For Whom the COVID Tolls: The enforceability and application of extra-legislative tolling of case initiation deadlines
Earlier this year, we passed the two-year anniversary of the COVID-19 pandemic first turning our lives upside down. In the litigation realm, the business interruption insurance coverage cases have gotten a lot of play during the last year, with the decisions coming down almost unanimously in favor of the coverage defense bar. But there is another COVID-19-related litigation issue that – although at present it is unsettled – could serve as a weapon in the liability defense bar’s arsenal over the next couple of years. The issue is the effect and even validity of states’ extra-legislative tolling of statutory limitation periods due to the pandemic.
The test case is this: a plaintiff files her complaint after the expiration of the applicable period of limitation, but argues that an order from her state’s Supreme Court or Governor – providing that all statutory limitation periods were tolled during the state of emergency – saves her claims. The defendant files a motion to dismiss, arguing that “COVID tolling” only applies to statutes of limitation that expired during the state of emergency, not statutes that expired months or years after the state of emergency had abated. The defendant may also argue that COVID tolling is altogether invalid because it was an improper usurpation of the legislative role by non-legislative branches of government. Whose argument is likely to prevail?
In Michigan, our state Supreme Court issued a number of administrative orders in response to the pandemic, with the goal of reducing in-person contact and slowing the spread of the disease. Administrative Order 2020-3 extended deadlines for the commencement of civil actions beginning on March 10, 2020. On May 1, 2020, the Court amended AO 2020-3 through AO 2020-8, which clarified that AO 2020-3 “is intended to extend all deadlines pertaining to case initiation and the filing of initial responsive pleadings in civil and probate matters during the state of emergency declared by the Governor related to COVID-19.” On June 12, 2020, the Court issued AO 2020-18, which rescinded 2020-3, effective June 20, 2020.
We were recently retained to defend a medical malpractice action – which has a two-year statute of limitations in Michigan – based on events that occurred in July 2019, which means the limitations period would have expired in July 2021. In May 2021, the plaintiff mailed a notice of intent, which tolled the limitations period for 182 days. Thus, the statute resumed running in November 2021 and expired in late January 2022. The plaintiff, however, did not file her complaint until February 2022, contending that COVID tolling saved her claim.
We filed a motion for summary disposition, arguing that the applicable administrative orders only extended deadlines that fell between March 10, 2020 and June 20, 2020, and they did not extend deadlines like the plaintiff’s that fell well after the state of emergency had ended. We also argued that duly-enacted legislation regarding periods of limitation supersedes inconsistent authority effectuated by other branches of government. Indeed, there is Michigan case law explaining that it is the exclusive domain of “the Legislature [to] determine[] the reasonable period of time given to a plaintiff to pursue a claim,” which is a “substantive” determination to be made solely by the Legislature based on “policy reasons” such as “the prompt recovery of damages, penalizing plaintiffs who are not industrious in pursuing claims, security against stale demands, relieving defendants’ fear of litigation, prevention of fraudulent claims, and a remedy for general inconveniences resulting from delay.” Gladych v New Family Homes, Inc, 468 Mich 594 (2003). Thus, even if the intent of the applicable orders was to broadly extend all case initiation deadlines, we argued that the plain language of the statutes of limitation should be given effect, rather than the policy preferences “legislated” by other branches of government. The plaintiff responded that she should at least get the benefit of equitable tolling, which we argued was not warranted. In our case, the judge took our motion under advisement, and we are awaiting a decision.
To our knowledge, there have not been any decisions from Michigan appellate courts on this issue of the validity and effect of COVID tolling, and the results at the trial court level have been mixed when the defendant has raised these arguments. Until there is clarity from the appellate courts, the plaintiff’s bar would be wise to assume the worst and expeditiously file their clients’ complaints without relying on COVID tolling. But when the plaintiff’s bar does not act in an abundance of caution, and takes extra time to initiate their clients’ cases, the defendant, in our view, should consider making the argument that the claim is time-barred.