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Supreme Court Reaffirms Two Element Standard for Equitable Tolling

The Supreme Court recently held equitable tolling did not apply to the Menominee Indian Tribe’s claim under the Contract Dispute Act of 1978, finding no “extraordinary circumstances” prevented the timely presentment of claims within the statute’s six year limitations period.  In doing so, the Court resolved a circuit split, and re-affirmed prior decisions treating “diligence” and “extraordinary circumstances” as elements that must be met independently.  The Court further explained that procedural risk associated with class action litigation did not amount to “extraordinary circumstances.”

In Menominee Indian Tribe of Wisconsin v. United States, the Supreme Court addressed whether equitable tolling applied to the Tribe’s claims from 1996, 1997, and 1998 brought under the Contract Disputes Act.  Equitable tolling allows a plaintiff to pursue their claim outside of the normal statute of limitations period.  To receive the benefit of equitable tolling, the plaintiff must usually show they could not or did not discover their injury until after the expiration of the limitations period, despite exercising diligence.  The plaintiff must also show that there were extraordinary circumstances or obstacles standing in the way of bringing their claim.

Menominee Indian Tribe involved several federal statutes that allow Indian tribes to operate certain federal programs themselves.  Pursuant to these statutes, the Indian tribes receive an amount of money equal to what the Government would have otherwise spent on the program.  If the Indian tribe claims the Government did not adequately compensate them for operating the federal program (including administrative and overhead costs), then the Indian tribe can “present” the contract claim pursuant to procedures set forth in the Contract Disputes Act.  The Menominee Indian Tribe chose not to “present” their claims from 1996, 1997, and 1998 within the six year statute of limitations.  The Tribe mistakenly believed that another class action filed by the Cherokee Nation under the Contract Disputes Act tolled the statute of limitations for their own claims.  In some circumstances, one class action can “toll” the statute of limitations for absent class members until the court decides whether the class is certified.

In this case, the Menominee Indian Tribe did not receive the benefit of class action tolling because Cherokee Nation class members had already “presented” their claims, while the Menominee Indian Tribe had not.  The Supreme Court held that this mistake did not satisfy the “extraordinary circumstances” element of the equitable tolling doctrine.  The Court explained that mistaken reliance on another class action was not an “obstacle beyond its control.”  The Menominee Tribe could have presented their 1996, 1997, 1998 claims within the six year statute of limitations, but chose not to.

Though Menominee Indian Tribe reaffirms the Court’s well-developed jurisprudence regarding the requirements of equitable tolling, the Court also offered some new gloss on what constitutes “diligence” and “extraordinary circumstances.”  Diligence, the Court explained, “covers those affairs within the litigant’s control.”  In contrast, “extraordinary circumstances” covers matters outside the litigant’s control.  In other words, the obstacle causing delay must be both extraordinary, and beyond the litigant’s control.

As recently as 2010, the Court had elucidated this standard of “extraordinary circumstances,” however the case at issue then involved a habeas petition, so there was some question as to whether it applied outside of the habeas context.  The decision in Menominee Indian Tribe put that question to rest, and sets forth what is now likely to be considered the “general” federal standard for equitable tolling.