Opinion analysis: Finality, appealability, and single-claim actions
on Jan 21, 2015 at 4:17 pm
Two things stand a good chance of happening when the Supreme Court resolves cases dealing with procedure and jurisdiction. One is that the Court will be unanimous or close to unanimous in its decision. The other is that Justice Ruth Bader Ginsburg will write for the Court.
Such was the case on Wednesday in Gelboim v. Bank of America, in which a unanimous Court, in an opinion by Justice Ginsburg, held that a district court order dismissing the sole claim in a single-claim action, consolidated with other actions for pretrial proceedings in multidistrict litigation, was a final and appealable order, even if claims remained in other actions included in the MDL.
Petitioners Ellen Gelboim and Linda Zacher filed a class action asserting one claim under Section 1 of the Sherman Antitrust Act against Bank of America and other institutions, arising from alleged manipulation of the London InterBank Offered Rate (“LIBOR”), a benchmark for determining interest rates. The Gelboim-Zacher action was one of over sixty actions filed in districts in thirteen states; these other actions included antitrust claims as well as other state and federal claims. The actions were consolidated for pretrial purposes in the Southern District of New York pursuant to the MDL statute as “involving one or more common questions of fact.” The district court granted the banks’ motion to dismiss all the antitrust claims in all the actions in the MDL, finding that none of the plaintiffs could assert a cognizable antitrust injury. As the antitrust claim was the only one in Gelboim and Zacher’s action, they argued that they could immediately appeal the decision as of right as a “final decision” under 28 U.S.C. § 1291.
Justice Ginsburg situated the analysis at the intersection of three provisions. The first is Section 1291, which gives courts of appeals jurisdiction over district court decisions that “terminate an action,” meaning decisions “by which a district court disassociates itself from a case.” The second is Federal Rule of Civil Procedure 54(b), which allows a district court to certify as a final judgment a ruling in a multi-claim or multi-party case that resolves “one or more, but fewer than all, claims or parties.” Rule 54(b) is a corrective to broad joinder under the Federal Rules – while a plaintiff can state in one complaint as many claims as it has against opposing parties, a decision resolving some but not all of those claims or parties may be immediately appealable to avoid delay. The third is 28 U.S.C. § 1407, which provides for transfer of actions filed in multiple districts that raise common issues of fact to a single district for coordinated or consolidated pretrial proceedings.
Critically, cases transferred for MDL proceedings “ordinarily retain their separate identities.” Section 1407 speaks of “actions” transferred to a single district, not to “any monolithic multidistrict ‘action’ created by the transfer.” Consolidation is designed merely to offer convenience and efficient pretrial administration, without “meld[ing]” one action into a single unit with sixty other actions. It follows that an order disposing of one of the discrete cases in its entirety qualifies under Section 1291 as an appealable final decision. The decision dismissing the lone claim in the Gelboim-Zacher complaint, without leave to amend, “had the hallmarks of a final decision.” It completed adjudication of the complaint, terminated that action, and was in no way “tentative or incomplete.” As a result of the district court’s decision, Gelboim and Zacher no longer had a pending action and no longer were participants in the consolidated pretrial proceedings.
The Court further recognized the “quandary” that plaintiffs such as Gelboim and Zacher would be placed in by the alternative position that no appeal of right accrues until all consolidated proceedings end. Justice Ginsburg could not identify any discrete event or order that would start the jurisdictional thirty-day clock for petitioners to file a notice of appeal. The conclusion of pretrial proceedings does not occasion entry of a judgment, and the order remanding actions to their original districts (assuming the actions had not already settled in the MDL court, as most commonly occurs) would not be the dispositive ruling challenged on appeal. And would-be appellants cannot be made to wait until final disposition of all cases in their original districts, an event that may not occur for several years. Thus, the “sensible solution to the appeal-clock trigger is evident:” When the MDL court grants a dispositive motion on all issues in one case in the consolidated proceedings, that order is final and immediately appealable, even if other cases containing other issues would not be appealable at that time.
The banks argued that this approach creates an anomaly: the plaintiff with the fewest or weakest claims would be able to appeal before the parties with stronger cases. But the Court identified two ways to address that concern. The first is Rule 54(b), allowing the district court to certify as final those claims dismissed in the multi-claim actions that overlap with the dismissed claim in the single-claim action, even if other issues remain unresolved and unappealable in the multi-claim actions. Indeed, the district court attempted to do that here, issuing Rule 54(b) certifications for the dismissed antitrust claims in the other sixty actions so that those plaintiffs could join Gelboim and Zacher in the court of appeals. Importantly, Rule 54(b) could only be used in one direction; it could not provide an alternative vehicle to regulate Gelboim and Zacher’s appeal, since by its terms the rule applies only to multi-claim cases, not to single-claim cases such as theirs. Second, a district court might defer ruling on a motion to dismiss, allowing all actions to remain alive and allowing all plaintiffs to continue participating in the ongoing MDL proceedings.
Finally, the Court expressly declined to resolve how either Section 1291 or Rule 54(b) apply for all-purpose consolidations, in which separate actions that could have been brought in a single action truly are merged into one action.
A district court order dismissing the sole claim in a lawsuit that has been consolidated with other actions for pretrial proceedings in multidistrict litigation is a final and appealable order, even if claims remain in other actions included in the MDL.
[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, is among the counsel to the petitioner in this case.]