945 F.3d 915
5th Cir.2019Background
- Allen Stanford ran a Ponzi scheme selling bogus CDs; Pershing provided clearing services to Stanford Group Company.
- Turk v. Pershing, LLC (filed Nov. 18, 2009) was a putative nationwide class action arising from the scheme; some Florida claimants were later narrowed/excluded from the Pershing subclass.
- The Investors (former Turk plaintiffs who did not transfer funds directly through Pershing) sued Pershing in 2013–2015 in federal court asserting indirect fraud and aiding-and-abetting breaches of fiduciary duty under Florida law.
- Both claims carry a four-year Florida statute of limitations; Pershing moved for summary judgment arguing the claims were time-barred and not tolled by Turk.
- The district court held the claims untimely (Turk’s 2009 filing started the limitations period) and denied class-action tolling; the Fifth Circuit affirmed.
- The court held Florida’s tolling statute provides an exclusive list of tolling grounds (not including putative class actions), federal American Pipe tolling does not displace that state rule in this context, and equitable tolling was unavailable for the Turk stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Florida law tolls the statute of limitations for putative class members while a class action is pending | Turk’s filing tolled the Investors’ limitations period; Florida courts recognize class-action tolling | Florida’s §95.051 lists exclusive tolling grounds and does not include putative class actions | Florida law does not toll for putative class members; no Erie basis to create such a rule |
| Whether federal law (American Pipe) governs and tolls limitations in this diversity action | American Pipe supplies a federal equitable tolling rule that should apply in federal court | Byrd/Vaught framework and Florida’s strong legislative interest in its tolling rule mean federal tolling cannot override state statute here | Federal American Pipe tolling does not displace Florida’s statutory rule in this case; federal equitable tolling cannot contravene state statute of limitations policy |
| Whether equitable tolling applies for the period Turk was stayed (Sept 2011–May 2012) | The stay and adverse precedent made filing futile and justify equitable tolling (Machules) | The stay is not a statutory tolling ground; district-court precedent and a stay do not justify equitable tolling here | Equitable tolling not available; Machules is distinguishable and district-court stays do not trigger tolling |
Key Cases Cited
- American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) (federal court-created tolling for class actions under certain equitable circumstances)
- California Pub. Emps. Ret. Sys. v. ANZ Sec., Inc., 137 S. Ct. 2042 (2017) (limits on equitable tolling where statutes of repose apply)
- Byrd v. Blue Ridge Rural Elec. Coop., Inc., 356 U.S. 525 (1958) (federal-state rule conflict analysis used in Erie/Bryd balancing)
- Vaught v. Showa Denko K.K., 107 F.3d 1137 (5th Cir. 1997) (applying Byrd to reject federal tolling where state tolling rule reflected deep state interests)
- Lance v. Wade, 457 So. 2d 1008 (Fla. 1984) (Florida Supreme Court provided narrow relief to decertified class members; not a broad tolling rule)
- Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006) (Florida Supreme Court granted limited equitable benefits to class members after decertification; not a general tolling doctrine)