Sanctions Upheld: Sanctions Award Against TCPA Plaintiff Upheld after Claim Deemed Frivolous on Appeal

I never take pleasure in another’s misery, no matter how richly deserved. So please don’t misunderstand the tone here– I’m just reporting the news with a little skip in my step.

In McCabe v. Lifetime Entm’t Servs., No. 18-1149, 2019 U.S. App. Lexis 3133 (2nd Cir. Jan 31, 2019) the Court considered an appeal from a district court order dismissing a time-barred claim and sanctioning the Plaintiff under Rule 11. The issue was the application of the old American Pipe tolling doctrine, that I have written about so often lately.

The McCabe Plaintiff was a member of the class in the old Leyse case (there were actually several Leyse cases but, for our purposes, assume just one.) The Leyse case denied certification, which resulted in a motion for reconsideration and an appeal to the Second Circuit that resulted in an affirmation of the denial of the certification order by the district judge. Simple enough.

Without question the McCabe Plaintiff’s claim was tolled during the pendency of some portion of Leyse but what portion? Was the claim tolled through the conclusion of the unsuccessful appeal by the Leyse class rep or only through the denial of class certification?

In some circuits this would be a tough call, but not in the Second Circuit. That question was answered directly in  Giovanniello v. ALM Media, LLC, 726 F.3d 106, 107 (2d Cir. 2013). There the Court determined that tolling ended when certification was denied because the class member could no longer reasonably rely upon the pending class action to protect his rights. Makes total sense.

Applying the rule of Giovanniello (great name BTW) the McCabe court had no problem determining that the McCabe claim had been filed over a year late. And since Plaintiff had offered no good faith arguments as to why Giovanniello wasn’t directly applicable to his case, the legal challenge posed by Plaintiff—relying on older and abrogated law—was frivolous. So the district court’s sanction order was affirmed.

This was a great ruling and I applaud Lifetime Entertainment Services for pushing sanctions and seeing the appeal through. Well done!