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Argument analysis: Justices dubious about free review of decisions denying class certification

This morning’s long-delayed oral argument in Microsoft v. Baker finally gave Microsoft its “day in court,” more than two years after the U.S. Court of Appeals for the 9th Circuit decision under review, and almost four-and-a-half years after the district court decision. Although it is a big patent day at the Supreme Court – with the decision in SCA Hygiene and the argument in Impression Products v. Lexmark – the Microsoft matter is a civil procedure case, examining the options available for plaintiffs when a district court determines that a case is not suited for adjudication as a class action.

Traditionally, the authority of the federal courts of appeal is limited to reviewing “final” decisions of a district court. Because the claims of individual plaintiffs survive even when a district court refuses to certify a case for adjudication as a class, the decision denying certification ordinarily does not produce a final order suitable for immediate review on appeal. The problem that plaintiffs face, though, is that adjudication of the individual claims often makes no sense without class relief; the costs and fees associated with a trial typically dwarf the possible recovery from any particular individual’s claim. Accordingly, plaintiffs often want to appeal immediately when a district court rejects the availability of class relief.

A common strategy in recent years for plaintiffs facing that problem has been for the named plaintiffs to voluntarily dismiss their individual claims. Although the dismissal is only conditional (the plaintiffs expect to press those claims again if they can persuade the court of appeals that class-based relief is appropriate), the 9th Circuit has concluded that the tactic produces the final decision that plaintiffs need in order to obtain immediate appellate review. This case puts that strategy squarely before the court and the justices seemed deeply skeptical.

You knew things were going well for Microsoft when the justices gave Jeff Fisher, representing the company, free rein to lay out his rejection of the plaintiffs’ position with a simple “damned if they do, damned if they don’t” argument. If the decision is final, then the plaintiffs have no remaining claims and thus there is no Article III “case” for further adjudication. Conversely, if the courts take seriously the idea that the plaintiffs can revive a claim that they have voluntarily dismissed, then the decision is not really final, and so it does not yet qualify for appellate review.

To the extent they addressed it, most of the justices seemed to take the first approach. The general sentiment was that the 9th Circuit made a serious misstep when it adopted the underlying doctrine, as the justices could not see any reason why a plaintiff should be able to appeal a district court judgment that he or she asked the district court to enter. Early on, for example, Justice Sonia Sotomayor, remembering her days on the district court bench, commented that “I haven’t been able to imagine a situation in which a case is dismissed with prejudice, but where there may be some issues that should survive.”

The questioning grew particularly heated when Peter Stris, arguing for the plaintiffs, came to the podium in defense of the tactic. Justice Elena Kagan, for example, asked with incredulity whether “this [is] a procedure that’s used in the Ninth Circuit? … Why did people think that this was the governing law?” Similarly, Chief Justice John Roberts exclaimed: “It’s one thing … if you’ve got a judgment against you and you have arguments why it shouldn’t have been. But you told the district court to enter a judgment against you, so you can’t argue that it shouldn’t have done that.”

Another major problem Stris faced is the history leading up to Federal Rule of Civil Procedure 23(f). In the 1960’s a practice had developed under which plaintiffs had a relatively free hand to appeal decisions denying class certification, on the theory that though not technically final, those decisions were effectively the “death knell” of the class litigation. The Supreme Court’s 1978 decision in Coopers & Lybrand v. Livesay rejected that idea, ushering in an era when plaintiffs had no avenue for immediate appeal of an adverse certification decision.

After deliberation, though, the rules committee amended rule 23, adding a new paragraph 23(f), which permits those appeals, but only with the permission of the court of appeals. (The plaintiffs tried that process in this case, but the court of appeals refused to grant permission.) Justice Ruth Bader Ginsburg seemed particularly dubious about the tension between the plaintiffs’ strategy and rule 23(f): “The rule makers went through a lot of work to figure out what to do with an interlocutory ruling on class action status.  And it came up with 23(f). And this device seems to be just a way to get around 23(f).” As she commented at one point, under the plaintiff’s strategy “23(f) is out the window.”

The low point of the argument for Stris came when Justice Stephen Breyer repeated the bifurcated syllogism from Fisher’s argument in its entirety: “So you’re in a dilemma.  If you say I condition my dismissal upon my later appealing, you run into our case … which says then the judgment isn’t final. But if you don’t reserve something, you’re in the box you’re in right now and the case is over.” For him, as for Ginsburg, the “conditional voluntary dismissal” strategy seemed at best a feeble effort to avoid the obvious import of rule 23(f).

This is one of those arguments in which the justices leave little doubt about the ultimate outcome. Even in the absence of Justice Antonin Scalia, this is a bench with several jurists deeply worried about the excesses of class-action litigation. And on that bench it is fair to say that Breyer, Ginsburg, Kagan and Sotomayor are the least hostile to class actions. It is hard to imagine, after hearing such harsh criticism of the plaintiffs’ position from those four justices, that the class action plaintiffs have any realistic hope of prevailing. In the end, then, a prompt and all-but-unanimous reversal of the 9th Circuit is the likely outcome here.

Recommended Citation: Ronald Mann, Argument analysis: Justices dubious about free review of decisions denying class certification, SCOTUSblog (Mar. 21, 2017, 4:22 PM),