Thursday, March 1, 2012

When Is A Time Limit Jurisdictional And When Is It In The Nature Of A Statute of Limitations?

Within just the past week, three circuits have addressed this question in the wake of the Supreme Court’s recent decision in Henderson ex. rel Henderson v. Shinseki, 131 S. Ct. 1197, 1202-03 (2011). On February 24th, the Fifth Circuit, in a case under the Tax Equity and Fiscal Responsibility Act (“TEFRA”), addressed whether 26 U.S.C. § 6226(a)’s time limit is jurisdictional or a claim-processing rule. The Court, Judge Garza writing for the panel, in A.I.M. Controls, L.L.C. v. Comm’r of Internal Revenue, No. 11-60044, 2012 U.S. App. LEXIS 3713 (5th Cir. Feb. 24, 2012), held that the 90 day period within which to petition from the government’s determination that the plaintiff was a sham partnership formed to avoid tax liability was jurisdictional.

The same day, the Seventh Circuit in McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., No. 11-3639, 2012 U.S. App. LEXIS 3683 (7th Cir. Feb. 24, 2012), addressed whether Civil Rule 23(f)’s 14 day period to take an appeal from the denial or grant of class action status was jurisdictional. Judge Posner, writing for the panel,  held that the time limit, “having been created by the Court rather than by Congress… is governed by the ‘competence’ standard and therefore is not jurisdictional…” See also In re IFC Credit Corp., 663 F.3d 315, 319-20 (7th Cir. 2011).

On February 29th, the Tenth Circuit, in United States v. McGaughy, No. 11-2030, 2012 U.S. App. LEXIS 4102  (10th Cir. Feb. 29, 2012) addressed whether Federal Rule of Criminal Procedure 35’s 14 day window for correction of a sentencing error was jurisdictional. Judge Tymkovich, writing for the panel, and noting that the Tenth Circuit as recently as 2005 had held that the time limit was jurisdictional, joined the Ninth, First, Third, Sixth and Seventh Circuits reaffirming that the time limit in Rule 35 is jurisdictional.

All of this activity has been generated by the 2011 Supreme Court decision in Henderson. In Henderson, the Court clarified when procedural rules should or should not be considered jurisdictional requirements. There, the Court dealt with a 120-day statutory deadline to appeal the denial of federal benefits to the Veterans Court under the Veterans’ Judicial Review Act. The Court held that the filing deadline was not Jurisdictional. In doing so, the Court reiterated earlier cases in which it had sought “to bring some discipline to the use” of the jurisdictional label. 131 S. Ct. at 1202; See also Arbaugh v. Y & H Corp., 546 U.S. 500, 515 (2006) (“Jurisdiction… is a word of many, too many, meanings.”) (quoting Steel Co. v. Citizens For Better Env’t, 523 U.S. 83, 90 (1998)); Reed Elsevier Inc. v. Muchnick, 130 S. Ct. 1237, 1244 (2010) (“Our recent cases evince a marked desire to curtail such ‘drive-by jurisdictional rulings’… [W]e have encouraged federal courts and litigants to ‘facilitat[e]’ clarity by using the term ‘jurisdictional’ only when it is apposite.”).

In Henderson a unanimous Court held that “filing deadlines… are quintessential claim-processing rules” that “should not be described as jurisdictional” unless “there is any ‘clear’ indication that Congress wanted the rule to be ‘jurisdictional.’” 131 S. Ct. at 1203 (quoting Arbaugh, 546 U.S. at 515). The Court in Henderson emphasized that the “bright line rule for deciding such questions” turns on clear Congressional intent. 131 S. Ct. at 1203 (“with these principles in mind, we consider whether Congress clearly prescribed that the deadline for filing a notice of appeal with the Veterans Court should be ‘jurisdictional’”).

I direct readers’ attention to Henderson and the recent spate of activity in the circuits as, quite obviously, Henderson and its progeny impact on employment law which contains a plethora of time limits, many of which have, historically, been loosely characterized as “jurisdictional”. Henderson teaches us that most of these time limits are not jurisdictional and should be treated as claims-processing rules, that is, in the nature of statutes of limitations which can be waived and tolled depending upon the particular facts. 

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