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Christensen v. Philip Morris USA Inc.6/8/2005
sustained by the corporation at the hands of the directors. In doing so, the Court recognized the "practical" difficulties for a corporation to discover a claim when corporate agents are themselves the ones who are harming the corporation. Id. at 346. It said: " here potential defendants are in control of the plaintiff corporation it is unrealistic to expect that those defendants will either facilitate discovery of a claim or assert a claim against themselves in favor of the corporation," because such actions are "clearly adverse to their own interests...." Id. at 345. Further, the Court explained that "knowledge of a claim by [culpable] defendant directors cannot reasonably be imputed to the Corporation." Id. To the contrary, said the Court, " n an adverse domination situation the agent cannot reasonably be expected to act upon or communicate knowledge of his own wrongdoing to the corporation." Id. at 346.
In its discussion, the Court reviewed cases from other jurisdictions that had adopted the doctrine of adverse domination. Depending on the jurisdiction, the doctrine of adverse domination was "applied either to delay the accrual of a cause of action, or to toll limitations...." Id. at 339 (internal citations omitted). According to the Court, "the principles of adverse domination are more logically applied to determine accrual of a claim." Id. at 345. It reasoned: "The doctrine is premised upon the understanding that knowledge of a claim by defendant directors cannot reasonably be imputed to the corporation." Id. Yet, the Court also observed: " here the legislature has not provided guidance, it has been left to the Court to define the process for determining accrual." Id. See also Furst v. Isom, 85 Md. App. 407, 420 (1991) (recognizing that the enactment of a savings statute is "a decision which rests solely with the legislature"; permitting plaintiffs to pursue action that had a technical defect, which was not timely corrected, because they relied "on the ruling of an authorized decision maker"; and carving out a "narrow exception" to avoid allowing statute of limitations "to be used as a shield under circumstances in which it is clearly unjust and does not effectuate the purpose the statute is designed to vindicate").
To be sure, there are competing policy interests at stake here -- "those inherent in the rules providing for class actions, e.g., judicial economy and efficiency in litigation, and those inherent in statutes of limitation, e.g., protecting defendants from unfair or stale claims." Singer v. Eli Lilly & Co., 549 N.Y.S.2d 654, 658 (N.Y. Div. App. 1990). Notwithstanding the reluctance of the Court of Appeals to expand limitations by way of tolling, we cannot ignore the rationale of the wealth of cases that have applied the doctrine of class action equitable tolling. In our view, a holding to the contrary would undermine a key goal in the enactment of the class action rule - a reduction in the multiplicity of needless lawsuits. In the absence of class action tolling, class members would have no alternative but to protect their interests by rushing to intervene in the class action as named plaintiffs, prior to a ruling on class certification, or by filing individual lawsuits. This would surely frustrate the purpose of the class action rule, in that it would generate "needless duplication" and overwhelm the courts with a corresponding loss of "efficiency and economy of litigation" that the class action rule was intended to achieve. Am. Pipe, 414 U.S. at 553-54.
Therefore, we conclude that, during the pendency of the class action lawsuit in Richardson, limitations was suspended for potential class members. As Giant was not a defendant in the Richardson class action litigat
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