Summary
The Nebraska Supreme Court held that the federal district court exercised supplemental jurisdiction over Stacy Ryan’s breach of contract claim against Streck, Inc., even though it later declined to continue exercising that jurisdiction. The court further held that 28 U.S.C. § 1367(d) tolled the statute of limitations while the claim was pending in federal court, making Ryan’s state-court action timely. The court reversed the Sarpy County District Court’s dismissal and remanded for further proceedings.
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Practice areas
Questions Presented
- Whether the federal district court continued to have and exercise supplemental jurisdiction over Ryan's state-law breach of contract claim after the Eighth Circuit remanded the matter.
- Whether 28 U.S.C. § 1367(d) tolled the statute of limitations on Ryan's breach of contract claim while the claim was pending in federal court.
- Whether the Sarpy County District Court properly dismissed the action as untimely.
Holdings
- The federal district court continued to have supplemental jurisdiction over Ryan's state-law breach of contract claim after remand and exercised that jurisdiction until it permissively declined to continue exercising it.
- Section 1367(d) tolled the statute of limitations on Ryan's breach of contract claim while the claim was pending in federal court, meaning that the limitations clock stopped during that period.
- Dismissal was improper because Ryan's breach of contract claim was timely under § 1367(d).
Key quotations
“The federal district court’s determination to dismiss the case after remand does not diminish its exercise of supplemental jurisdiction to that point.” (109)
“the Supreme Court disagreed and held that § 1367(d)’s instruction to toll a state limitations period meant to hold it in abeyance, i.e., to stop the clock.” (113)
“Additionally, because the federal district court was exercising supplemental jurisdiction over the claim, under federal law, the statute of limitations on Ryan’s breach of contract claim was tolled during the pendency of the federal case.” (114)
Factual background
Ryan owned shares of Streck and, under a revised redemption agreement, Streck repurchased those shares in 2012 for more than $9 million. Ryan alleged that Streck breached the agreement by undervaluing the shares. She pursued the claim through state and federal litigation, and after the federal court declined supplemental jurisdiction, she refiled the contract action in Nebraska state court in March 2019. The state district court dismissed the refiled action as barred by the five-year statute of limitations.
Procedural history
Ryan first filed a state-court breach of contract action in 2015 and voluntarily dismissed it. She then filed a federal action asserting federal and state claims, including breach of contract. The federal district court dismissed the claims, the Eighth Circuit remanded for further consideration of newly discovered evidence related to the contract claim, and the federal court later declined to continue exercising supplemental jurisdiction over that claim. Ryan refiled in Nebraska state court, but the Sarpy County District Court dismissed the action as untimely. The Nebraska Supreme Court reversed and remanded.
Remand instructions
Remanded to the Sarpy County District Court for further proceedings on Ryan's breach of contract claim.