In City of Los Angeles v. County of Kern, published July 7, 2014, the California Supreme Court reversed a trial court decision granting the city plaintiff a preliminary injunction against enforcement of an ordinance the county defendant enacted, and remanded it for further consideration. The city brought the action in federal court. The 9th Circuit ruled that the city lacked prudential standing. On remand, the district court declined to exercise jurisdiction over the state law claims in the case, and dismissed the case over four years after it was brought. Two months after dismissal, the city refiled the case in state court. The county contended the case was time-barred. The lower appellate court ruled that under 28 U.S.C. section 1367(d), which tolls the statute of limitations for refiling claims in state court while the claims are pending in federal court, plus 30 days after dismissal, suspended the statute of limitations during the entire time the claim was pending.
The California Supreme Court rejected this interpretation of section 1367(d). There are three approaches to tolling. The "suspension" approach, which the lower court adopted, stops the clock during the entire time the action is pending in federal court, so that if an action was filed with four years left in the limitations period, the plaintiff would have four years plus 30 days after dismissal to refile. Under the "grace period" approach, the action is abated while pending, so that the time to refile after dismissal would be any time left under the statute of limitations, plus 30 days. Under the "substitution" approach, the plaintiff would have 30 days after dismissal to refile, regardless of whether a longer period might remain under state law. The Supreme Court chose the "grace period" approach as the best interpretation of section 1367(d).