Court of Appeal Holds That Equitable Tolling Is Not Simply a Plaintiff’s Reset Button

One of the core lessons for defense counsel is understanding that procedural dynamics of cases have substantive strategic consequences.  One of the most complex is the decision of plaintiff’s counsel to dismiss a case.  For instance, without more, voluntary dismissal may result in a claim for costs and fees by the defense under the California Code of Civil Procedure.  Cal. Code Civ. Proc. § 1032.  The situations where a short-sighted dismissal can harm a client are many.  Similar consequences can occur when errors are made in choices between state and federal forums.  That is the subject of this article.

Background

On August 20, 2011, an individual was shot in a parking lot by an unknown assailant after a professional football game.  He subsequently asserted putative liability against the teams and their league in state court.

A year and half later, Plaintiff’s counsel discovered facts that he believed supported a federal lawsuit.  Viewing this as arguably a more favorable forum he filed a second lawsuit.  Defense counsel warned that the federal suit would be pointless, as a federal court could stay the federal lawsuit when a concurrent state lawsuit was pending in which identical issues were raised.  In response, Plaintiff’s counsel voluntarily dismissed his lawsuit in state court only to have a federal court decline jurisdiction over his new case.

Equitable Tolling

Plaintiff returned to state court, re-asserting all of his prior allegations.  However, this was past the two-year deadline by which to file any lawsuits related to the date of injury; referred to as a “statute of limitations.” 

Counsel knew his claim was late, but argued he should receive more time based on the concept of “equitable tolling” — a judicially created doctrine to suspend or extend a statute of limitations as necessary to ensure fundamental practicality and fairness.  For example, if a plaintiff filed a lawsuit in federal court, but was ultimately kicked to state court, he would not be barred from filing his lawsuit in state court if the only reason he had not done so previously was because of his pending lawsuit in federal court, even if the statute of limitations had lapsed.  This also benefits the courts by working to discourage the filing of multiple lawsuits through all available forums as a form of insurance, which would ultimately strain and overburden our court systems.

However, to benefit from equitable tolling, a plaintiff must show all three of the following elements: a) timely notice, b) a lack of prejudice to the defendant, and c) reasonable and good faith conduct on the part of plaintiff.  In view of the facts above, the California Court of Appeal concluded that Plaintiff’s strategic and voluntary dismissal of his state lawsuit was not reasonable, nor was it in good faith.  After all, it completely differed from the typical scenarios in which equitable tolling applies because Plaintiff did not start in federal court, but rather started in state court, tried to move to federal court, and then slunk back to state court only after he failed.

The Court of Appeal noted that the state court was fit, was ready, and had been about to try Plaintiff’s case when he walked away.  Accordingly, Plaintiff was free to take a chance at filing his claim in federal court, but he did so at his own peril — he could not have it both ways.

Conclusion

The California Court of Appeal only confirmed what experienced attorneys have long known, which is that how you litigate a case matters nearly as much as what you’re litigating.  Long shots in the dark will rarely get you the results you want, and an experienced eye is needed to discern the best path forward.  As with so many things in life, timing is essential.  Contact your counsel at Atkinson, Andelson, Loya, Ruud & Romo for advice today.

Categories: Court of Appeals

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