# Opposition Brief — Vaught v. Showa Denko K. K.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1997
- **Citation:** 522 U.S. 817

## Text

—————

—_,_

No. 96-1951 VC / Supreme Court, U.S.
E D

IN THE

Supreme Court of the United Siytes,. CLERK |

OCTOBER TERM, 1996 —

JANET L. VAUGHT, ALAN VAUGHT,
and MITCHELL VAUGHT,
. Petitioners,
SHOWA DENKO, K.K.; SHOWA DENKO AMERICA, INC.;
LEINER HEALTH PRODUCTS, INC.; PHAXMATIVE CORP.;
GENERAL NUTRITION, INC.; GENERAL NUTRITION CORP.;
GENERAL NUTRITION Props., INC.;
WALGREEN Co.; and ECKERD HoLpInGs II, INc.,
Respondents.

On Petition for Writ of Certiorari to the
United States Court of Appeals
for the Fifth Circuit

RESPONDENTS SHOWA DENKO, K.K.
AND SHOWA DENKO AMERICA, INC.’S
BRIEF IN OPPOSITION

SARA D. SCHOTLAND ROWLAND FOSTER

Counsel of Record STRASBURGER & PRICE, L.L.P.
CLEARY, GOTTLIEB, STEEN 901 Main Street, Suite 4300

& HAMILTON Dallas, Texas 75202
1752 N Street, N.W. (214) 651-4300
Washington, D.C. 20036
(202) 728-2700

Attorneys for Respondents
Showa Denko K.K. and Showa Denko America, Inc.

sine
WILSON - Epes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTION PRESENTED

Whether the court of appeals correctly applied state
law to hold that the statute of limitations applicable to a
personal injury claim was not tolled by the filing of a
nationwide class action in federal court.

ii
RULE 29.6 STATEMENT

Respondent Showa Denko K.K. has no parent corpora-
tion and directly or indirectly controls the following non-
wholly owned subsidiaries: Fuyo Perlight K.K., Hitool
(S) Pte Ltd., Hokkaido Industrial Gases Co., Ltd., Hy-
mold (Pte) Ltd., Hymold (Thailand) Ltd., Japan Polyole-
fins Co., Ltd., Japan Polypropylene Co., Ltd., K.K.
Toyama Air Supply, Kosai Auto Gas K.K., Kyodo Light
Metal Trading Co., Ltd., Nagoya Kenmazai Kogyo K.K.,
Niigata Showa, Pacific Hydrogen Co., Ltd., P.T. Hymold
(Indonesia), SD Gas Sales Kabushiki Kaisha, Shotic Cor-
poration, Shotic (Singapore) Pte Ltd., Shotic America
Corporation, Showa Aluminum Corp., Showa Aluminum
Corporation of America, Showa Aluminum Powder K.K..,
Showa Denko Air Products Co., Ltd., Showa Denko Car-
bon, Inc., Showa Distribution K.K., Showa Engineering
Co., Ltd., Showa Financing K.K., Shunan Denko K.K..,
Sunny Homes K.K., Taiwan Chao Yang Chemical Co.,
Ltd., and Tokuyama Petrochemical Co., Ltd.

Respondent Showa Denko America, Inc.’s parent cor-
poration is Showa Denko K.K. It has no subsidiaries.

LIST OF OTHER INTERESTED PARTIES

In addition to Respondents Showa Denko K.K. and
Showa Denko America, Inc., on whose behalf this brief
is filed, other interested parties include the Petitioners
(Janet, Alan and Mitchell Vaught) and the additional
Respondents in this case, who are correctly identified in
the caption. Sara D. Schotland of Cleary, Gottlieb, Steen
& Hamilton, and Rowland Foster of Strasburger & Price,
L.L.P. are counsel of record for Showa Denko K.K. and
Showa Denko America, Inc., and Mr. Foster is counsel
of record as well for the additional Respondents.

TABLE OF CONTENTS

Page
i 5 8) Be spy |) al i
Be BN EE nce voccnnsecscosapoccocencesessscccncesconsees ii
LIST OF OTHER INTERESTED PARTIES ............. ii
ep) FM by 8 6 yy gee iv
RE ST EE AI IN EN a 1
EEE A ee ee eee ee 2
fe Se ps ie | oo): i cea 2
A. Statement of Facts and Proceedings .................... 2
B. The American Pipe Doctrine ................................ 4
C. The Court of Appeals’ Decision .......................... 5
REASONS FOR DENYING THE WRIT ...........-...0...0... 6
I. THE FIFTH CIRCUIT’S OPINION DOES
NOT CONFLICT WITH OTHER COURTS OF
APPEALS DECISIONS, NOR IS IT CON-
TRARY TO THIS COURT’S DECISION IN
SI oes sacs acandnsneeccenecennes 6
A. There Is No Conflict Among The Circuits...... 6
B. The Fifth Circuit’s Decision Does Not Conflict
os lidcibanmens 7
Il. THE COURT OF APPEALS’ DECISION IS
i a auinieeh asinine 10
A. Under Erie, Federal Courts Sitting In Diver-
sity Must Apply State Statutes Of Limita-
tions, Including Tolling Rules ............00000000... 10
B. Other L-Tryptophan Cases Support The
8 SSE en ee 14
a sed auiohidinnidenanndiconse 16
(iii)

iv

TABLE OF AUTHORITIES

Cases: Page

Adams Pub. Sch. Dist. v. Asbestos Corp., Ltd., 7

Pea FET. CBR Cie, TODD ccnaissicccbccdaicastedctcte 6, 7
American Pipe & Constr. Co. v. Utah, 414 U.S. 538

CTPEGD nvsschinicithycjainictlosslaihatiscbesdhes babies tuihledenpniticadedataicaahhe passim
Barela v. Showa Denko K.K., No. Civ. 938-1469,

1996 U.S. Dist. LEXIS 7830 (D.N.M. Feb. 28,

RRS se CES MERE CAC ORT Me Rania ON ea aa 15
Becker v. McMillin Constr. Co., Inc., 277 Cal. Rptr.
GBA CORR. GAR, BR RED Seidereectcesiceccsssctreecostatrenn< 18, 14
Bell v. Showa Denko K.K., 899 S.W.2d 749 (Tex.
App.—Amarillo 1995, writ denied) ...................... passim
Board of Regents v. Tomanio, 446 U.S. 478 (1980) .. 10, 11,
12
Carter v. Washington Metro. Area Transit Auth.,
yi 7 OSE | Fei kee Re: 5 Ree 15
Chardon v. Fumero Soto, 462 U.S. 650 (1983) ........ 4
Cook v. G.D. Searle & Co., Inc., 759 F.2d 800 (10th
Ci - Wiicnchocason cette erenaeee eee cdisdiceons 12
Crown, Cork & Seal v. Porter, 462 U.S. 345
CRD siiiesi aici bi ae ibid bias acs 4,12
Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) ........ 7
Ganousis v. E.IJ. du Pont de Nemours & Co., 803
F. Supp. 140 (NLD. Tih 26GB) city-based) 9
Grant v. Austin Bridge Constr. Co., 725 S.W.2d 366
(Tex. App.—Houston 1987, no writ) .......... Ahmet 5,12
Guaranty Trust Co. v. York, 326 U.S. 99 (1945).... 11
Hanna v. Plumer, 380 U.S. 460 (1965) -.................. 11

In re “Agent Orange” Prod. Liab. Litig., 818 F.2d
210 (2nd Cir. 1987), cert. denied, 484 U.S. 1004

SY iaiieincticai et 11, 15
In re School Asbestos Litig., 789 F.2d 996 (3d

Cir.), cert. denied, 479 U.S. 852 (1986) ...-........... 12
In re Three Mile Island Litig., 87 F.R.D. 433 (M.D.

E.R PS Fone TL 12
Jolly v. Eli Lilly & Co., 751 P.2d 923 (1988) -_....... passim
Kennedy v. Showa Denko K.K., No. Civ. 94-312 (M)

eh 8 a gg RRR CRC eres ener 14

Rapoport v. Showa Denko America Inc., No. JH-
90-518 (D. Md. filed Feb. 18, 1990) .................... 3,9

SS

Vv

TABLE OF AUTHORITIES—Continued
Page
Sarnoff v. American Home Prods. Corp., 798 F.2d
1075 (7th Cir. 1986) ...... a 13
Sawtell v. E.I. du Pont de Nemours & Co., Inc., 22
F.3d 248 (10th Cir.), cert. denied, 513 U.S. 917

0) BRAEMAR erat iii Sviabin EAST IAD pene 6, 7
United Airlines, Inc. v. McDonald, 482 U.S. 385
EN A slices icine tipinaaeieiecal be cia daniuaiaabaniieeiaanes 5
Vaught v. Showa Denko K.K., 107 F. 8d 1187 (5th
tN BUT SERGE ALES 0 h8 A Me oe: oS) EE ION 1, 5
Walker v. Armco Steel Corp., 446 U.S. 740
i —___RRNSUER SE OIE ese rea rOetu hawstscidey emer AT HE NON ern ea 8, 10, 11
Whall v. Showa Denko K.K., No. 635307 (Cal.
ne: EOE, GHAR TID. RED ccincivevecticinietnsicinscinintncnnsie 14
Wilson v. Garcia, 471 U.S. 261 (1985) -..............2... 10
Statutes:
N.D. Cert. Code $28.01 (1906) ..2...2.......0c..ccsccceseeees 7
Rules:
I od 2 sae ciateleadiaeapliombinden 8,8
MISCELLANEOUS:

Mitchell A. Lowenthal & Norman M. Feder, The
Impropriety of Class Action Tolling for Mass
Tort Statutes of Limitations, 64 Geo. Wash. L.
ee IE eck peckeses dicaeinhieiacbatedheatistcklidetescoinns 11
Charles A. Wright, Arthur R. Miller, & Mary K.
Kane, Federal Practice and Procedure (2d ed.
MUNI Soiics, 2052s cderctnoepidosseo ce dausdete tie aintongs aveaamaenialedeaen 9

i A A tA A OO I OS OOO

In THE

Supreme Court of the United Staten

OCTOBER TERM, 1996

No. 96-1951

JANET L. VAUGHT, ALAN VAUGHT,
and MITCHELL VAUGHT,

: Petitioners,

SHOWA DENKO, K.K.; SHowa DENKO AMERICA, INC.;
LEINER HEALTH PRODUCTS, INC.; PHARMATIVE Corp.;
GENERAL NUTRITION, INC.; GENERAL NUTRITION CorP.;
GENERAL NUTRITION Props., INC.;
WALGREEN Co.; and EcCKERD Ho.pinGs II, Inc.,

Respondents.

On Petition for Writ of Certiorari to the
United States Court of Appeals
for the Fifth Circuit

RESPONDENTS SHOWA DENKO, K.K.
AND SHOWA DENKO AMERICA, INC’S
BRIEF IN OPPOSITION

Respondents Showa Denko K.K. and Showa Denko
America, Inc. hereby oppose the writ of certiorari filed by
Petitioners Janet L. Vaught, et al.

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1-33)
is reported at 107 F.3d 1137 (Sth Cir. 1997). The
opinion of the district court (Pet. App. 41-60) is not
reported or available on Westlaw or LEXIS.

2

JURISDICTION

The judgment of the court of appeals was entered on
March 10, 1997. A petition for rehearing was denied on
April 8, 1997. (Pet. App. at 34-35.) The petition for
writ of certiorari was filed on June 9, 1997. The juris-
diction of this Court is invoked under 28 U.S.C.
§ 1254(1).

STATEMENT OF THE CASE

Petitioners seek review of the court of appeals’ decision
which, in applying Texas law, determined that the Texas
statute of limitations applicable to personal injury claims
is not tolled by the filing of a nationwide class action in
federal court in another state.

A. Statement of Facts and Proceedings.

Petitioners filed suit in Texas state court on April 28,
1993. Respondents removed the action to the United
States District Court for the Southern District of Texas,
Houston Division. (Pet. App. at 6.) In June 1994, the
Panel on Multidistrict Litigation ordered the transfer of
the case to the United States District Court for the District
of South Carolina, for pre-trial consolidation with the
nationwide L-Tryptophan litigation pending there (MDL
No. 865). (/d.) In September 1995, the case was re-
manded from the South Carolina court to the District
Court for the Southern District of Texas for further pro-
ceedings and trial. (/d.) The respondents later moved for
summary judgment on limitations grounds. (/d.) The dis-
trict court granted respondents’ motion for summary judg-
ment on limitations grounds and that decision was af-
firmed by a panel of the United States Court of Appeals
for the Fifth Circuit on March 10, 1997.

On appeal, the Fifth Circuit was called upon to address
two state law issues involving the interpretation of Texas’
statute of limitations: a question related to application

3

of the discovery rules (not presented in the instant peti-
tion for certiorari) and the question of whether under
Texas law, the filing of a putative class action by a Mary-
land resident tolled the statute of limitations for Petition-
ers’ state court personal injury claim.

In an L-Tryptophan case filed in Maryland, see Rapo-
port v. Showa Denko America Inc., No. JH-90-518 (D.
Md. filed Feb. 13, 1990), a motion was made for certifi-
cation of a class. Certification of that class was denied by
the MDL Judge to whom the case was transferred—the
Honorable Matthew Perry, D.S.C. Columbia Division—
on January 6, 1992. (Pet. at 5.) Petitioners rely on
American Pipe & Constr. Co. v. Utah, 414 U.S. 538
(1947), a federal antitrust action, to argue that the limi-
tations period was tolled during the time period during
which the motion for class certication was pending in the
Rapoport case. Federal courts sitting in diversity are
obliged to apply state law to limitations questions. See
Walker v. Armco Steel Corp., 446 U.S. 740, 753 (1980).
The Fifth Circuit declined to apply American Pipe tolling
to Petitioners’ claims. The Fifth Circuit observed that the
Texas Court of Appeals had specifically rejected class
action tolling in another L-Tryptophan case. (Pet. App.
at 12-13); see Bell v. Showa Denko K.K., 899 S.W.2d
749, 757 (Tex. App.—Amarillo 1995, writ denied).

1 Petitioners’ statement of facts is inaccurate in several respects.
First, Rapoport was filed by a2 Maryland resident in federal court in
Maryland, see Rapoport v. Showa Denko America, Inc., No. JH-90-
518 (D. Md. filed Feb. 18, 1990); the putative class action was
then transferred to South Carolina, the transferee court for
MDL-865, Jn Re L-Tryptophan. Second, there is no record support
for the statement that Petitioner Janet Vaught refrained from filing
a redundant lawsuit by virtue of “the text and spirt of Rule 23” as
asserted in the Petition at p. 20. Nor is there record support for
the proposition that as a result of Vaught, “thousands... of class
claimants’ cases are . . . prescribed.” (Pet. at 10 (sic).) Nor do
Respondents concede that Petitioners’ action filed in April 1993 was
timely under Texas’ two-year statute if the filing of Rapoport

4

B. The American Pipe Doctrine.

In American Pipe, this Court held that “at least where
class action status has been denied solely because of failure
to demonstrate that ‘the class is so numerous that joinder
of all members is impracticable,’ ” the commencement of a
class action tolls “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.” 414 U.S. at 552-553, 554. The tolling doctrine
thus encourages putative class members to rely on class
actions and to refrain from individual actions; tolling pre-
serves the timeliness of claims unless and until the action
is denied.” This Court cautioned that class action tolling
would apply only when the filing of a class action provided
proper notice to defendants of the claims and claimants
asserting them:

[t]he policies of ensuring essential fairness to defend-
ants and of barring a plaintiff who “has slept on his
rights,” are satisfied when, as here, a named plaintiff
who is found to be representative of a class com-
mences a suit and thereby notifies the defendant not
only of the substantive claims being brought against
them, but also of the number and generic identities
of the potential plaintiffs who may participate in the
judgment. Within the period set by the statute of

tolled her claim. To the contrary, she still had time to file her suit
after denial of class certification in Rapoport in January 1992, even
assuming arguendo that tolling applied.

2 American Pipe applied class action tolling to motions to inter-
vene filed after the statute of limitations would otherwise have
expired. In Crown, Cork & Seal v. Porter, 462 U.S. 345, 350-51
(1983), the rule was extended to the filing of separate individual
actions in a “Title VII” litigation. In a third case, Chardon v.
Fumero Soto, 462 U.S. 650, 662 (1983), also involving a federal
cause of action (a civil rights claim where the federal statute pro-
vided no limitations period), this Court held that after class certifi-
cation is denied, the time period for the individual plaintiff to bring
suit was determined by state law (i.e., state saving statutes).

5

limitations, the defendants have the essential infor-
mation necessary to determine both the subject matter
and size of the prospective litigation.

414 U.S. at 554-555 (citation omitted). A trilogy of
this Court’s decisions has established that federal courts
can toll statutes of limitations on federal law claims but
these decisions do not require (or address) tolling of state
causes of action such as personal injury claims.

C. The Court of Appeals’ Decision.
In this case, the court of appeals observed that:

diversity actions, such as the one at hand for product
liability, involve state causes of action, where state
law, of course, provides the rules of decision even in
federal court. In fact, the Supreme Court has stated
that generally, for diversity actions, a federal court
should apply not only state statutes of limitation but
also any accompanying tolling rules.

(Pet. App. at 27 (citation omitted).) Citing Bell, the
court of appeals correctly determined that under Texas
law, class action tolling applies only to property damage
claims, not personal injury actions.* The Bell court had
concluded:

The basic premise of the American Pipe ruling is
that a statute of limitations can be tolled while class
allegations are pending, provided the defendant has
notice of the type and potential number of the claims
against it. See United Airlines, Inc. v. McDonald,
432 U.S. 385, 393-94 n.14 (1977). In Grant [v.
Austin Bridge Constr. Co., 725 S.W.2d 366 (Tex.
App.—Houston 1987, no writ)], the suit involved

8 Petitioners misleadingly cite Bell without observing that a writ
was denied by the Texas Supreme Court, although they are aware
the writ was denied; indeed, this fact was noted by Respondents in
their brief before the Fifth Circuit. See Brief for Appellees at 4
n.2, Vaught v. Showa Denko K.K., 107 F.3d 1137 (5th Cir. 1977).

6

was filed in a Texas state court by plaintiffs who
were a readily discernible group of people claiming
injury to certain property rather than personal injury.
That distinction is important in determining whether
the defendants have received fair notice of the exist-
ence of a claim by the filing of a class suit. For us
to hold that the filing of a mass personal injury suit,
in a federal court, in another state, with the variety
of claims necessarily involved in such a case, entitled
a plaintiff to a tolling of the limitations period such
as in American Pipe, would be an extension not
warranted by the Grant decision and we refuse to
do so.

899 S.W.2d at 758.

REASONS FOR DENYING THE WRIT

The petition should be denied. Sitting in diversity,
federal courts apply state law to determine statute of limi-
tations rules, including tolling rules. There is no conflict
among the federal circuits as none of the other courts of
appeals which have considered the question of whether
to apply class action tolling have applied Texas law. Fur-
ther, contrary to Petitioners’ claims, the Fifth Circuit’s de-
cision does not conflict with American Pipe which applied
class action tolling in the context of a federal cause of
action (antitrust litigation).

I. THE FIFTH CIRCUITS OPINION DOES NOT CON-
FLICT WITH OTHER COURTS OF APPEALS
DECISIONS, NOR IS IT CONTRARY TO THIS
COURT’S DECISION IN AMERICAN PIPE.

A. There Is No Conflict Among The Circuits.

Petitioners urge as their primary argument in support
of review that the Fifth Circuit’s decision conflicts with
Sawtell v. E.l. du Pont de Nemours & Co., Inc., 22 F.3d
248 (10th Cir.), cert. denied, 513 U.S. 917 (1994), and
Adams Pub. Sch. Dist. v. Asbestos Corp., Ltd., 7 F.3d
717 (8th Cir. 1993). There is no direct conflict. In

7

Sawtell, the Tenth Circuit found that it “need not resolve”
whether class action tolling applied in a personal injury
action because (1) Mrs. Sawtell was a New Mexico resi-
dent, (2) the Rule 23 class action was brought only on
behalf of Minnesota residents, and (3) “Mrs. Sawtell was
not a putative member of the Minnesota class action.”
22 F.3d at 253. Thus, the Sawtell court did not apply
American Pipe tolling, nor did the case involve Texas law.
In Adams, a North Dakota statute expressly authorized
extension of time for suits related to removal of asbestos
from public buildings notwithstanding otherwise applicable
limitations periods.* This statute provided evidence of the
North Dakota legislature’s intent to avoid time barring of
asbestos property damage claims. Adams is in fact con-
sistent with Vaught: the Eighth Circuit ruled that, sitting
in diversity, it was obliged to apply North Dakota law, see
7 F.3d at 719, just as the Vaught court applied Texas
law. Moreover, Adams concerned the issue of whether
North Dakota law avoided tolling a property damage
claim; thus the case did not concern tolling in mass per-
sonal injury litigation such as the L-Tryptophan litigation.

Accordingly, there is no direct conflict among the cir-
cuits with respect to the Vaught decision and the decision
of any other circuit court on a matter of federal law.

B. The Fifth Circuit’s Decision Does Not Conflict With
American Pipe.

American Pipe concerned the tolling of statutes of limi-
tations where a class action is filed with respect to federal
law claims. American Pipe does not address the tolling
of state limitations periods on state law claims. As dis-
cussed further below, nothing in American Pipe overrides
Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), which
requires federal courts to apply state law on statute of
limitations questions when sitting in diversity. As the
Texas Court of Appeals observed in Bell, a case involving

* See N.D. Cert. Code 28.01 (1993).

8

class action tolling of personal injury claims, state law
governs class action tolling of state law claims:

We do not agree that American Pipe operates to toll
our state statute of limitations. That case involved
an interpretation of Rule 23 of the Federal Rules of
Civil Procedure and concerned the question of
whether a federal statute of limitations was tolled
for the purpose of filing a federal claim. Under the
doctrine of the hoary case of Erie Railroad Co.
and its progeny, where a claim is derived from state
law, as is appellant’s suit, state law governs the tolling
of the statute of limitations.

Bell, 899 S.W.2d at 757 (citations omitted).

Moreover, the “fair notice” requirement of American
Pipe counsels against class action tolling in mass personal
injury litigation. American Pipe states that for class ac-
tion tolling to apply, the class action must give the de-
fendant notice sufficient to identify the evidence necessary
to defend its claims. See 414 U.S. at 554-55. Absent the
fair notice requirement, defendants would be prejudiced
by class action tolling. In a concurring opinion, Justice
Blackmun emphasized the central role that notice plays
in American Pipe tolling. After warning that American
Pipe must not be read as encouragement to file class ac-
tions solely to protect dilatory plaintiffs who are late to
file suit, Justice Blackmun admonished that only plaintiffs
whose claims “concern the same evidence, memories, and
witnesses as the subject matter of the original class suit”
should benefit from class action tolling. 414 U.S. at 562
(Blackmun., J., concurring). This way “the defendant
will not be prejudiced by later intervention, should class
relief be denied.” 7d.

In mass personal injury actions, the notice requirement
is not satisfied and class action tolling is inappropriate.
As the California Supreme Court has observed:

[Because personal-injury mass-tort class-action claims
can rarely meet the community of interest require-

9

ment in that each member’s right to recover depends
on facts peculiar to each particular case, such claims
may be presumptively incapable of apprising de-
fendants of the “substantive claims being brought
against them” . . . a prerequisite, in our view, to the
application of American Pipe.

Jolly v. Eli Lilly & Co., 751 P.2d 923, 937-938 (1988).
The key facts underlying personal injury mass tort claims
are unique to each plaintiff:

The major elements in tort actions for personal
injury—liability, causation, and damages—may vary
widely from claim to claim, creating a wide disparity
in claimants’ damages and issues of defendant liabil-
ity, proximate cause, liability of skilled intermedi-
aries, comparative fault, informed consent, assump-
tion of the risk and periods of limitation.

Jolly, 751 P.2d at 936 (citations omitted) .°

Because personal injury claims turn on plaintiff-specific
facts, the MDL Court ruled in Rapoport that a class
action was not appropriate for L-Tryptophan. Far from
being compelled by American Pipe, class action tolling
would not comport with its fair notice requirement as the
filing of Rapoport did not give Showa Denko the identity
of potential plaintiffs or enable Showa Denko to identify
and preserve relevant evidence (medical providers, medi-
cal records, damages witnesses, etc.).

Accordingly, certiorari is not warranted on the basis
that the court of appeals’ decision conflicts with Supreme
Court precedent.

5 See also Ganousis v. E.1. du Pont de Nemours & Co., 803 F. Supp.
149, 155 (N.D. Ill. 1992) (noting that argument that American Pipe
does not apply in mass tort personal injury action because defend-
ants do not have the “requisite information about the prospective
claims .. . appear[s] to have some force and [is] buttressed by some
respectable authority”); 7B Charles A. Wright, Arthur R. Miller,
& Mary K. Kane, Federal Practice and Procedure § 1783 (2d ed.
1986) (“[A]llowing a class action to be brought in a mass tort
situation is clearly contrary to the intent of the draftsmen of the
rule’).

10

Il. THE COURT OF APPEALS’ DECISION IS
CORRECT.

The Fifth Circuit’s decision is also correct. The court
properly applied state law to determine whether Texas
would toll class actions in a mass personal injury lawsuit
and concluded, based on Bell, that the filing of Rapoport,
a putative class action in Maryland,* did not toll the
Texas statute of limitations.

A. Under Erie, Federal Courts Sitting In Diversity
Must Apply State Statutes Of Limitations, Includ-
ing Tolling Rules.

American Pipe was an antitrust case in which the claim
arose under federal law. Post-Erie, federal courts may
not displace state law on statutes of limitations applicable
to state law claims. In Armco Steel, this Court held that
federal courts must apply state tolling rules because they
are an “integral part . . . of the state law cause of action.” ”
446 US. at 746. This Court observed:

There is simply no reason why, in the absence of a
controlling federal rule, an action based on state law
which concededly would be barred in the state courts
by the state statute of limitations should proceed
through litigation to judgment in federal court solely
because of the fortuity that there is diversity of
citizenship between the litigants. The policies under-
lying diversity jurisdiction do not support such a dis-
tinction between state and federal plaintiffs, and Erie
and its progeny do not permit it.

446 U.S. at 753. The rule that federal courts sitting in
diversity must borrow state limitations policies compares
with the Erie doctrine:

If, even in areas of choice, federal courts unwaver-
ingly apply state tolling rules to borrowed limitations

6 Rapoport was transferred to the MDL court in South Carolina.

7 See also Wilson v. Garcia, 471 U.S. 261, 269 (1985); Board of
Regents v. Tomanio, 446 U.S. 478, 484 (1980).

11

periods, the existence of an obligation to do so when
the state periods apply of their own force is com-
pelling. Otherwise, the fortuity of diversity of citizen-
ship would enable parties to alter, radically, the limi-
tations periods applicable to stz:* law claims. When
a plaintiff of citizenship diverse to the defendant can-
not be found, the otherwise applicable state limita-
tions period would govern. Nonetheless, if one can
be found (and since mass torts often affect many
people across state lines, a search for a suitable
plaintiff is often not fruitless), the state’s law will be
displaced by a federal tolling rule. This divergent
outcome, turning solely on the availability of fed-
eral diversity jurisdiction, is intolerable under our
federalism.

Mitchell A. Lowenthal & Norman M. Feder, The Im-
propriety of Class Action Tolling for Mass Tort Statutes
of Limitations, 64 Geo. Wash. L. Rev. 532, 565 (1996)
(footnote omitted);* see Guaranty Trust Co. v. York,
326 U.S. 99, 111-12 (1945) (federal court cannot use its
equity jurisdiction to hear a diversity suit that would be
barred by the state’s statute of limitations if brought in
State court). In York, Justice Frankfurter found that state
limitations periods are for state law claims a significant
part of the “legal rules [which] determine the outcome of

litigation.”° 326 U.S. at 109; see also In re “Agent

8 Mr. Lowenthal is counsel for Showa Denko in this action.

® The cases cited by Petitioners do not support their position that
federal courts sitting in diversity may disregard state tolling rules.
In Tomanio, 446 U.S. at 485, this Court held that other courts should
ordinarily borrow state limitation periods including tolling rules to
supply the limitation period for federal action when there is no
specifically stated federal statute of limitations. A fortiori, state
limitations periods should be borrowed for state class actions.
See Lowenthal & Feder, supra, at 565. In Hanna v. Plumer, 380
U.S. 460 (1965) this Court held that the Federal Rules of Civil
Procedure, rather than state law, governed the manner in which
process was served. In Armco Steel, this Court distinguished Hanna
and ruled clearly that “[t]here is simply no reason why, in the

12

Orange” Prod. Liab. Litig., 818 F.2d 210, 213 (2nd Cir.
1987) (“The limitation periods of American Pipe and
Crown, Cork were derived from federal statutes. Here
we are dealing with Hawaii's limitation statutes. . . . [I]t
is doubtful that either American Pipe or Crown, Cork
can be treated as applicable precedent.”), cert. denied,
484 U.S. 1004 (1988). Tolling rules are an integral part
of state statutes of limitations. See Cook v. G.D. Searle
& Co., Inc., 759 F.2d 800, 803 (10th Cir. 1985) (fed-
eral court sitting in diversity must apply state limitations
period and related ‘olling rules (citing Tomanio, 446 US.
at 485-86) ).

Here, the court of appeals appropriately followed Texas
law, namely, Bell v. Showa Denko K.K., 899 S.W.2d at
757-58. The Bell court contrasted the applicability of
American Pipe in property damage litigation following
Grant v. Austin Bridge Constr. Co., 725 S.W. 366 (Tex.
App.—Houston 1987, no writ). See Bell, 899 S.W.2d
at 758. As the Bell court noted, Grant involved a discerni-
ble group of people claiming property damage, not per-
sonal injury, a distinction of central importance in deter-
mining whether defendants receive fair notice by the filing
of a class suit. In Grant, by marked contrast to L-Tryp-
tophan litigation, the putative class was readily identifiable
and the damages sought were clearly defined. See Grant,
725 S.W.2d at 367. Bell’s distinction between personal

absence of a controlling federal rule, an action based on state law
which concededly would be barred in the state courts by the state
statute of limitations should proceed through litigation to judgment
in federal court solely because of the fortuity that there is diversity
of citizenship between the litigants.” 446 U.S. at 753.

10 Bell is consistent with a line of decisions which recognize that
while property damages cases are appropriate for class certification,
personal injury actions generally are not, due to myriad plaintiff-
specific distinctions in medical condition, illness, exposure, personal
facts including age and lifestyle, and damages. See In re School
Asbestos Litig., 789 F.2d 996 (83d Cir.), cert. denied, 479 U.S. 852
(1986); In re Three Mile Island Litig., 87 F.R.D. 483 (M.D. Pa.

13

injury and property damages tolling is well-grounded and
supported by California precedent.”

Petitioners cannot avoid the on-point Bell holding by
dismissing it as “pure dicta.” Dictum is “a statement in
a judicial opinion that could have been deleted without
seriously impairing the analytical foundation of the hold-
ing, that, being peripheral, may not have received the
full and careful consideration of the court that uttered
it.” Sarnoff v. American Home Prods. Corp., 798 F.2d
1075, 1084 (7th Cir. 1986). In fact, the Bell court’s
decision that a Texas court would not apply class action
tolling was an alternative holding. See 899 S.W.2d at 757.
The tolling issue was thoroughly considered and had the
benefit of full briefing.”

1980); Becker v. McMillin Constr. Co., Inc., 277 Cal. Rptr. 491
(Cal. Ct. App. 1991).

11 While property damages claims may appropriately be subject to
class action tolling, mass tort personal injury claims are not—due
to differences in the notice afforded to defendants when a class
action is filed as to individual plaintiffs’ particularized claims. See
Becker, 277 Cal. Rptr. at 496. The Becker court distinguished
personal injury claims and explained why, for those claims, a tolling
argument could not be sustained:

As to the personal injury claim, it is clear that Jolly controls:
the same causation and damages variables as to various plain-
tiffs’ medical histories and injuries make a finding of ‘common
questions of law and fact’ impossible, and the giving of any
meaningful notice of the substantive claims to defendants doubt-
ful. Similarly, it would be difficult for the defendant to identify
the ‘number and generic identities’ of potential plaintiffs.

277 Cal. Rptr. at 496 (citation omitted).

12 See Brief for Appellants, Bell v. Showa Denko K.K., 899 S.W.2d
749 (Tex. App.—Amarillo 1995, writ denied). Indeed, the American
Pipe issue was argued by Bell in her futile writ for certiorari to
the Texas Supreme Court. The Vaughts cannot complain about the
adequacy of the briefing as their co-counsel at the trial court level,
Kathleen Robbins, Esq., was one of Bell’s co-counsel.

14

B. Other L-Tryptophan Cases Support The Vaught
Result.

In Whall v. Showa Denko K.K., No. 635307 (Cal.
Super. Ct. Oct. 20, 1993), the court rejected plaintiffs’
argument that American Pipe tolling should apply to an
L-Tryptophan case. Citing Jolly, the court ruled that in
mass personal injury tort actions, including the L-Tryp-
tophan cases, given concerns of fairness of notice to de-
fendants, “the tolling principles of American Pipe .. .
will not apply.” Whall, slip op. at 1-2.

Petitioners rely, as below, on an L-Tryptophan case in
New Mexico Federal District Court, Kennedy v. Showa
Denko K.K., which applied equitable tolling based on an
“Erie guess” as to the applicability of American Pipe
under New Mexico law. (See Pet. App. at 41-60.) Peti-
tioners’ reliance on Kennedy is misplaced. First, Kennedy
recognizes that “[a] federal court sitting in diversity must
apply the law of the state in which it sits.” (Pet. App. at
52 (citations omitted).) In his decision to apply American
Pipe, Judge Mechem seems to have been unaware of rele-
vant precedent. Judge Mechem did not discuss Whall and
Bell. He ignored the notice requirement that was central
to the Supreme Court’s analysis in American Pipe.”
Kennedy does not support Petitioners’ position because it
recognizes that a federal court must apply state statute of
limitations law including tolling. In Texas, unlike New
Mexico, the state court of appeals has addressed the issue

18 This decision has not been reported and it is not available via
Westlaw or LEXIS. Copies have been lodged with the Clerk of this
Court.

14 Judge Mechem mistakenly relied on Becker as extending class
action tolling to mass tort actions, although as noted above the
Becker court followed Jolly recognizing that mass personal injury
actions are not suitable for class action tolling. The Becker court
distinguished property damage claims from personal injury mass
tort claims because “the identity and number of potential claimants
were sufficiently ascertainable [in Becker] to notify defendant of all
potential claims within the limitations period.” Becker, 277 Cal.
Rptr. at 496.

15

of class action tolling and does not allow tolling in mass
personal injury actions.

In another L-Tryptophan case, not cited by petitioners,
Barela v. Showa Denko K.K., No. Civ. 93-1469, 1996
U.S. Dist. LEXIS 7830 (D.N.M. Feb. 28, 1996), the
court held American Pipe did not apply. First, New
Mexico (like Texas) has no compelling interest in further-
ing the economy and efficiency of a federal court sitting
in another state that would override the local statute of
limitations and the forum state’s interest in protecting
against stale claims. Barela, 1996 U.S. Dist. LEXIS
7830 at *14-*16. It would be novel and erroneous for
a court sitting in New Mexico (or Texas) to adopt Ameri-
can Pipe to toll its own statute of limitations based on a
class action filed in a foreign jurisdiction. See Barela, 1996
U.S. Dist. LEXIS 7830 at *16. Judge Hansen held that
American Pipe tolling should not apply to mass personal
injury tort cases such as the L-Tryptophan cases where
the class action did not give defendants adequate notice
of individual claims. See Barela, 1996 U.S. Dist. LEXIS
7830 at *16-*17 (citing Bell and Jolly).

As the district court observed in Barela, “the federal
interests encountered in American Pipe are not as strong
when a federal court sits in diversity.” 1996 U.S. Dist.
LEXIS 7830 at *15 (citing In re “Agent Orange” Prod.
Liab. Litig., 818 F.2d at 213). The court followed
Carter v. Washington Metro. Area Transit Auth., 764
F.2d 854, 857 (D.C. Cir. 1985), in determining that there
is “no remotely compelling federal interest in overriding
the local statute of limitations” in personal injury suit
between private parties. Barela, 1996 U.S. Dist. LEXIS
7830 at *15-*16. The Barela court concluded: “This
Court does not believe that any overriding federal interest
in class actions mandates application of American Pipe
in diversity cases in the absence of applicable state tolling
law.” Barela, 1996 U.S. Dist. LEXIS 7830 at *16.

16

The underlying rationale of American Pipe—the fed-
eral interest in the federal class action statute and pre-
vention of a multiplicity of actions in federal court—
does not apply to a personal injury suit filed in state
court by a Texas resident. There is no reason why the
pendency of a petition for class certification filed by a
Maryland resident in Maryland should outweigh Texas’
strong interest in preventing the assertion of stale claims.
Otherwise Texas’ statute of limitations would be disre-
garded and subject to indefinite extension whenever a class
action in an arguably related matter was filed anywhere
in the country, without regard to whether or not the class
action was filed in good faith or actively pursued.

CONCLUSION
The petition for certiorari should be denied.

Respectfully submitted,

SARA D. SCHOTLAND ROWLAND FOSTER
Counsel of Record STRASBURGER & PRICE, L.L.P.
CLEARY, GOTTLIEB, STEEN 901 Main Street, Suite 4300
& HAMILTON Dallas, Texas 75202
1752 N Street, N.W. (214) 651-4300

Washington, D.C. 20036
(202) 728-2700

Attorneys for Respondents
Showa Denko K.K. and Showa Denko America, Inc:

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_0872%3A2. Public record. Not legal advice.