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How long do employees have to file a lawsuit in state court after a federal court declines to rule on their state-law claims? The U.S. Supreme Court heard oral arguments on Nov. 1 in a case that asks this question.
"It's a simple question, but there's not necessarily an obvious answer," said Guy Brenner, an attorney with Proskauer in Washington, D.C.
Employees can file a single lawsuit in federal court that asserts both federal and state-law claims against their employer. If the judge dismisses the federal claims, he or she can decline to hear the remaining state-law claims. The employee then has a certain amount of time to file the state-law claims in state court. But just how much time isn't clear.
Federal law provides that state-law claims will be "tolled" or paused while the claims are pending in federal court and for a period of 30 days after they are dismissed—unless state law provides for a longer tolling period.
In Artis v. District of Columbia, No. 16-460, the relevant state law limitations period had already passed by the time the employee's claims were dismissed by the federal judge. The employer therefore argued that the worker only had a 30-day grace period to file her claims in state court.
However, the employee argued that the tolling period stopped the clock from running on her state-law claims and that she still had whatever time remained under the state statute of limitations when the claims were filed in federal court plus 30 additional days.
"It's a technical case with real-world implications for employers," said Christopher Humber, an attorney with Ogletree Deakins in Washington, D.C. He said it's worth it for employers to pay attention to this case because, if the court sides with the employee, businesses may face a litigation risk for years after the federal claims are dismissed.
In Artis, a worker who was fired from the Washington, D.C., Department of Health brought a discrimination claim under Title VII of the Civil Rights Act of 1964, as well as whistle-blower and wrongful termination claims under Washington, D.C., law (which is considered state law). The federal court dismissed her Title VII claim and declined to decide the state-law issues.
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Fifty-nine days later, the worker filed her remaining claims in the Superior Court of the District of Columbia. Her former employer asked the superior court to dismiss her claims, arguing that she missed the 30-day grace period to file her new complaint.
The employee saw the tolling period as a "stop-clock" provision rather than a grace period. There were almost two years remaining under the statute of limitations for her Washington, D.C., claims when she filed the lawsuit in federal court. Therefore, she argued that the statute of limitations clock had paused until the federal case was dismissed and she still had those two years plus 30 days to file her claims in state court.
The superior court sided with the employer and dismissed the lawsuit. The appellate court affirmed the ruling.
If the Supreme Court sides with the employer, plaintiffs' attorneys will likely just make sure that claims are filed in state court within the 30-day window, Brenner said. So, practically speaking, a ruling for the employer may not lead to less litigation, but it would help employers avoid litigating issues that happened a long time ago, he added.
Humber said that the justices seemed more receptive to the employee's arguments. Her attorney argued that to "toll" means to "suspend."
"That is the definition given in Black's Law Dictionary, and that is the way 'tolled' is used in every other statute that uses the word," argued Adam Unikowsky, on behalf of the employee. Unikowsky is an attorney with Jenner & Block in Washington, D.C.
Justice Elena Kagan noted that Congress might have intended to have a stop-clock statute "for all the reasons that we often have stop-clock statutes" and then added the extra 30 days "just to make sure that the person who's filing on the last day has a little bit of time."
Justice Stephen Breyer suggested that employment discrimination claims generally have a short limitations period and therefore suspending the limitations period "won't hurt the defendants that much."
But counsel for the employer disagreed. If an employee can file the state lawsuit years after a federal claim was dismissed, memories may fade, witnesses may move and documents may no longer be easily accessible, argued Loren Alikhan, an attorney with the Washington, D.C., Office of the Attorney General.
Some justices had doubts about adopting the employee's stop-clock view. Justice Sonia Sotomayor raised concerns about "protecting the state … from having to look at stale and old claims." And Chief Justice John Roberts Jr. noted that "the purpose of the statutes of limitations are to protect the defendants to a large extent, not just the plaintiffs."
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