 4 F.3d 1303 (5th Cir. 1993), cert.
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denied, 114 S. Ct. 2673 (1994), contending that a federal court may
disregard a state tolling rule if it is inconsistent with a federal
policy — in this case, the tolling effect of a putative federal
class action. Federal Rule 23 seeks to avoid a multiplicity of
actions in various courts and the “filing of repetitious papers and
motions”. American Pipe, 414 U.S. at 550. Therefore, the Vaughts
assert that, if the limitations period is not tolled during the
pendency of a Rule 23 class certification ruling, potential class
members will have to adopt a “belt-and-suspenders attitude”: each
will have to file suit individually to preserve her claim in the
event that certification is later denied.
None of the cited cases, however, support this contention.
Johnson and Tomanio involved federal causes of action under 42
U.S.C. §§ 1981 and 1983. Tomanio, 446 U.S. at 482; Johnson, 421
U.S. at 456. Because federal law does not specifically provide the
limitations period, state law is “borrowed” to provide it.
Johnson, 421 U.S. at 462. In fact, Johnson and Tomanio hold that,
in addition to borrowing a state’s statute of limitations for a §
1981 or § 1983 action, a federal court should also borrow the
corresponding tolling rules for such actions. Tomanio, 446 U.S. at
485-86; Johnson, 421 U.S. at 463-64. Of course, any borrowed state
law cannot be “inconsistent with the constitution and laws of the
United States”. 42 U.S.C. § 1988(a); see Tomanio, 446 U.S. at 485-
86; Johnson, 421 U.S. at 465.
Dawson involved a federal claim under the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA)
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brought by the FDIC as receiver. Dawson, 4 F.3d at 1305-07.
Although FIRREA provides a limitations period for such claims, it
cannot revive stale state law claims; thus, a court must determine
whether a claim would be barred by a state statute of limitations.
Id. at 1306-07. In Dawson, that inquiry included determining
whether the doctrine of adverse domination tolled the state
limitations period and whether, for that question, federal or state
law controlled. Id. at 1308. Citing Johnson, our court held that,
because we were “borrowing” a state statute of limitations, state
tolling principles would be the “‘primary guide’”, id. at 1308-09
(quoting Johnson, 421 U.S. at 465), and could be disregarded only
if “inconsistent with federal policy”. Id. (citing Tomanio, 446
U.S. at 485-86).
Needless to say, these cases are inapposite to this case; they
deal with borrowing state law to fill gaps left by Congress for
federal causes of action. In a § 1981, § 1983, or FIRREA action,
federal law still supplies the rules of decision. It makes sense,
therefore, that under 42 U.S.C. § 1988 and the Johnson and Tomanio
cases, a federal court may disregard a state tolling rule on
certain occasions.
By contrast, diversity actions, such as the one at hand for
product liability, involve state causes of action, where state law,
of course, provides the rules of decision, even in federal court.
In fact, the Supreme Court has stated that generally, for diversity
actions, a federal court should apply not only state statutes of
limitation but also any accompanying tolling rules. Walker v. Armco
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Steel Co., 446 U.S. 740, 750-53 (1980) (rendered only two weeks
after Tomanio).
The case providing the strongest support for the Vaughts
appears to be Byrd v. Blue Ridge Rural Elec. Coop., 356 U.S. 525
(1958). At issue was whether, in a diversity action, the judge or
the jury decided, under a state workers’ compensation act, the
question of employer immunity. Id. at 533-34. The applicable
state rule, pursuant to case law, provided that the judge decided
the question, id.; however, in federal court civil actions, the
jury traditionally, of course, resolved disputed questions of fact.
Id. at 534. Therefore, the Supreme Court held that the federal
court should not follow the state rule. Id. at 538-40.
The Court first explained that the state rule was not “an
integral part of the special relationship created by the [workers’
compensation] statute”, but was “merely a form and mode of
enforcing the immunity ... and not a rule intended to be bound up
with the definition of the rights and obligations of the parties”.
Id. at 536. In addition, the federal policy of having juries
decide disputed questions of fact was an “essential characteristic”
of the federal system, strongly influenced by the Seventh
Amendment. Id. at 537-38. For the Court, the importance of this
federal policy outweighed the state rule.
The Supreme Court’s subsequent decision in Hanna v. Plumer,
380 U.S. 460 (1965) (holding that federal court sitting in
diversity should apply FED. R. CIV. P. 4, rather than conflicting
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state rule, because federal rule was consistent with Rules Enabling
Act), does not prevent us from applying Byrd to the facts at hand.
Hanna concerned a federal rule of civil procedure promulgated
pursuant to the Rules Enabling Act, 28 U.S.C. § 2072, that was in
“direct collision” with state law. Hanna, 380 U.S. at 461-64. In
the case at hand, however, there is no federal rule of civil
procedure that is in direct conflict with state law. Although the
American Pipe tolling rule is intended to preserve the policies
underlying Rule 23, neither Rule 23 nor any other rule expressly
mandates tolling limitations periods. See FED. R. CIV. P. 23.
Restated, we are not “narrowly construing” the federal rules to
avoid a “direct collision” with state law; rather, we are applying
the rules’ plain meaning. See Walker, 446 U.S. at 750 n.9. And,
in those cases where “there is no conflict between the Federal Rule
and ... state law”, Hanna does not apply. Id. at 752.
Tolling is essentially a judge-made practice, see Crown, Cork
& Seal, 462 U.S. at 350-54; American Pipe, 414 U.S. at 552-59, and
nothing in Hanna detracts from a Byrd-type analysis of a conflict
between a judge-made federal practice and a state rule. Neither
Hanna nor any other Supreme Court case has explicitly overruled
Byrd or suggested that it no longer retains vitality. (Walker, in
which the Supreme Court applied a state tolling rule in a diversity
case, involved a claimed conflict with FED. R. CIV. P. 3, not a
federal practice, as here. See Walker, 446 U.S. at 741-43.)
In addition, to the extent our court has previously questioned
the vitality of Byrd in the light of Hanna, it has done so by
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suggesting that Hanna expanded the power of federal courts to
disregard state law in diversity cases:
We think, in the light of later
authority, that Byrd gave too little
recognition to the federal forum-qua-forum
interests.... Hanna gives us good reason to
hold that federal courts have inherent powers
under Article III to displace state laws on
matters involving their basic competence as
courts.
See In re Air Crash Disaster Near New Orleans, La. on July 9, 1982,
821 F.2d 1147, 1159 (5th Cir. 1987), cert. granted and judgment
vacated on other grounds, Pan American World Airways v. Lopez, 490
U.S. 1032 (1989), on remand, 883 F.2d 17 (5th Cir. 1989).
And, the Tenth Circuit has stated that, under Byrd, a federal
court sitting in diversity may disregard a state tolling rule.
Cook v. G.D. Searle & Co., 759 F.2d 800, 803 (10th Cir. 1985) (“A
state tolling rule ... will generally govern in diversity actions
absent a direct conflict between a state rule and an overriding
federal rule or affirmative countervailing federal consideration”.)
(citing Byrd). Under Byrd, therefore, the Texas non-tolling rule
(stated in Bell) could arguably be displaced because it conflicts
with the well-established federal tolling practice promulgated in
American Pipe and Crown, Cork & Seal.
Without doubt, there is a strong federal policy favoring the
tolling of limitations periods as to all potential members of a
Rule 23 class action. The Supreme Court explained in American Pipe
that a contrary holding would
frustrate the principal function of a class
suit, because then the sole means by which
members of the class could assure their
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participation in the judgment if notice of the
class suit did not reach them until after the
running of the limitation period would be to
file earlier individual motions to join or
intervene as parties — precisely the
multiplicity of activity which Rule 23 was
designed to avoid....
American Pipe, 414 U.S. at 551.
In Crown, Cork & Seal, the Court explained that the American
Pipe rule applied to all potential class members, not just
intervenors. Crown, Cork & Seal, 462 U.S. at 353-54. It went on
to state that, without tolling, its holding in Eisen v. Carlisle &
Jacquelin, 417 U.S. 156 (1974), requiring individual notice to
absent class members, would make no sense. Crown, Cork & Seal, 462
U.S. at 351. Notice is intended to enable class members to opt-out
and pursue their claims independently. Id. If there were no
tolling rule, notice would be irrelevant, because the limitations
period for absent class members would most likely have expired,
making the right to pursue a claim separately utterly meaningless.
Id. at 351-52.
In the light of Bell, we understand Texas’ tolling rule to
operate as follows: A state (Texas) class action that raises
property damage-type claims tolls a Texas statute of limitations
pending a certification ruling. And, consistent with our
understanding of this Texas tolling rule, it is unclear whether,
under this rule, a federal class action filed in Texas or in any
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other State would ever toll a Texas statute of limitations,
regardless of the type of claims raised.2
In any event, this Texas rule clearly conflicts with the well-
established federal practice on class action tolling. We conclude,
however, that, for this case, the federal interest in that practice
does not trump the Texas tolling rule. Unlike the situation in
Byrd or Hanna, neither the federal constitution nor federal law
would be displaced. On the other hand, a tolling rule is an
“integral part” of a statute of limitations. See Byrd, 356 U.S. at
536. Therefore, Texas’ interest in its tolling rule has quite
considerable depth. This is because its rule is a means of
enforcing its statute of limitations, a matter of considerable
importance to Texas, one reflecting a deliberate policy choice by
its legislature.
In short, we have come full-circle. Bell controls.
Consequently, summary judgment was proper.
III.
Because the Vaughts’ action is time-barred, the summary
judgment awarded Defendants is
AFFIRMED.
2
Pre-Bell, our court noted that Texas’ tolling rule was
the same as the federal rule under American Pipe and Crown, Cork &
Seal. See National Ass’n of Gov’t Employees v. City Pub. Serv. Bd.
of San Antonio, Tex., 40 F.3d 698, 715 n.25 (5th Cir. 1994) (citing
Grant). Post-Bell, that observation retains little vitality.
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