Antitrust Law Daily Wrap Up, PRIVACY—3d Cir.: TCPA class action remanded to determine basis for dismissal of earlier claim, (Oct 7, 2013)

By Edward L. Puzzo, J.D.

A TCPA class action must be remanded to the district court to determine whether the basis for dismissal of an earlier claim based on the same facts permits tolling of the statute of limitation for this claim, the U.S. Court of Appeals in Philadelphia has ruled in a non-precedential opinion (Leyse v. Bank of America, October 4, 2013, McKee, T.).

Mark Leyse, representing a class, brought a claim under the Telephone Consumer Protection Act against Bank of America, based upon a 2005 telephone call. The call, containing a prerecorded message, was made to a residential line associated with Leyse and his roommate Genevieve Dutriaux.

Two previous legal actions were brought based upon the 2005 telephone call. Dutriaux brought a claim in the U.S. District Court for the Southern District of New York. That matter was administratively closed in 2008. Leyse also brought a claim in the U.S. District Court for the Western District of North Carolina in 2009. Bank of America successfully moved to transfer the case to the U.S. District Court for the Southern District of New York, where it was dismissed. The Second Circuit U.S. Court of Appeals affirmed this dismissal.

The instant case arose from Leyse’s 2011 lawsuit, based on the same claims and brought in U.S. District Court for the District of New Jersey. That court ruled that collateral estoppel and applicable statutes of limitation barred the claim. The Third Circuit affirmed the dismissal, but Leyse moved and was granted a rehearing en banc.

Collateral estoppel. Dismissal under the doctrine of collateral estoppel, the court explained, is appropriate where: the issue sought to be precluded is the same as that involved in the prior action; that issue was actually litigated; it was determined by a final and valid judgment; and the determination was essential to the prior judgment.

The court noted that there was ambiguity as to whether the Second Circuit’s summary affirmance of the dismissal of the 2009 lawsuit rested on the grounds that Leyse was not the called party and therefore lacked standing, or it rested on an issue of state law. If it was based on standing, the record indicates that the issue was not fully litigated, the court determined. Instead, the Second Circuit appears to have relied upon restrictions in New York state law requirements that prevent Leyse from basing a class action on the phone call in question. Since the issue involved in the prior case was not actually litigated, the Third Circuit ruled, collateral estoppel does not bar this lawsuit.

Statute of limitations. Leyse’s cause of action accrued in 2005 when the telephone call occurred, and he did not file the instant case until 2011. The lower court determined that the claim was time-barred under either the two-year New Jersey statutory period or the four-year period applicable to TCPA claims. That court also determined the limitation period was not subject to tolling under the U.S. Supreme Court case of American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), which permits tolling of the statutory period for class members who refrain from filing individual actions while waiting for a court determination of class status.

This court disagreed with the lower court’s conclusion that tolling under American Pipe did not apply. The court conceded that American Pipe does not necessarily protect individuals such as Leyse who initiate repetitious filings. Nevertheless, it also cannot be concluded that Leyse cannot take advantage of any tolling from the 2005 action because he may have lacked standing as the called party. Therefore, this court ruled, the case must be remanded to the district court for a determination as to whether Leyse lacked standing as the called party. If standing is found, Leyse will benefit from tolling from 2005, when the first action was filed until the case was administratively closed in 2008, and the instant claim will not be subject to dismissal on a statute of limitations basis.

The case is Civil Action No. 12-3249.

Attorneys: Todd C. Bank for Mark Leyse. David J. Fioccola, Adam J. Hunt, Mark P. Ladner and Kyle W.K. Mooney (Morrison & Foerster LLP) for Bank of America, N.A.

Companies: Bank of America, N.A.

Cases: Privacy Advertising DelawareNews NewJerseyNews PennsylvaniaNews