Colorado attorneys who litigate state claims in federal court pursuant to the federal supplemental jurisdiction statute should beware: the rules have changed.
Pursuant to 28 U.S. Code, Section 1367, federal courts may exercise supplemental jurisdiction over state law claims when they are so related to the federal claims that they form part of the same case or controversy. Thus, for example, a municipal employee who has been terminated from his job and files a section 1983 due process claim in federal court can invoke section 1367 to also file state law breach of contract and promissory estoppel claims.
However, if during the course of litigation the federal court dismisses the federal claims via a motion to dismiss, summary judgment or some other mechanism, pursuant to section 1367(c)(3), the court will commonly decline to exercise supplemental jurisdiction over the remaining state claims and dismiss them without prejudice. In such instances, the supplemental jurisdiction statute’s tolling provision, section 1367(d), provided what many understood was a grace period for plaintiffs to refile their state claims in state court: “The period of limitations for any [state] claim … shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.”
Because Colorado Revised Statutes section 13-80-111 permits state claims to be refiled within 90 days of their dismissal in federal court for lack of jurisdiction, many attorneys believed that Colorado plaintiffs in this situation had a maximum of 90 days to refile their state claims.
However, on Jan. 22, the U.S. Supreme Court issued its decision in Artis v. District of Columbia and clarified the meaning of section 1367(d)’s tolling provision.
Artis filed an action in federal district court alleging one federal employment discrimination claim and three related claims under District of Columbia law. At the time of filing, almost two years remained on her state law claims’ statute of limitations. After the case was pending in federal district court for two and a half years, the federal district court dismissed Artis’ only federal claim and declined to exercise supplemental jurisdiction over her remaining state law claims.
Fifty-nine days after the dismissal, Artis refiled her state law claims in D.C. Superior Court, but the court dismissed them as time-barred. On appeal, the D.C. Court of Appeals affirmed and held that Artis’ state law claims were time-barred because section 1367(d) only provided her a 30-day grace period to refile her state claims.
The U.S. Supreme Court granted certiorari and was essentially faced with resolving a disagreement over the interpretation of section 1367(d)’s tolling provision. On one side, as argued by the District of Columbia, it was understood that a state law claim’s limitations period continued to run while the claim was pending in federal court, and section 1367(d) simply provided a fixed grace period for plaintiffs to refile the claims in state court in order to prevent the risk of a time bar. On the other side, championed by petitioner Artis, section 1367(d)’s tolling provision suspended or “stopped-the-clock” on the state law claim’s statute of limitations while it was pending in federal court. If the federal court later declined to exercise supplemental jurisdiction, plaintiff would have whatever time remained on the statute of limitations, plus 30 days (unless state law provided for a longer tolling period). Under this interpretation of the statute, Artis’ state law claims would have been timely because she would have had two years, plus 30 days, to refile her state law claims after the D.C. Superior Court declined to exercise supplemental jurisdiction.
In a 5-4 decision written by Justice Ruth Bader Ginsburg, the Supreme Court agreed with Artis’ stop-the-clock reading of the tolling statute and reversed the decision of the D.C. Court of Appeals. Directing its analysis on the plain meaning of the statute, the court found that § 1367(d) is phrased as a “tolling” provision that suspends the statute of limitations for two adjacent time periods: once while the claim is pending in federal court and again 30 days post dismissal.
The court rejected the District of Columbia’s secondary argument, which was also advanced in amicus briefs from several states, that interpreting section 1367(d) as stopping-the-clock on the statute of limitations potentially exceeded Congress’ authority under the Constitution’s Necessary and Proper Clause.
Moving forward, Colorado litigators should be familiar with Artis and its practical effects on a plaintiff’s ability to refile state claims after a federal court declines to exercise supplemental jurisdiction.
In many cases, Artis provides plaintiffs with a prolonged period of time within which to refile their state claims, encompassing both whatever time remained on their state claims when the federal court action was filed, plus 90 days pursuant to Colorado Revised Statutes, section 13-80-111.
Brian Condon is an attorney at Semple, Farrington & Everall, P.C., where his practice focuses on the defense of school districts and other public entities in labor and employment matters. He can be reached at [email protected].