Ryan v. Streck, Inc.
309 Neb. 98
| Neb. | 2021Background
- Ryan received Streck shares in 1985; a 2012 revised redemption agreement required Streck to repurchase her shares at the most recent JVA valuation.
- Ryan alleged Streck undervalued her shares and filed suit; she voluntarily dismissed an August 2015 state action and then sued in federal court (including a state-law breach claim).
- The federal district court dismissed all claims for failure to state a claim, concluding Ryan had been paid the JVA-based price; Ryan sought to amend based on newly discovered evidence and appealed.
- The Eighth Circuit affirmed most dismissals but remanded to determine whether the newly discovered evidence warranted reconsideration of the breach-of-contract dismissal.
- On remand the federal court declined to continue exercising supplemental jurisdiction over the breach claim and dismissed it; Ryan refiled in state court in March 2019.
- Sarpy County District Court dismissed the refiling as time-barred, ruling §1367(d) did not toll the limitations period because the federal court allegedly had not exercised supplemental jurisdiction; the Nebraska Supreme Court reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the federal court exercised supplemental jurisdiction over Ryan’s breach claim before dismissing it | Ryan: The federal court had supplemental jurisdiction from the start and retained it until it expressly declined to continue on remand | Streck: Because the Eighth Circuit affirmed dismissal of federal claims, the federal court could not have exercised supplemental jurisdiction over the breach claim on remand | Held: Federal court did exercise supplemental jurisdiction and retained authority until it permissibly declined to continue under §1367(c)(3) |
| Whether 28 U.S.C. §1367(d) tolled the state statute of limitations while the claim was pending in federal court | Ryan: §1367(d) tolls (i.e., stops) the state limitations period during pendency of the federal action | Streck: The federal court’s declination meant §1367(d) did not stop the clock | Held: Under Artis and §1367(d), tolling occurred while the claim was pending in federal court, so the limitations period was suspended and refiling was timely |
| Whether Neb. Rev. Stat. §25-201.01 tolled the limitations period | Ryan: §25-201.01 provides an alternate savings period to refile after dismissal | Streck: Ryan could have refiled within state limitations without relying on §25-201.01; Brodine limits its application | Held: Court did not decide because federal tolling under §1367(d) resolved timeliness; state statute not reached |
| Whether the state court could raise statute-of-limitations sua sponte and dismiss | Ryan: The court erred by raising SOL sua sponte when Streck did not plead it as an affirmative defense | Streck: SOL was apparent on the pleadings; court may consider it | Held: Court declined to decide because §1367(d) tolling made the point moot |
Key Cases Cited
- Artis v. District of Columbia, 138 S. Ct. 594 (2018) (§1367(d) “tolled” means to suspend the state limitations period while federal claim is pending)
- Crest Const. II, Inc. v. Doe, 660 F.3d 346 (8th Cir. 2011) (federal district courts have broad discretion to decline supplemental jurisdiction)
- Glorvigen v. Cirrus Design Corp., 581 F.3d 737 (8th Cir. 2009) (decision to exercise supplemental jurisdiction after federal claims dismissed is discretionary)
- United States v. Rodgers, 461 U.S. 677 (1983) (the word “may” in a statute generally implies discretion)
- Welsch v. Graves, 255 Neb. 62 (Neb. 1998) (when limitations bar is apparent on petition, dismissal for failure to state a claim is proper)
- Kotrous v. Zerbe, 287 Neb. 1033 (Neb. 2014) (elements and nature of a breach-of-contract cause of action)