Amicus Curiae Brief — China Agritech, Inc., Petitioner v. Michael H. Resh, et al.

No. 17-432

IN THE

Supreme Court of the United States

CHINA AGRITECH, INC.,

Petitioner,

v.

MICHAEL H. RESH, ET AL.,

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the Ninth Circuit

BRIEF OF AMICUS CURIAE

PUBLIC CITIZEN, INC.,

IN SUPPORT OF RESPONDENTS

SCOTT L. NELSON

Counsel of Record

ALLISON M. ZIEVE

PUBLIC CITIZEN LITIGATION GROUP

1600 20th Street NW

Washington, DC 20009

(202) 588-1000

snelson@citizen.org

Attorneys for Amicus Curiae

February 2018

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES ........................................ ii

INTEREST OF AMICUS CURIAE ............................. 1

INTRODUCTION AND SUMMARY

OF ARGUMENT ................................................... 2

ARGUMENT ................................................................ 4

I.

All members of the plaintiff class had live claims

when this action was filed. .................................... 4

II. Rule 23 entitles plaintiffs with viable claims to

bring them in a class action if they meet the

Rule’s standards for class certification................. 6

III. This Court’s holding in Shady Grove rests on

basic principles of aggregate litigation and the

Rules Enabling Act. ............................................. 11

IV. The argument against tolling attempts to

resurrect the preclusion arguments rejected by

this Court in Smith v. Bayer. .............................. 14

CONCLUSION ........................................................... 17

ii

TABLE OF AUTHORITIES

Cases:

Page(s)

Amchem Prods., Inc. v. Windsor,

521 U.S. 591 (1997) ................................................. 1

Am. Pipe & Constr. Co. v. Utah,

414 U.S. 538 (1974) ........................................ passim

Amgen Inc. v. Conn. Ret. Plans & Trust Funds,

568 U.S. 455 (2013) ................................................. 1

Artis v. Dist. of Columbia,

138 S. Ct. 594 (2018) ............................................... 6

Brown v. Plata,

563 U.S. 493 (2011) ............................................... 12

California Pub. Employees’ Ret. Sys. v. ANZ Sec., Inc.,

137 S. Ct. 2042 (2017) ............................................. 1

Campbell-Ewald Co. v. Gomez,

136 S. Ct. 663 (2016) ............................................... 1

Chardon v. Fumero Soto,

462 U.S. 650 (1983) ............................................. 5, 6

Crown, Cork & Seal Co. v. Parker,

462 U.S. 345 (1983) ............................. 4, 5, 6, 10, 11

Dart Cherokee Basin Operating Co. v. Owens,

135 S. Ct. 547 (2014) ............................................... 1

Eisen v. Carlisle & Jacquelin,

417 U.S. 156 (1974) ................................................. 5

Erie R.R. Co. v. Tompkins,

304 U.S. 64 (1938) ............................................... 7, 8

Hanna v. Plumer,

380 U.S. 460 (1965) ................................................. 7

iii

Miss. ex rel. Hood v. AU Optronics Corp.,

134 S. Ct. 736 (2014) ............................................... 1

Sawyer v. Atlas Heating & Sheet Metal Works, Inc.,

642 F.3d 560 (7th Cir. 2011) ........................... 15, 16

Shady Grove Orthopedic Assocs. v. Allstate Ins. Co.,

559 U.S. 393 (2010) ........................................ passim

Smith v. Bayer Corp.,

564 U.S. 299 (2011) ........................................ passim

Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp.,

559 U.S. 662 (2010) ............................................... 12

Tyson Foods, Inc. v. Bouaphakeo,

136 S. Ct. 1036 (2016) ................................. 1, 12, 13

Wal-Mart Stores, Inc. v. Dukes,

564 U.S. 338 (2011) ............................................... 13

Statutes and Rules:

15 U.S.C. § 15b ............................................................. 7

Rules Enabling Act,

28 U.S.C. § 2072 .................................... 3, 11, 12, 13

Fed. R. Civ. P. 20 .......................................................... 2

Fed. R. Civ. P. 23 ................................................. passim

Fed. R. Civ. P. 24 .......................................................... 2

INTEREST OF AMICUS CURIAE1

Public Citizen, Inc., is a consumer advocacy organization that appears on behalf of its members and supporters nationwide before Congress, administrative

agencies, and courts on a wide range of issues, and

works for enactment and enforcement of laws protecting consumers, workers, and the public. The enforcement of such laws frequently involves class actions as

well as individual lawsuits. Public Citizen has a

longstanding interest in preserving the viability of

these mechanisms for protecting the rights of consumers and the general public.

Accordingly, Public Citizen has participated as amicus curiae, and its attorneys have served as counsel to

parties or amici curiae, in many cases in this Court and

other federal courts involving class action procedures,

including: California Pub. Employees’ Ret. Sys. v. ANZ

Sec., Inc., 137 S. Ct. 2042 (2017); Tyson Foods, Inc. v.

Bouaphakeo, 136 S. Ct. 1036 (2016); Campbell-Ewald

Co. v. Gomez, 136 S. Ct. 663 (2016); Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (2014); Miss.

ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736

(2014); Amgen Inc. v. Conn. Ret. Plans & Trust Funds,

568 U.S. 455 (2013); Smith v. Bayer Corp., 564 U.S. 299

(2011); and Amchem Prods., Inc. v. Windsor, 521 U.S.

591 (1997).

Of particular relevance here, Public Citizen’s counsel represented the petitioner in Shady Grove Orthopedic Associates v. Allstate Insurance Co., 559 U.S. 393

––––––––––––––––––––––––

This brief was not authored in whole or part by counsel for

a party. No one other than amicus curiae made a monetary contribution to preparing or submitting it. The parties participating

in this Court have filed blanket consents to filing of amicus briefs.

1

2

(2010), in which the Court held that plaintiffs who satisfy the terms of Federal Rule of Civil Procedure 23 are

entitled to pursue their claims through a class action.

Public Citizen submits this brief to explain how Shady

Grove and the principles that underlie it compel the

conclusion that plaintiffs who possess live claims by

virtue of the tolling effect of a prior class action may

pursue those claims as a class if they are able to demonstrate that the class satisfies Rule 23’s requirements

for class certification.

INTRODUCTION AND SUMMARY OF

ARGUMENT

When this action was filed, all members of the proposed class undisputedly possessed live securities fraud

claims against petitioner China Agritech because the

running of the statute of limitations on those claims

had been suspended during the pendency of a previous

class action under the rule of American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974). Under this

Court’s holding in Smith v. Bayer Corp., 564 U.S. 299

(2011), the class members were not bound by any prior

ruling that their claims could not be brought as a class

action. And no considerations of comity suggested that

certification of the class was unwarranted, because no

court had ever considered whether the showing they

proposed to make was sufficient under Rule 23 to justify class certification.

Nonetheless, China Agritech argues that members

of the class, plaintiffs here, could pursue their claims

only individually, whether by filing separate actions,

joining their individual claims under Rule 20, or intervening under Rule 24 in an action brought by other individual class members. Of the procedural mechanisms

potentially available under the Federal Rules of Civil

3

Procedure for asserting such claims, China Agritech

asserts, only the class action procedures of Rule 23 are

unavailable to these plaintiffs, regardless of whether

they would otherwise satisfy the Rule’s requirements.

China Agritech’s submission is fundamentally at

odds with the terms of Rule 23, the nature of the aggregate litigation the Rule permits, and basic principles governing the effect of procedural rules promulgated under the Rules Enabling Act. As this Court held

in Shady Grove Orthopedic Associates v. Allstate Insurance Co., 559 U.S. 393 (2010), the terms of Rule 23 entitle plaintiffs to bring their claims as a class action in

federal court if they satisfy the Rule’s criteria for certification of a class. Moreover, the remedy any one

plaintiff is entitled to receive on an otherwise viable

claim cannot depend on whether the claim is pursued

in an individual action or a class action: A class action

is a procedural device for aggregating claims that plaintiffs possess individually and can neither expand nor

limit their entitlement to relief. Indeed, holding that

whether a plaintiff has a claim for relief depends on

whether relief is sought under Rule 23, in an individual

action, or in another form of aggregate litigation permitted under the Federal Rules of Civil Procedure

would be incompatible with the Rules Enabling Act’s

command that rules of procedure “shall not abridge,

enlarge or modify any substantive right.” 28 U.S.C.

§ 2072(b).

Moreover, the proposition that plaintiffs may not

rely on American Pipe tolling in a subsequent class action threatens to reintroduce through the back door

the proposition the Court rejected in Smith v. Bayer—

namely, that plaintiffs are precluded from pursuing

claims as a class by previous decisions rejecting class

4

certification in cases in which they were not named

plaintiffs. Smith held that foreclosing plaintiffs from

seeking class certification because another plaintiff’s

effort to represent a class had failed would be contrary

to fundamental principles governing the preclusive effects of judgments. Here, China Agritech seeks essentially the same result through another means—one

that is equally incompatible with fundamental jurisprudential principles.

ARGUMENT

I.

All members of the plaintiff class had live

claims when this action was filed.

Under this Court’s holdings in American Pipe and

Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983),

which China Agritech does not question, each member

of the proposed class in this case had a live claim when

this action was filed. Accordingly, under the terms of

both Rule 23 and the fundamental principle that a class

action under the federal rules does not—and cannot—

change the substantive entitlements of class members,

the class members may pursue their claims in a class

action if the requirements of Rule 23 are met.

American Pipe establishes two propositions central

to this case: that “the filing of a timely class action

commences the action for all members of the class as

subsequently determined,” 414 U.S. at 550, and that

“the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the

suit been permitted to continue as a class action,” id.

at 554. Although American Pipe considered only

whether the tolling effect of a proposed but ultimately

uncertified class action rendered subsequent motions

by class members to intervene in that action timely, see

5

id. at 553, the Court soon recognized that its reasoning

could not be confined to such cases. In Eisen v. Carlisle

& Jacquelin, decided the same Term as American Pipe,

the Court recognized that plaintiffs who might opt out

of a certified class after the time the statute of limitations otherwise would expire had timely claims because

American Pipe “established that commencement of a

class action tolls the applicable statute of limitations as

to all members of the class.” 417 U.S. 156, 176 n.13

(1974).

Crown, Cork confirmed that the holding of American Pipe “is not to be read so narrowly” as to apply only

to the particular procedural circumstances it addressed. 462 U.S. at 350. Rather, Crown, Cork held,

“[t]he filing of a class action tolls the statute of limitations ‘as to all asserted members of the class.’” Id.

(quoting American Pipe, 414 U.S. at 554); see also id.

at 353–54. Moreover, “[o]nce the statute of limitations

has been tolled, it remains tolled for all members of the

putative class until class certification is denied.” Id. at

354.

In Chardon v. Fumero Soto, the Court again confirmed that a federal class action “toll[s] the statute of

limitations until class certification is denied.” 462 U.S.

650, 661 (1983). That is, “the statute of limitations

ceases to run,” id. at 652 n.1, during the period in

which the action is pending as a class action or potential class action.2

––––––––––––––––––––––––

Crown, Cork and Chardon both concerned plaintiffs who

filed individual actions after the failure of certification of the class

actions they relied on for tolling. The occasional references of the

Court in both cases to “individual actions” refer to the procedural

posture of the cases; they do not purport to impose a limit on the

(Footnote continued)

2

6

The necessary consequence of these holdings is

that, once tolling ceases, each class member who possessed a live claim at the time the class action was filed

continues to have a live claim until whatever time remains under the statute expires. The claims of each

class member may be asserted until that time runs out.

See id. at 661.3

II. Rule 23 entitles plaintiffs with viable

claims to bring them in a class action if

they meet the Rule’s standards for class

certification.

The filing of a class-action complaint within the

time remaining under the applicable limitations period, no less than the filing of an individual action or

––––––––––––––––––––––––

type of action a beneficiary of American Pipe tolling may later

bring. Notably, in stating the rule they applied, both Crown, Cork

and Chardon said that a plaintiff whose claim is timely because of

the tolling effect of a class action that is ultimately not certified

may either intervene in that action or bring a “separate” action,

Crown, Cork, 462 U.S. at 352; Chardon, 462 at 661 n.14—i.e., an

action separate from the original class action. Neither decision

suggests that the separate action could not be a class action.

3

In this case and most other instances involving federal

claims with federally defined limitations periods, the time remaining will consist of the statutory limitations period less whatever

time ran on it before it was suspended by the filing of a class action. See Crown, Cork, 462 U.S. at 354; American Pipe, 414 U.S.

at 561; cf. Artis v. Dist. of Columbia, 138 S. Ct. 594, 601 (2018)

(describing the ordinary effect of tolling or suspending a limitations period as “that the limitations period is suspended (stops

running) while the claim is sub judice elsewhere, then starts running again when the tolling period ends, picking up where it left

off”). In some cases, however, when a federal statute borrows

state limitations law, the amount of time remaining may be determined differently. See Chardon, 462 at 661–62. In either event,

each class member’s claim remains timely for the full remaining

time established by the applicable law.

7

an attempt to intervene in an existing suit, satisfies the

statute of limitations for class members who have live

claims by virtue of the tolling effect of a previous action. This consequence follows from American Pipe’s

holding that “the filing of a timely class action commences the action for all members of the class as subsequently determined.” 414 U.S. at 550. That the reason class members have live claims is the tolling effect

of a prior action does not alter the conclusion that the

statute of limitations is satisfied by commencement of

an action properly asserting those claims within the

time remaining in a limitations period. Indeed, in

American Pipe itself, the class action whose filing tolled

the limitations period for the claims of class members

was itself timely only because of the tolling effect of an

action previously filed by the United States asserting

the same claims. See American Pipe, 414 U.S. at 541–

42 (citing 15 U.S.C. § 15b).

China Agritech argues that a class action, alone

among the procedural mechanisms for asserting a

claim in federal court, is an impermissible vehicle for

bringing claims that are live because of the tolling effect of a prior class action. That argument is irreconcilable with this Court’s construction of Rule 23 in Shady

Grove and with the basic principles on which that decision rests.

Shady Grove addressed whether, in an action filed

in federal court, Rule 23 allowed a plaintiff to assert

certain state-law claims in a class action when, under

state law, the same claims (for statutory penalties)

could not be the subject of a class action in a state

court. Before addressing the consequences of possible

conflict between state and federal law under Hanna v.

Plumer, 380 U.S. 460 (1965), and Erie Railroad Co. v.

8

Tompkins, 304 U.S. 64 (1938), the Court first had to

determine whether a conflict existed. That question depended on whether Rule 23’s terms entitled the plaintiff to proceed with a class action in federal court if the

case satisfied the Rule’s criteria for certification of a

class.

On the latter question, Shady Grove held, Rule 23

spoke unequivocally:

[Rule 23] states that ‘[a] class action may be

maintained’ if two conditions are met: The suit

must satisfy the criteria set forth in subdivision

(a) (i.e., numerosity, commonality, typicality,

and adequacy of representation), and it also

must fit into one of the three categories described in subdivision (b). Fed. Rule Civ. Proc.

23(b). By its terms this creates a categorical rule

entitling a plaintiff whose suit meets the specified criteria to pursue his claim as a class action.

559 U.S. at 398.

“[W]hat Rule 23 does,” in other words, is “empower[] a federal court ‘to certify a class in each and

every case’ where the Rule’s criteria are met.” Id. at

399. Because the Rule provides that “if the prescribed

conditions are satisfied, ‘[a] class action may be maintained,’” id. at 399–400 (quoting Rule 23; emphasis by

the Court), it follows that if a plaintiff has a claim, and

it meets the Rule’s requirements, “[h]e may bring his

claim in a class action if he wishes.” Id. at 400. And

because “Rule 23 automatically applies ‘in all civil actions and proceedings in the United States district

courts,’” id. (emphasis original, citation omitted), it

follows that “Rule 23 unambiguously authorizes any

plaintiff, in any federal civil proceeding, to maintain a

9

class action if the Rule’s prerequisites are met.” Id. at

406 (emphasis original).4

The dissent in Shady Grove, while disagreeing with

the majority on how to reconcile the commands of state

and federal law at issue in the case, agreed on the point

most relevant here: that “Rule 23 describes a method

of enforcing a claim for relief,” and “authorizes class

treatment for suits satisfying its prerequisites.” Id. at

447 (Ginsburg, J., dissenting). The dissent saw no conflict between this authorization and the New York law

at issue because it viewed the latter as a substantive

limit on the claims of members of the class rather than

as a prohibition on the use of Rule 23 to pursue claims

available as a matter of substantive law through the

class mechanism. Id. at 447–48. In a case, like this one,

where the claims rest on federal law, the dissenting

view of Rule 23 leads to the same result as the majority’s: Unless Congress has provided otherwise, see id.

at 400 (majority); id. at 450 (dissent), plaintiffs who

have actionable claims may pursue them in a class action if they satisfy the requirements of the Rule, see id.

at 398 (majority); id. at 447 (dissent).

Thus, for purposes of this case, the critical teaching

of Shady Grove, reflected in both the majority and dissenting opinions, is that if a class of plaintiffs possess a

common claim and if they otherwise meet the requirements of Rules 23(a) and (b)—a point not at issue at

––––––––––––––––––––––––

The cited passages from Shady Grove reflect the holding of

a five-Justice majority. In explaining why federal law as reflected

in Rule 23 prevailed over the state rule (an issue not pertinent

here), the lead opinion commanded only four votes, with Justice

Stevens concurring on that point in an opinion offering a somewhat different analysis. See id. at 416 (Stevens, J., concurring in

part and concurring in the judgment).

4

10

this stage in this action—they are entitled to assert

their claims in a class action. Id. at 398 (majority).

Here, the limitations period for the claims of each

member of the class was tolled during the pendency of

a previous class action. Once that tolling ceased, each

member had a live claim for the duration of the time

remaining under the statute of limitations, which had

not expired when this action was commenced. Because

a timely claim could be stated on behalf of each member of the class, it would violate Rule 23 as construed

in Shady Grove to prohibit the assertion of those claims

on behalf of a class.

China Agritech insists that Shady Grove is inapplicable because it “did not mention tolling,” Pet. Br. 15,

and “had nothing to do with equitable tolling,” Pet. Br.

51. Of course, Shady Grove itself was not a case about

tolling, but it was about Rule 23. And Shady Grove’s

holding that Rule 23 “creates a categorical rule entitling a plaintiff whose suit meets the specified criteria

to pursue his claim as a class action,” 559 U.S. at 398,

dictates the outcome here. China Agritech’s position

that plaintiffs with live claims may pursue them

through any otherwise applicable procedure except for

a Rule 23 class action contradicts that categorical rule.

China Agritech nonetheless asserts that “Shady

Grove simply does not require or even authorize courts

to toll statutory time bars in [these] circumstances.”

Pet. Br. 52. But the question is not whether Shady

Grove authorizes tolling. Under this Court’s holdings

in American Pipe and Crown, Cork, the running of the

statute of limitations was already tolled for all class

members during the pendency of the earlier class action. As Crown, Cork held, it is “[t]he filing of a class

action” that “tolls the statute of limitations ‘as to all

11

asserted members of the class.’” 462 U.S. at 350 (quoting American Pipe, 414 U.S. at 554). Moreover, tolling

lasted “for all members of the putative class until class

certification [was] denied.” Id. at 354. Tolling then

ceased, and the statute of limitations began to run. And

the parties agree on that point.

Thus, the question now is not whether to give some

additional tolling effect to a prior class action: tolling

began and ended with the earlier class actions. The

question now is only whether the claims the class members concededly retained by virtue of the now-completed period of tolling were properly asserted by filing

a class action within the time remaining. Shady

Grove’s holding that cognizable claims may be brought

and maintained in a class action if the terms of Rule 23

are satisfied supplies the answer to that question: Because it was proper to assert the claims of the class

members under Rule 23, the filing of a class action

within the limitations period commenced a timely action for all of them. See American Pipe, 414 U.S. at 550.

III. This Court’s holding in Shady Grove rests

on basic principles of aggregate litigation

and the Rules Enabling Act.

China Agritech’s position that a plaintiff with a live

claim can pursue it in an individual action, or through

intervention or joinder, but not through a class action

is not only at odds with Shady Grove and the terms of

Rule 23, but also with fundamental principles of aggregate litigation and the Rules Enabling Act. China

Agritech’s position boils down to the assertion that an

individual’s entitlement to relief is different inside and

outside of a class action. That is, under China

Agritech’s view, a plaintiff in an individual action

would have a timely claim, but the same plaintiff may

12

not assert the same timely claim as part of a class action.

That proposition contravenes “the bedrock rule

that the sole purpose of classwide adjudication is to aggregate claims that are individually viable.” Brown v.

Plata, 563 U.S. 493, 552 (2011) (Scalia, J., dissenting).

A Rule 23 class action is a vehicle that, where the

Rule’s criteria are satisfied, allows aggregate pursuit of

the claims of a class encompassing anyone who could

“bring a freestanding suit asserting his individual

claim.” Shady Grove, 559 U.S. at 408 (plurality). Class

actions “leave[] the parties’ legal rights and duties intact and the rules of decision unchanged.” Id. They

“neither change plaintiffs’ separate entitlements to relief nor abridge defendants’ rights; they alter only how

the claims are processed.” Id.5 Thus, a plaintiff’s right

to recovery cannot depend on whether the plaintiff asserts it in a class action or an individual action. See Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1046–

48 (2016).

The principle, recognized by this Court, that the

substantive rights of individual plaintiffs are the same

whether asserted in a class action or an individual action flows directly from the Rules Enabling Act’s prohibition on the promulgation of procedural rules that

alter substantive rights. “In the Rules Enabling Act,

Congress authorized this Court to promulgate rules of

procedure subject to its review, 28 U.S.C. § 2072(a),

but with the limitation that those rules ‘shall not

abridge, enlarge or modify any substantive right,’

––––––––––––––––––––––––

Although the quoted language above is from the plurality

portion of Shady Grove, the point was subsequently endorsed in

Justice Ginsburg’s dissenting opinion in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 559 U.S. 662, 696 (2010).

5

13

§ 2072(b).” Shady Grove, 559 U.S. at 406–07 (plurality). As the Court observed in Wal-Mart Stores, Inc. v.

Dukes, “the Rules Enabling Act forbids interpreting

Rule 23 to ‘abridge, enlarge or modify any substantive

right.’” 564 U.S. 338, 367 (2011).

Inclusion in a class action thus neither confers substantive rights on a plaintiff nor takes them away. If a

plaintiff could pursue a claim individually but not in a

properly certified class, Rule 23 would “abridge … [a]

substantive right” in violation of the Rules Enabling

Act. 28 U.S.C. § 2072(b) (emphasis added). Accordingly, in Tyson Foods, the Court held that a judicial

ruling that would limit a plaintiff’s substantive right to

prove her case “merely because the claim is brought on

behalf of a class” would “ignore the Rules Enabling

Act’s pellucid instruction that use of the class device

cannot ‘abridge … any substantive right.’” 136 S. Ct.

at 1046.6 See also Shady Grove, 559 U.S. at 408 (plurality opinion); id. at 422 (Stevens, J., concurring); id.

at 438 (Ginsburg, J., dissenting).

Simply put, it would “violate[] the Rules Enabling

Act [to] giv[e] plaintiffs and defendants different rights

in a class proceeding than they could have asserted in

an individual action.” Tyson Foods, 136 S. Ct. at 1048.

China Agritech’s position would do just that.

––––––––––––––––––––––––

The dissent in Tyson Foods agreed with the majority that

the substantive claims of individual class members should not differ depending on whether they are asserted in a class or individual

action. See id. at 1057 (Thomas, J., dissenting) (citing 136 S. Ct.

at 1046–47 (majority)).

6

14

IV. The argument against tolling attempts to

resurrect

the

preclusion

arguments

rejected by this Court in Smith v. Bayer.

Much of China Agritech’s argument rests on the notion that the Court should abandon the principle that

plaintiffs with viable claims may pursue them in either

an individual or class action because application of that

principle here would lead to “relitigation” of previous

decisions denying class certification. E.g., Pet. Br. 22–

23. Relitigation, however, is a concern addressed by

preclusion doctrines that determine when parties are

bound by former adjudications. And this Court has already held, without dissent, that the denial of certification in a prior case does not preclude individuals

other than the named plaintiff from seeking class certification in a subsequent case. Smith v. Bayer, 564

U.S. at 312–18.

Smith v. Bayer holds unequivocally that, under

“longstanding principles of preclusion,” id. at 318,

when certification is denied in a case, absent class

members are not bound by the adjudication of the certification issue. Rather, class members other than the

named plaintiff can be bound by adjudication of an issue in a class action only if the action is certified, because the very point of certification is to determine

whether it is fair to bind absent parties to an adjudication. Id. at 314–15. When a court holds that an action

may not be maintained as a class action, the essential

“precondition” for binding an absent class member to

any adjudication in the action—including the adjudication of the certification issue itself—is absent. Id. at

315. Thus, “[n]either a proposed class action nor a rejected class action may bind nonparties.” Id.

15

China Agritech’s argument attempts an end-run

around Smith v. Bayer by applying another label (tolling) to what it acknowledges is actually preclusion of

“relitigation” of certification decisions. As explained

above, however, this approach violates fundamental

class-action principles—in particular, the principle

that plaintiffs have the same substantive rights

whether their claims are pursued on an individual or

class basis—just as much as the preclusion-based approach rejected in Smith v. Bayer. Similarly, the policy

argument China Agritech invokes to cover the legal deficiencies of its position is the same one rejected in

Smith v. Bayer: namely, that the consequence of applying normal class action doctrines would allow “class

counsel [to] repeatedly try to certify the same class ‘by

the simple expedient of changing the named plaintiff

in the caption of the complaint.’” Id. at 316. That policy

argument is no more a reason to distort the Shady

Grove principle that a plaintiff with a valid individual

claim can assert it on behalf of a class that satisfies

Rule 23 than it was for turning standard preclusion

principles upside down in Smith v. Bayer.

That the argument against reliance on American

Pipe tolling in a successive class action is in essence a

recycling of the preclusion approach rejected in Smith

v. Bayer is demonstrated by the fact that nearly all of

the lower-court decisions rejecting tolling in successive

class actions before Smith rested either explicitly or

implicitly on preclusion principles. As Judge Easterbrook explained in Sawyer v. Atlas Heating & Sheet

Metal Works, Inc., 642 F.3d 560 (7th Cir. 2011), those

decisions were based on what was then thought to be

“the preclusive effect of a judicial decision in the initial

suit applying the criteria of Rule 23.” Id. at 563. They

reflected the view “that a decision declining to certify

16

a class in the first suit binds all class members, who

cannot try to evade that decision by asking for a second

opinion from a different judge.” Id. at 563–64. In other

words, their premise was that “[c]lass members must

abide by the first court’s understanding and application of Rule 23.” Id. at 564. And because the decisions

were fundamentally about preclusion, they permitted

successive class actions where the reasons for the prior

denial of certification were not “applicable” to the later

suit, id.—an approach similar to China Agritech’s

fallback argument, see Pet. Br. 54–59.7

As China Agritech itself acknowledges, Smith v.

Bayer pulled the rug out from under such explicitly or

implicitly preclusion-based approaches. See Pet. Br.

47–48. What China Agritech fails to realize, however,

is that manipulating the American Pipe rule to resurrect a bar on successive class actions when “the propriety of class treatment has been previously adjudicated,” Pet. Br. 54, equally fails to square with Smith’s

holding that principles of “former adjudication” do not

permit that result. 564 U.S. at 302.

In sum, the holding of Smith v. Bayer combines

with that of Shady Grove, and the principles underlying it, to compel rejection of China Agritech’s view that

a class action brought by plaintiffs whose claims were

tolled by a prior, ultimately uncertified class action is

impermissible. If an individual named plaintiff has

timely claims, Shady Grove permits her to pursue them

in a class action together with other plaintiffs with like

claims, if Rule 23’s criteria are satisfied. And Smith v.

––––––––––––––––––––––––

Because no court has ever ruled on whether the proposed

showing of the plaintiffs in this action would support certification,

China Agritech’s fallback argument would be unavailing here, see

Resp. Br. 50–51, even if it were legally sustainable.

7

17

Bayer forecloses the possibility that the named plaintiff’s attempt to satisfy Rule 23’s certification criteria

can be precluded by the outcome of a prior case in

which another plaintiff did not succeed in obtaining

certification of a class.

In this case, the proposed class consists of members

who had live claims when the action was brought. None

of those class members was bound by any decision

holding that the proposed class action could not proceed. Indeed, no court has ever reached a decision on

their entitlement to class certification that would be

persuasive under principles of comity. Under these circumstances, Rule 23 entitles the plaintiffs to proceed

as a class if they can meet their burden of proving that

the action satisfies the Rule’s criteria for class certification.

CONCLUSION

The judgment of the court of appeals should be affirmed.

Respectfully submitted,

SCOTT L. NELSON

Counsel of Record

ALLISON M. ZIEVE

PUBLIC CITIZEN LITIGATION GROUP

1600 20th Street NW

Washington, DC 20009

(202) 588-1000

snelson@citizen.org

Attorneys for Amicus Curiae

February 2018