NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 12-3249
_____________
MARK LEYSE, Individually and on
behalf of all others similarly situated
Appellant
v.
BANK OF AMERICA, NATIONAL ASSOCIATION
_____________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 2-11-cv-07128)
District Judge: Hon. Susan D. Wigenton
_____________
Submitted Under Third Circuit LAR 34.1(a)
March 21, 2013
Panel Rehearing Granted
October 3, 2013
BEFORE: McKEE, Chief Judge, SMITH, and GREENAWAY, Jr., Circuit Judges.
(Filed: October 4, 2013)
_____________
OPINION
_____________
McKEE, Chief Judge.
Rarely has one phone call led to so much litigation. In this case, Mark Leyse
appeals the District Court’s dismissal of his Complaint against Bank of America
1
(“BoA”), in which he alleged a violation of the Telephone Consumer Protection Act
(“TCPA”), 47 U.S.C. § 227(b)(1)(B). For the reasons that follow, we will vacate and
remand for further proceedings.1
I. BACKGROUND
On March 11, 2005, DialAmericaMarketing, Inc. (“DialAmerica”), telephoned
Leyse on his residential telephone line, which is also associated with Leyse’s roommate,
Genevieve Dutriaux. The call contained a prerecorded message, and Leyse alleges that
the call violated the TCPA.2 This suit is based on that call and it is the third class action
that Leyse and Dutriaux have pursued based on the same March 2005 call.
On April 12, 2005, Dutriaux filed a putative TCPA class action in the Southern
District of New York, No. 05 Civ. 3838 (the “Dutriaux” action). The action was
ultimately administratively closed on December 1, 2008, and neither Dutriaux nor BoA
has sought to reopen the case.
On March 10, 2009, Leyse filed a TCPA action against BoA in the Western
District of North Carolina. BoA successfully moved to transfer the case to the Southern
District of New York, which dismissed the suit. Leyse v. Bank of Am., N.A., No. 09 Civ.
1
The District Court had jurisdiction under 28 U.S.C. §§ 1331 and 1332(d)(2)(A).
We have jurisdiction under 28 U.S.C. § 1291. We review de novo the District Court’s
application of defensive collateral estoppel, Jean Alexander Cosmetics, Inc. v. L’Oreal
USA, Inc., 458 F.3d 244, 248 (3d Cir. 2006), and statutes of limitations, Nelson v. Cnty.
of Allegheny, 60 F.3d 1010, 1012 (3d Cir. 1995).
2
Subject to exceptions not applicable here, the TCPA prohibits, inter alia, the use
of “any telephone call to any residential telephone line using an artificial or prerecorded
voice to deliver a message without the prior express consent of the called party.” 47
U.S.C. § 227(b)(1)(B). The TCPA provides for a private right of action for violations of
its provisions or any implementing regulations. 47 U.S.C. § 227(b)(3), (c)(5).
2
7654, 2010 WL 2382400 (S.D.N.Y. June 14, 2010) (“Leyse I”). In Leyse I, the district
court concluded that Leyse was not the “called party” and, therefore, lacked standing to
seek statutory damages under the TCPA. Id. Leyse appealed. However, on February 8,
2011, in response to BoA’s motion to dismiss the appeal based on N.Y. C.P.L.R. §
901(b), the Court of Appeals for the Second Circuit summarily affirmed the judgment.
Finally, on December 5, 2011, Leyse filed this action in the District of New Jersey
(“Leyse II”), alleging the same claims, and based on the same set of facts, as the two prior
actions. The District Court granted BoA’s motion to dismiss, ruling that Leyse’s claim is
barred by collateral estoppel and by any potentially applicable statute of limitations. On
April 24, 2013, we affirmed the District Court’s order dismissing this appeal. However,
Leyse thereafter moved for panel rehearing and rehearing en banc. For the reasons that
follow, we will grant panel rehearing, vacate our previous order affirming the District
Court’s order of dismissal and remand for further proceedings consistent with this
Opinion.
II. DISCUSSION
A. Collateral Estoppel
The District Court ruled that Leyse’s Complaint in this action is barred by the
doctrine of collateral estoppel. Dismissal under the doctrine of collateral estoppel is
appropriate where: “‘(1) the issue sought to be precluded [is] the same as that involved in
the prior action, (2) that issue [was] actually litigated; (3) it [was] determined by a final
and valid judgment; and (4) the determination [was] essential to the prior judgment.’”
Nat’l R.R. Passenger Corp. v. Pa. Pub. Util. Comm’n, 288 F.3d 519, 525 (3d Cir. 2002)
3
(alterations in original) (quoting Burlington N. R.R. Co. v. Hyundai Merch. Marine, 63
F.3d 1227, 1231-32 (3d Cir. 1995)).
On rehearing, we agree with Leyse that collateral estoppel is not applicable here.
“[I]t is of the essence of estoppel by judgment that it is certain that the precise fact was
determined by the former judgment.” De Sollar v. Hanscome, 158 U.S. 216, 221 (1895).3
Here, there is at least some ambiguity as to whether the Second Circuit’s summary
affirmance rested on the “called-party” ground or on an issue of state law. See Morse v.
Republican Party of Va., 517 U.S. 186, 203 n.21 (1996) (“A summary disposition affirms
only the judgment of the court below, and no more may be read into our action than was
essential to sustain that judgment.”) (internal quotation marks omitted); Mandel v.
Bradley, 432 U.S. 173, 176 (1977) (“Because a summary affirmance is an affirmance of
the judgment only, the rationale of the affirmance may not be gleaned solely from the
opinion below.”).
The Second Circuit’s summary affirmance in Leyse I does not explicitly state the
reason for the affirmance. However, the court cited United States v. Monsalve, 388 F.3d
71, 73 (2d Cir. 2004), as the reason it “construe[d] [BoA’s] motion as seeking summary
affirmance.” Leyse v. Bank of Am., N.A., No. 10 Civ. 2735 (2d Cir. Feb. 8, 2011). In
3
See also Russell v. Place, 94 U.S. 606, 608 (1876) (“If there be any uncertainty .
. . in the record, -as, for example, if it appear that several distinct matters may have been
litigated, upon one or more of which the judgment may have passed, without indicating
which of them was thus litigated, and upon which the judgment was rendered, -the whole
subject-matter of the action will be at large, and open to a new contention, unless this
uncertainty be removed by extrinsic evidence showing the precise point involved and
determined.”).
4
Monsalve, the court explained that it will “construe a motion to dismiss an appeal as a
motion for summary affirmance if the appeal presents only frivolous issues.” Monsalve,
388 F.3d at 73 (emphasis added). As BoA argued in its motion to dismiss (which the
Second Circuit construed as a motion for summary affirmance), binding Second Circuit
precedent then held that N.Y. C.P.L.R. § 901(b) bars plaintiffs from maintaining private
TCPA class actions in federal court and therefore the court lacked jurisdiction. See
Holster v. Gatco, Inc., 618 F.3d 214, 215-16, 218 (2d Cir. 2010) (holding that N.Y.
C.P.L.R. § 901(b) applies to TCPA actions in New York and prohibits class action suits
seeking statutory damages), abrogation recognized by Giovanniello v. ALM Media, LLC,
__ F.3d __, 2013 WL 4016567 (2d Cir. Aug. 8, 2013). Since binding precedent then
supported BoA’s N.Y. C.P.L.R. argument, it is quite possible that that was the reason the
court determined the appeal was “frivolous” and converted BoA’s motion to dismiss the
appeal to a motion for summary affirmance.
Moreover, the surrounding circumstances further undermine the likelihood that the
Second Circuit relied on the called-party issue. First, the summary affirmance was issued
in response to BoA’s motion to dismiss and the sole ground for that motion was the
preclusion of such class actions contained in N.Y. C.P.L.R. § 901(b). Second, Leyse’s
petition for certiorari to the Supreme Court focused entirely on the N.Y. C.P.L.R. issue
and did not discuss the district court’s ruling on the called-party issue. Finally, the N.Y.
C.P.L.R. issue was fully briefed before the Second Circuit issued its summary
affirmance, but the called-party issue was not. This procedural background is sufficient
5
by itself to undermine any suggestion that the called-party issue was fully litigated in
Leyse I.
We realize that we have held that “independently sufficient alternative findings
should be given preclusive effect.” Jean Alexander Cosmetics, Inc. v. L’Oreal USA, Inc.,
458 F.3d 244, 255 (3d Cir. 2006). However, that does not resolve the issue here because
the Second Circuit did not base its summary affirmance on two independently sufficient
alternative grounds. Rather, as we have explained, that court appears to have relied upon
restrictions in New York practice requirements that prevent Leyse from basing a class
action on the March phone call. Thus, it was not appropriate for the District Court to
apply the doctrine of collateral estoppel to bar this suit.
B. Statute of Limitations and American Pipe Tolling
The District Court also determined that Leyse’s Complaint must be dismissed
because, regardless of whether the two-year period under New Jersey law or the four-year
period under 28 U.S.C. § 1658(a) applies to TCPA claims, Leyse’s action is time-barred
because his claim is not subject to tolling under the rule established in American Pipe &
Construction Co. v. Utah, 414 U.S. 538 (1974).
Under the Supreme Court’s decision in American Pipe, the filing of a class action
complaint “tolls the running of the statute [of limitations] for all purported members of
the class who make timely motions to intervene after the court has found the suit
inappropriate for class action status.” 414 U.S. at 553. The Court later extended this
holding to all asserted members of the class who file subsequent individual actions, not
just intervenors. Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 350 (1983). In Yang
6
v. Odom, 392 F.3d 97 (3d Cir. 2004), we held that “American Pipe tolling applies to the
filing of a new class action where certification was denied in the prior suit based on the
lead plaintiffs’ deficiencies as class representatives, but that American Pipe tolling does
not apply where certification was denied based on deficiencies in the purported class
itself.” Id. at 99.
Leyse’s cause of action accrued on March 11, 2005 (the date of the alleged
telephone call) but this suit (Leyse II) was not filed until nearly seven years later, on
December 5, 2011. Thus, Leyse must rely on American Pipe tolling to save his claim
from being time-barred. The District Court reasoned that “tolling is inapplicable here
because the class was never presented for certification in either the Dutriaux or the
[Leyse I] Action.” Leyse v. Bank of Am., N.A., No. 11-7128, 2012 WL 2952428, at *6
(D.N.J. July 18, 2012). To support this conclusion, the District Court appears to rely on
the Supreme Court’s statement that commencement of a class action tolls the statute of
limitations as to all asserted class members “‘until class certification is denied.’” Id. at
*5 (quoting Crown, Cork & Seal Co., 462 U.S. at 354, and citing American Pipe, 414
U.S. at 552-54). The District Court also references our decisions holding that American
Pipe tolls the statute of limitations for “a later class action where the district court had, in
a prior class action, declined to certify a class for reasons unrelated to the appropriateness
of the substantive claims for certification.” Id. at *6 (internal quotation marks omitted)
(quoting Yang, 392 F.3d at 104, and McKowan Lowe & Co., Ltd. v. Jasmine, Ltd., 295
F.3d 380, 386, 389 (3d Cir. 2002)). The District Court cites to In re Vertrue Mktg. &
Sales Practices Litig., 712 F. Supp. 2d 703, 717 (N.D. Ohio 2010), for the proposition
7
that “[d]ismissal of a claim is not akin to a ruling on class certification . . . [and]
[w]hether class treatment is appropriate is wholly independent of whether a claim
succeeds on the merits.” Leyse II, 2012 WL 2952428, at *6.
However, neither the district court in the Dutriaux nor Leyse I action determined
whether class certification is irrelevant for determining the applicability of American
Pipe tolling. The Supreme Court has explained that it is “the commencement of a class
action [that] suspends the applicable statute of limitations as to all asserted members of
the class.” American Pipe, 414 U.S. at 554 (emphasis added); see also McKowan, 295
F.3d at 382 (“Under the Supreme Court’s decision in American Pipe . . . , the filing of a
class action complaint tolls the statute of limitations for all members of the putative class
. . . .”) (emphasis added). The Supreme Court’s pronouncement that class action tolling
ends when class certification is denied does not require a formal motion for class
certification, or any district court ruling on class certification.
Moreover, the driving rationale for the American Pipe tolling rule would be
severely undermined under the District Court’s interpretation. American Pipe is
compelled by the fact that class actions are “designed to avoid, rather than encourage,
unnecessary filing of repetitious papers and motions.” American Pipe, 414 U.S. at 550.
The American Pipe rule is necessary to “encourage[] unnamed plaintiffs to rely on the
class action already filed on their behalf.” McKowan, 295 F.3d at 384.4 As we have
4
The Court in American Pipe also explained that the tolling rule established
therein “is in no way inconsistent with the functional operation of a statute of
limitations.” American Pipe, 414 U.S. at 554. Because tolling is triggered only by timely
service of the class action complaint on defendants by the named plaintiff, the tolling rule
8
explained, “[i]f the claims of unnamed plaintiffs were not tolled, claimants would have an
incentive to file claims themselves to protect their causes of action, ‘precisely the
multiplicity of activity which Rule 23 was designed to avoid.’” Id. (quoting American
Pipe, 414 U.S. at 551).
This concern is present from the commencement of the class action and remains
until the propriety of maintaining the suit as a class action is determined.5 As the Court
of Appeals for the Seventh Circuit has recently explained, “it does not matter, under
federal law, whether the first suit’s status as a would-be class action ends by choice of the
plaintiff (who may abandon the quest to represent a class or . . . bow out altogether) or by
choice of the judge.” Sawyer v. Atlas Heating & Sheet Metal Works, Inc., 642 F.3d 560,
563 (7th Cir. 2011). “The [Supreme] Court’s goal of enabling members of a putative
class to rely on a pending action to protect their interests can be achieved only if the way
in which the first suit ends—denial of class certification by the judge, abandonment by
the plaintiff, or any other fashion—is irrelevant.” Id. at 562.
In the present case, the class action complaint in the Dutriaux action was filed on
April 12, 2005. Because Leyse was a putative member of that alleged class, the statute of
does not undermine the twin functions of statutes of limitations—providing timely notice
and avoiding stale claims. See id. at 554-55. However, although the lack of conflict
between American Pipe and the functions of statutes of limitations supported the
adoption of the class action tolling rule, the driving objective for the American Pipe rule
is to prevent repetitious filings by protecting unnamed plaintiffs.
5
We do not suggest, however, that tolling under American Pipe may extend
beyond the initial denial of class certification by the district court. See Yang, 392 F.3d at
102 (concluding that “a final adverse determination of class claims” occurred when the
district court “denied class certification with prejudice . . . and the applicable tolling
period ended that day.”).
9
limitations on his claim was tolled from that date until the case was administratively
closed on December 1, 2008. As we have just explained, the fact that the Dutriaux
action’s status as a would-be class action was terminated by administrative closure rather
than denial of class certification is irrelevant to the issue of tolling under American Pipe.
We agree with the District Court, however, that the principles underlying
American Pipe and its progeny do not allow Leyse to benefit from tolling based on the
Leyse I action. As we explained, American Pipe was intended to prevent repetitious
filings and to protect unnamed plaintiffs. This concern is not relevant with respect to the
named plaintiff in the prior class action. Thus, we agree that the Supreme Court did not
intend for American Pipe tolling to protect individuals like Leyse, who initiated the prior
class action and was a named plaintiff in that prior suit.
BoA also argues that Leyse cannot take advantage of any tolling from the
Dutriaux action because he lacked standing as a called-party under the TCPA and was
therefore not a member of the putative class in that case. This position is difficult to
square with the fact that Leyse is a member of the putative class as alleged in the
Dutriaux complaint, the district court in Dutriaux had not limited the class to exclude
him, and, as explained above, the district court’s holding in Leyse I that Leyse was not a
called-party is not entitled to preclusive effect here, much less in Dutriaux. In any case,
we need not address this argument in the context of tolling. On remand, if the District
Court determines that Leyse lacks standing as a called-party, it would have to dismiss
Leyse’s complaint on that basis, independent of any implications for the applicability of
American Pipe tolling. If the court determines that Leyse does have standing as a called-
10
party, that determination would defeat BoA’s argument that Leyse cannot benefit from
tolling based on the Dutriaux action because he lacks standing.
Accordingly, we conclude that the District Court erred in holding that American
Pipe tolling does not apply to Leyse’s claim.6
III. Conclusion
For the reasons set forth above, we will vacate the Order of the District Court
dismissing Leyse’s Complaint and remand for further proceedings.
6
In Landsman & Funk PC v. Skinder-Strauss Associates, Nos. 09-3105; 09-3532;
09-3793, 2012 WL 2052685 (3d Cir. April 17, 2012), we remanded to the district courts,
in light of Mims v. Arrow Financial Services, LLC, 132 S. Ct. 740 (2012), for resolution
of, inter alia, whether state or federal law supplies the statute of limitations for TCPA
claims. In light of our decision in Landsman, we will refrain from deciding this issue in
the first instance here, and will leave for the District Court to resolve on remand whether
the federal catch-all limitations period under 28 U.S.C. § 1658(a) or a state limitations
period applies to Leyse’s TCPA claim.
11