Key Issues in Class Action Lawsuits & the Application of Tolling Principles: Herman Examines the Zaragoza v. Union Pacific Railroad Decision

Special counsel Steve Herman recently published an article reviewing the U.S. Fifth Circuit Court’s application of American Pipe & Construction Co. v. Utah to preserve a putative class member’s discrimination claims in Zaragova v. Union Pacific Railroad. Continue reading below or click here to read on JD Supra.

The U.S. Fifth Circuit Court’s recent decision in Zaragoza v. Union Pacific Railroad (“Zaragoza”)[i] has highlighted key issues in class action lawsuits and the application of tolling principles. The plaintiff’s previous involvement in Harris v. Union Pacific Railroad Co (“Harris”)[ii], which sought to address disability discrimination, became a focal point for questions about the statute of limitations and the protection of individual claims under class action tolling rules. The resolution of Zaragoza examines the implications of the Supreme Court’s decision in American Pipe & Construction Co. v. Utah (“American Pipe”)[iii] and the impact of class certification and decertification on his ability to pursue claims.

The Cases

Robert Anthony Zaragoza, a former brakeman and train conductor for Union Pacific Railroad Company, was dismissed in 2015 after a positive cocaine test, only to be reinstated later. In 2016, he failed a color vision test and subsequent retests, leading to his removal from service and denial of recertification as a conductor. Zaragoza contested these results by providing medical reports attesting to his adequate color vision; however, this time he was not reinstated.

In February 2016—two months before Zaragoza failed Union Pacific’s color vision tests in April 2016—Quinton Harris and five other named plaintiffs filed their first amended complaint, bringing disability discrimination claims against Union Pacific on behalf of current and former Union Pacific employees.

Harris v. Union Pacific Railroad

Initially, those included in the Harris claims were “removed from service over their objection, and/or suffered another adverse employment action, during their employment with Union Pacific for reasons related to a Fitness-for-Duty evaluation…”

Over two years later, the Harris plaintiffs moved for class certification under a slightly revised class definition which included, “All individuals who have been or will be subject to a fitness-for-duty examination as a result of a reportable health event at any time from September 18, 2014, until the final resolution of this action.”

In February 2019, the District Court granted class certification using the revised class definition. The district court also adopted the Harris plaintiffs’ proposed class list and ordered notices be sent to the listed individuals, which included Zaragoza. Union Pacific appealed the certification to the Eighth Circuit, arguing that the class definition was “overbroad.” The Eighth Circuit found that the individualized inquiries required to determine unlawful discrimination claims for each class member in this case defeated both predominance and cohesiveness. The court decertified the class in March 2020.

Zaragoza v. Union Pacific Railroad

The 1974 U.S. Supreme Court decision in American Pipe & Construction Co. v. Utah decided that when a class action is filed, the statute of limitations for individuals to file their own lawsuits is paused (or “tolled”) during the period the class action is pending.

Zaragoza filed his disability discrimination charge with the Equal Employment Opportunity Commission (EEOC) on March 8, 2020, just before the Eighth Circuit decertified the Harris class. After the EEOC completed its review of his case in October 2021, Zaragoza filed the present action asserting that his claims were tolled from 2016 to 2020 due to his inclusion in the Harris class action.

The district court for the Western District of Texas dismissed the failure-to-accommodate claim as untimely, finding that the Harris district court’s February 2019 certification order ended tolling for his claims and thus, the statute of limitations expired before Zaragoza filed his EEOC charge in March 2020.

The U.S. Fifth Circuit Court of Appeals later reversed this decision applying American Pipe & Construction Co. v. Utah.

Initially, the Court explained that the class definition is established when the court officially certifies the class and stays in place through the life of the case “even through appeal – until the class is decertified or the case is otherwise resolved.”

In this particular case, the Fifth Circuit notes that Union Pacific’s success in getting the class decertified on appeal only supports the conclusion that “the class as certified was expansive for tolling purposes.” Zaragoza was included as a certified class member in Harris and considering that the court and the related parties treated him as such, “that alone could, and perhaps should, end the inquiry.”

Despite this, Union Pacific asserts that Zaragoza falls outside the certified class based on the class definition. The Court of Appeals, “considering the matter afresh,” concluded that Zaragoza fell within Harris’s class definition certified in February of 2016.

Zaragoza’s failure of the Ishihara color vision test in 2016 was treated as a reportable health event as it indicated that an aspect of his health “had deteriorated since his last recertification and warranted further review.” Upon failing the follow-up light cannon test administered under Union Pacific’s fitness-for-duty program, the plaintiff “suffered an adverse employment action – the loss of his job.” During the class period encompassed by the certified class definition, the court found that “Zaragoza is an ‘individual who had been … subject to a fitness-for-duty examination as a result of a reportable health event’.”

The Fifth Circuit added that the Eighth Circuit’s decision to end American Pipe tolling was too ambiguous and “would undermine the balance contemplated by the Supreme Court by encouraging putative or certified class members to rush to intervene as individuals” resulting in the repetitious and unnecessary filings that the class action mechanism aims to reduce.

Based on the Fifth Circuit assessment of Zaragoza’s claims, the Harris district court’s certified class definition included him. Additionally, based on the record provided to the Court, “Zaragoza was not ‘unambiguously excluded’ from the Harris certified class.” Therefore, during the pendency of the Harris certified class, Zaragoza’s claims were tolled.

The Future of American Pipe Tolling and Class Actions

This decision reinforces the principle that once a class is certified, the definition set by the court is the operable one and applies for tolling purposes to any person who is not unambiguously excluded. The ruling highlights, from a policy perspective, the importance of maintaining class action protections to avoid unnecessary and repetitive litigation. From a practical standpoint, the decision underscores the importance of carefully inspecting proposed, approved and/or modified class definitions, as they might evolve over the course of a class action proceeding.

Steve Herman is special counsel in Fishman Haygood’s Litigation Section and represents both plaintiffs and defendants in commercial, class action, and professional liability cases. Steve teaches class actions at both Tulane and Loyola Law Schools and is often asked to provide expert testimony in such matters.

[i] Zaragoza v. Union Pacific Railroad, No. 23-50194 (5th Cir. 2024)

[ii] Harris v. Union Pacific Railroad Co., No. 19-1514 (8th Cir. 2020)

[iii] American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974)