Today’s decision by the Supreme Court in Microsoft Corp. v. Baker puts an end to a tactic used by plaintiffs in the Ninth Circuit to manufacture an immediate appeal of an order denying class certification. When a federal district court grants or denies class certification, Federal Rule of Civil Procedure 23(f) allows the losing party to ask the court of appeals for permission to appeal immediately. Otherwise, the parties must litigate the case to a final judgment—the named plaintiffs’ individual claims if certification has been denied, or the class claims if certification has been granted—to obtain appellate review of the district court’s class certification determination. But the Ninth Circuit created an exception to this rule by authorizing a plaintiff who has had class certification denied to dismiss his or her individual claims with prejudice and then file an appeal from that self-generated judgment.

After the oral arguments in Baker, it seemed likely that the Supreme Court would reject that exception. And that is exactly what the Court decided today. Much more interesting is how they got there: Although all eight participating Justices agreed on the outcome, they took different approaches to the question presented.
Continue Reading Supreme Court rejects end runs around Rule 23(f) by use of “voluntary dismissal” tactic

Earlier today, the Supreme Court heard oral argument (pdf) in Microsoft Corp. v. Baker, a case that raises complicated questions about federal appellate jurisdiction and Article III standing, but ultimately involves an important practical question in class action litigation: Can a named plaintiff engineer a right to an immediate appeal of the denial of class certification by voluntarily dismissing his or her claims with prejudice and appealing from the resulting judgment?

From the argument, it was clear that a number of Justices believe that the answer should be “no.” As Justice Ginsburg pointed out several times, the committee charged with amending the Federal Rules of Civil Procedure crafted Rule 23(f) to give courts discretion to decide whether to allow immediate appeals of orders granting or denying class certification. But plaintiffs maintain that they should be free to challenge the denial of certification immediately by appealing from what their counsel described as a “manufactured final judgment.”  In other words, as Justice Ginsburg put it, “any time … that a class action is brought against a corporation, [Rule] 23(f) is out the window.”

As discussed below, there are many ways in which the Court could decide the issue. That said, businesses should be cautiously optimistic that the Court will reverse the Ninth Circuit and thus reject a dysfunctional regime in which class-action plaintiffs can appeal the denial of class certification while defendants remain able to appeal orders granting class certification only by grace.


Continue Reading Supreme Court Hears Arguments In Microsoft v. Baker To Address When A Named Plaintiff Can Appeal The Denial Of Class Certification

[Editors’ note:  Today we’re featuring a guest post by Tim Fielden, who is in-house counsel at Microsoft.  His post spotlights an emerging—and important—issue in class-action litigation.]

In two recent decisions, the Ninth Circuit has carved out a new path for plaintiffs seeking immediate review of the denial of class certification: voluntarily dismiss the complaint under Rule 41(a), appeal from the final judgment, and challenge the class certification denial on appeal. If this tactic gains currency, plaintiffs (but not defendants) will have the right to an immediate appeal from any adverse class certification ruling. But at least four circuits
Continue Reading Did The Ninth Circuit Just Give Plaintiffs—But Not Defendants—An Automatic Appeal From Class Certification Orders?

We recently noted that the Ninth Circuit had granted a Rule 23(f) petition in Chen v. Allstate Insurance Co.—on the issue whether a named plaintiff can refuse an offer of judgment for full relief and persist in litigating a class action—and was expected to issue a briefing schedule soon. Leaving aside the substance of the case, there is nothing unusual about the practice the Ninth Circuit followed in Chen. That is standard operating procedure virtually everywhere, although in a few rare instances courts of appeals have ordered briefing and argument on both the Rule 23(f) petition and the
Continue Reading The Seventh Circuit’s Unique Approach To Handling Rule 23(f) Petitions

Here’s a common scenario:  After unsuccessfully moving for class certification and having a petition for review under Federal Rule of Civil Procedure 23(f) rebuffed, the plaintiff wants to take another shot at an appeal.  Can the plaintiff simply settle his individual claims—subject to his right to appeal the denial of class certification—so that he has a dismissal giving him an automatic right to an immediate appeal?

If you’re in the Third, Seventh, Eighth, or Ninth Circuit, the answer is no. Each of these courts have held that they lack jurisdiction over the appeal of a would-be class representative following such
Continue Reading Eighth Circuit Holds that a Plaintiff who Settles Individual Claims Lacks Standing to Challenge Denial of Class Certification

The Wall Street Journal recently published an editorial urging the Supreme Court to grant the petition for certiorari (pdf) in Whirlpool Corp. v. Glazer—a petition filed by my colleagues Stephen Shapiro, Jeffrey Sarles, and Tim Bishop. The petition seeks review of a decision by the Sixth Circuit (pdf), which affirmed the certification of a class of Ohio purchasers of front-loading Whirlpool washing machines that allegedly are defective because a small fraction may emit moldy odors due to laundry residue. (The action is a bellwether case; many identical class actions have been filed across the country against
Continue Reading Wall Street Journal Editorial Calls for Supreme Court Review in Whirlpool Corp. v. Glazer

The Second Circuit’s recent decision in Hecht v. United Collection Bureau, Inc., No. 11-1327 (2d Cir. Aug. 17, 2012), should sound alarm bells for any business that attempts to settle a class action.  The takeaway from the decision is to make sure that  notice of the settlement to absent class members is adequate. Under some circumstances, a single notice in the USA Today won’t cut it. And if it doesn’t, the release in the settlement won’t be worth the paper it’s printed on, and other plaintiffs will be free to bring the exact same class action against you.
Continue Reading Second Circuit: Insufficient Notice of Class Action Settlement Means That Class Members Can Bring Copycat Class Actions

Lest there was any uncertainty on the topic, in Gelder v. Coxcom Inc. (pdf), the Tenth Circuit has now made clear that when a party moves for reconsideration of an order granting or denying class certification, the time for filing a petition for permission to appeal under Rule 23(f) runs from the date of the order resolving the motion for reconsideration.  The court rejected the contention that the motion for reconsideration merely tolls the time for filing the petition for review such that the time it takes to file the motion for reconsideration is deducted from the 14 days that
Continue Reading Tenth Circuit: Motion for Reconsideration Restarts 14-Day Clock for Filing 23(f) Petition

Federal Rule of Civil Procedure 23(f) gives federal courts of appeals authority to permit interlocutory appeals from orders granting or denying motions to certify a class. The rule leaves it murky, however, whether an order partially decertifying a class is appealable under Rule 23(f). In a brief opinion by Judge Posner, the Seventh Circuit has now held that it is.

In Matz v. Household International Tax Reduction Investment Plan (pdf), the court ruled that “an order materially altering a previous order granting or denying class certification is within the scope of Rule 23(f) even if it doesn’t alter the
Continue Reading Seventh Circuit: Order Partially Decertifying a Class Is Appealable Under Federal Rule of Civil Procedure 23(f)