Background
St. Joseph County foreclosed on Louis Perry’s property in March 2014 for unpaid taxes, later sold it for $29,500 more than the tax debt, and retained the surplus. In December 2014, other Michigan property owners filed the Wayside class action against Van Buren County and a putative defendant class comprising all other Michigan counties. Louis Perry fell within the proposed plaintiff class, and St. Joseph County fell within the proposed defendant class.
After the district court dismissed Wayside in 2015, the Sixth Circuit directed dismissal for lack of subject-matter jurisdiction in 2017. The district court reopened the action in March 2019 after intervening Supreme Court precedent, and the plaintiffs later asserted claims against St. Joseph County individually. Brent Perry, acting as Louis Perry’s heir and estate representative, opted out of the resulting class settlement in July 2023 and filed this action in April 2024 under 42 U.S.C. § 1983 and Michigan law.
The district court held that the three-year limitations period on Perry’s federal claims expired during the interval between Wayside’s dismissal and reopening. It dismissed those claims and remanded the state-law claims to state court. Perry appealed.
The Court’s Holding
The Sixth Circuit held that Michigan Court Rule 3.501(F) deemed the limitations period continuously tolled from Wayside’s commencement in December 2014 after the district court’s 2019 reopening order superseded the earlier dismissal. The limitations clock began running again when Perry opted out in July 2023, and his April 2024 filing came within the applicable three-year period.
The court rejected the argument that Wayside’s potential invalidity as a defendant class action seeking money damages prevented tolling altogether. Under Michigan’s rule, filing a complaint describing a class tolls the claims of persons within that class; a later ruling that certification is improper restarts the clock rather than retroactively eliminating tolling. The court also distinguished federal precedent denying tolling for defendants not named in an earlier class action because St. Joseph County was included in Wayside’s putative defendant class and Michigan’s tolling rule governed.
Tolling nevertheless requires that St. Joseph County had notice of the class members’ claims and the number and generic identities of the potential plaintiffs. Because the district court had not decided whether the County received the notice required by Michigan law, the Sixth Circuit vacated the judgment and remanded for that determination and further proceedings.
Key Takeaways
- Michigan’s class-action tolling rule applies upon the filing of a complaint describing the class, even if the proposed class may later prove uncertifiable.
- An order reopening a previously dismissed class action can, under Michigan Court Rule 3.501(F)(3), make tolling continuous from the action’s commencement.
- Perry’s claims are timely if St. Joseph County had the notice Michigan law requires; the district court must decide that issue on remand.
Why It Matters
The decision clarifies that federal courts adjudicating Section 1983 claims governed by Michigan’s limitations law must apply Michigan’s class-action tolling rules unless those rules undermine the federal cause of action. Differences between state and federal tolling doctrines do not alone make the state rule inapplicable.
The ruling may affect property owners who pursued individual surplus-proceeds claims after opting out of the Wayside settlement, while emphasizing that tolling against members of a putative defendant class still depends on adequate notice.