The court was presented with a set of exotic facts in Garcia v. Chiquita Brands International, 2022 U.S. App. LEXIS 25192 (11th Cir. Sept. 8, 2022), but applied two familiar principles of civil procedure to decide the relatively narrow issues on appeal. The decision was the court’s second in the controversy arising from Chiquita’s guilty plea to unlawfully funding a paramilitary terrorist group operating in Colombia over the course of a decade. A putative class action was filed against Chiquita in 2007 that included federal claims. Those claims, however, were dismissed by an Eleventh Circuit panel in 2014, in an interlocutory appeal. After remand, class certification was ultimately denied in 2019.
In 2020, a set of plaintiffs who were included within the definition of the prior class brought an action in federal district court in New Jersey, asserting various claims against Chiquita under Colombian and New Jersey law. That action was transferred by the Judicial Panel on Multidistrict Litigation to the Southern District of Florida. There, the complaint was dismissed with prejudice as being time-barred under Colombian law. The district court rejected an argument that the 10-year Colombian statute of limitations was tolled during the pendency of the prior putative class action. (The New Jersey claims were dismissed on extraterritoriality grounds, which the plaintiffs did not appeal.) After the dismissal order, the plaintiffs sought to amend primarily to add additional facts to attempt to establish that some of the plaintiffs were entitled to minority tolling because of their ages. The district court denied that motion on the ground that the minority tolling argument had been waived by not presenting it earlier.
In a typically methodical opinion by Senior Judge Stanley Marcus, the court affirmed the district court’s determination that equitable tolling under the American Pipe doctrine did not apply. Under American Pipe, the statutes of limitation governing the claims of unnamed class members are tolled during the pendency of a federal class action. The court began by determining which law would govern the equitable tolling question.The court noted that, under the Erie doctrine, Colombian law must be applied in the same manner as the court would apply the law of any U.S. state. Applying New Jersey choice-of-law rules (i.e., the transferor court’s rules), the court sifted through the dueling opinions of Colombian law experts provided to the district court. While Colombia permits a species of class actions, the court concluded that it did not recognize an equitable class-tolling rule. This created a conflict with New Jersey law, which does recognize class tolling. The court then concluded that Colombia had a far more significant relationship with the parties and the alleged misconduct, requiring application of Colombian law. The court saw no countervailing federal interests that weighed in favor of applying the American Pipe doctrine over Colombian law. The absence of a class-tolling rule, the court reasoned, was integral to the operation of the Colombian statute of limitations and Colombia’s class-action analogue, which places a premium on resolving disputes expeditiously. The court also noted that, in diversity actions, state law applies to the question of whether equitable tolling is available.
The court handed the plaintiffs a victory, however, in holding that the district court improperly denied leave to the plaintiffs to amend their complaint to establish minority-age tolling for some of their contingent. The court cited its precedents requiring a plaintiff be afforded at least one chance to amend the complaint before dismissal of an action with prejudice, unless the plaintiff has acted in bad faith or unless the amendment would cause undue prejudice or be futile. Those exceptions were inapplicable. And whether the plaintiffs had mentioned minority tolling in their original complaint or in their motion opposition papers was not a basis for waiver of the right to amend, the court held.
Posted by Tom Byrne.