The Federal Circuit’s recent decision in Kelly v. United States is significant for reasons that extend well beyond its holding that the plaintiffs’ claims were untimely. In reaching that conclusion, the court took the unusual step of expressly recognizing that a subsequent Supreme Court decision had effectively overruled part of the Federal Circuit’s own precedent.
For plaintiffs asserting Fifth Amendment taking claims against the federal government, the decision carries a clear lesson: filing a proposed class action does not suspend the Tucker Act’s six-year statute of limitations for individuals who have not filed their own claims. More broadly, Kelly demonstrates how Supreme Court decisions arising in entirely different areas of the law can reshape the procedural rules governing claims against the United States.
The Federal Circuit’s Rule in Bright
To understand Kelly, it is necessary to begin with the Federal Circuit’s 2010 decision in Bright v. United States.
Bright arose from a Trails Act taking case in which property owners alleged that the conversion of a railroad corridor into a recreational trail resulted in the taking of their property interests. One landowner filed a proposed class action before the Tucker Act’s six-year filing deadline expired and promptly sought class certification. Additional landowners joined the litigation only after the six-year period had elapsed.
The Court of Federal Claims dismissed those later-added plaintiffs as untimely, but the Federal Circuit reversed. Relying heavily on the Supreme Court’s decision in American Pipe & Construction Co. v. Utah, the court held that the filing of a proposed class action tolled the Tucker Act’s six-year limitations period for members of the putative class while class certification was pending.
Critically, the Federal Circuit characterized American Pipe tolling as a procedural doctrine designed to promote the efficient operation of class actions rather than a form of equitable tolling. Because it viewed the doctrine as procedural, the court concluded that tolling could apply even though the Tucker Act’s filing deadline is jurisdictional. For more than a decade, Bright provided plaintiffs with a significant measure of protection in class-based takings litigation.
For plaintiffs asserting Fifth Amendment taking claims against the federal government, the decision carries a clear lesson: filing a proposed class action does not suspend the Tucker Act’s six-year statute of limitations for individuals who have not filed their own claims.
CalPERS Recasts American Pipe Tolling
The legal landscape changed in 2017 when the Supreme Court decided California Public Employees’ Retirement System (CalPERS) v. ANZ Securities, Inc. Although CalPERS involved securities litigation rather than taking claims, the Court addressed a broader question with far-reaching implications: What is the nature of the tolling rule recognized in American Pipe?
The Supreme Court answered that question unequivocally. American Pipe tolling, the Court explained, is rooted in equitable principles. It is not merely a procedural consequence of filing a class action; it is an equitable exception to an otherwise applicable filing deadline.
That distinction proved decisive. Because equitable doctrines cannot extend certain statutory deadlines, the Court held that American Pipe tolling could not alter the statute of repose at issue in CalPERS.
Although the Supreme Court did not mention either the Tucker Act or Bright, its reasoning squarely undermined the premise of the Federal Circuit’s Bright decision, which depended on the proposition that American Pipe tolling was procedural rather than equitable. CalPERS rejected that proposition.
The Federal Circuit Revisits Its Precedent
That tension came to a head in Kelly v. United States. The plaintiffs alleged that government actions taken during the 2008 financial crisis effected a taking of property and breached contractual obligations. Their claims, however, were filed more than six years after accrual. To avoid dismissal, they argued that the limitations period had been tolled while a related proposed class action remained pending.
The Federal Circuit rejected that argument.
The court first reaffirmed that the Tucker Act’s six-year filing deadline is jurisdictional. As a result, courts lack authority to excuse untimely filings through equitable doctrines. The panel then confronted the obvious question raised by Bright.
Rather than attempting to distinguish its prior decision, the court expressly acknowledged that intervening Supreme Court precedent had changed the governing law, stating that “a portion of our decision in Bright v. United States has been implicitly overruled by California Public Employees’ Retirement System v. ANZ Securities, Inc.”
That acknowledgement is significant. As a general matter, one Federal Circuit panel cannot overrule another. A panel may, however, recognize that an intervening Supreme Court decision has rendered earlier circuit precedent irreconcilable with controlling law. According to the court, CalPERS’ characterization of American Pipe tolling as an equitable doctrine could not be reconciled with Bright’s contrary reasoning.
The outcome followed naturally. Because American Pipe tolling is equitable, and because the Tucker Act’s jurisdictional filing deadline is not subject to equitable tolling, the filing of a proposed class action does not suspend the six-year limitations period for putative class members. The plaintiffs’ claims were therefore untimely.
After Kelly, potential plaintiffs cannot assume that a pending class action will preserve their individual claims. Instead, property owners should carefully monitor accrual dates and evaluate whether they must file independently to protect their rights before the six-year deadline expires.
Why Kelly Matters
The significance of Kelly extends well beyond the facts of the case.
Many Fifth Amendment takings claims arise from government actions affecting numerous property owners. In those circumstances, class actions and coordinated litigation often appear to offer an efficient path forward. After Kelly, however, potential plaintiffs cannot assume that a pending class action will preserve their individual claims.
Instead, property owners should carefully monitor accrual dates and evaluate whether they must file independently to protect their rights before the six-year deadline expires.
The decision also serves as a reminder that important developments in takings law do not always originate in taking cases. CalPERS involved securities litigation, yet its discussion of American Pipe tolling ultimately reshaped Federal Circuit precedent governing Tucker Act claims. Kelly illustrates how procedural rulings from the Supreme Court can have substantial consequences across seemingly unrelated areas of law.
Takeaways
Kelly is more than a statute-of-limitations case. It is a reminder that established precedent can shift when intervening Supreme Court decisions alter the doctrinal foundations on which that precedent rests.
Kelly is more than a statute-of-limitations case. It is a reminder that established precedent can shift when intervening Supreme Court decisions alter the doctrinal foundations on which that precedent rests.
By recognizing that CalPERS effectively displaced part of Bright, the Federal Circuit clarified that American Pipe class-action tolling does not extend the Tucker Act’s six-year filing deadline. For plaintiffs pursuing Fifth Amendment takings claims, the practical message is straightforward: filing deadlines are unforgiving, and reliance on pending class litigation may not be enough to preserve the right to seek compensation from the United States.
As federal courts continue to refine the procedural rules governing claims against the government, Kelly underscores the importance of tracking not only developments in takings law but also broader Supreme Court decisions that may unexpectedly reshape the litigation landscape.
