In Holt v. Cnty. of Orange, No. 22-55806 (9th Cir. Jan 26, 2024), the Ninth Circuit joins other circuits in holding that, notwithstanding 28 U.S.C. § 1367(d), dismissal of a party for improper joinder does not toll statute of limitations for the period that the party’s federal-law claims were pending before dismissal.
Plaintiff “Holt and her children . . . sued the County and other defendants in federal district court on February 13, 2019. This action was Holt I. Holt and her children brought § 1983 claims alleging excessive force, unlawful search and seizure, and unlawful arrest, as well as various California state-law claims” under supplemental jurisdiction, arising from being detained during a search of Holt’s house.
“On April 4, 2019, an amended complaint was filed in Moon, a putative class action against the County. Holt, her children, and Lukens [a grandparent to the children] were included in that amended complaint as individual plaintiffs. Their allegations in Moon were similar to those brought by Holt and her children in Holt I.”
“On September 11, 2019, Holt voluntarily dismissed her claims in Holt I without prejudice. On November 4, 2019, the court in the Moon case dismissed the re-filed claims of Holt, her children, and Lukens without prejudice for improper joinder” per Fed. R. Civ. P. 21. When Holt, her children, and Lukens reasserted their claims in Moon in a second amended complaint, though, the lower court dismissed the claims with prejudice for improper joinder.
Finally, when plaintiffs endeavored to revive the same claims once again in a new case (Holt II) in 2020, the district court dismissed them again. It held that (1) the § 1983 claims were time-barred, and (2) tolling of limitations under 28 U.S.C. § 1367(d) applied only to supplemental state-law claims dismissed under § 1367(c), not to the federal-law claims.
The Ninth Circuit affirms. “Holt contends that § 1367(d) tolls the statute of limitations for the periods during which her § 1983 claims were pending in Holt I and Moon. Lukens contends that § 1367(d) tolls the statute of limitations for the period during which her § 1983 claims were pending in Moon.”
The claims in Moon, the panel holds, are not subject to § 1367(d), which saves only voluntarily dismissed actions, not matters dismissed for improper joinder.
The claims in Holt I, meanwhile, fail because “voluntary dismissal of supplemental state-law claims is not a ‘dismissal’” that “trigger[s] tolling under § 1367(d).” The tolling provision of § 1367(d) reads:
“The period of limitations for any claim asserted under subsection (a), and for any other claim in the same action that is voluntarily dismissed at the same time as or after the dismissal of the claim under subsection (a), shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.”
The panel, interpreting this provision, relies on the “ancient” legal principle “that a voluntary dismissal generally does not toll the statute of limitations for the dismissed claims for the period during which those claims were pending. Absent a statute to the contrary, a voluntary dismissal ‘leaves the situation the same as if the suit had never been brought in the first place.’”
“Under Holt’s argument, tolling would be required for any action that includes both federal and supplemental claims when the plaintiff voluntarily dismisses the action. We are unwilling to conclude that § 1367(d) abrogated such an entrenched legal rule absent a clear indication that Congress meant to do so . . . . There is no clear indication in § 1367 that Congress intended to do so.”
Regarding possible survival of the supplemental state-law claims, which were voluntarily dismissed, the panel observes that “it is well established that dismissal of a party for improper joinder does not toll the statute of limitations for the period that party’s claims were pending before the dismissal,” citing Seventh and Eighth Circuit authority. Rule 21 contains provisions to protect plaintiffs from inadvertently dismissing time-barred claims, including that “[m]isjoinder of parties is not a ground for dismissing an action”; requiring district courts to dismiss parties for misjoinder only “on just terms”; and granting district courts the power to sever improperly joined claims instead of dismissing them.
It is true that in this case the “district court did not conduct a prejudice analysis before dismissing Lukens’s claims from Moon. But even if it was error to dismiss without conducting such an analysis, we agree with the Seventh Circuit that ‘waiving the statute of limitations is not the proper remedy for an erroneous dismissal. The proper remedy is appeal’ . . . . The deadline for Lukens to appeal her dismissal from Moon has long passed.”
Finally, the panel denies equitable tolling. “The district court found that Holt and Lukens did not pursue their claims in good faith. The district court did not abuse its discretion in so finding.”
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