Argument analysis: Laughing and tolling the time to appeal class certification orders
on Nov 28, 2018 at 11:12 am
Anyone who believes civil procedure is not funny should read the transcript of Tuesday’s argument in Nutraceutical Corp. v. Lambert, which showed eight interruptions for laughter in a case considering whether the 14-day period for appealing a class-certification decision is subject to equitable tolling based on concerns for fairness and justice. No one knew interlocutory appeals could be so humorous.
The main provision at issue in the case is Federal Rule of Civil Procedure 23(f), which provides that a “court of appeals may permit an appeal from an order granting or denying class-action certification under this rule if a petition for permission to appeal is filed with the circuit clerk within 14 days after the order is entered.” Also playing a role is Federal Rule of Appellate Procedure 26(b), which allows courts of appeals to extend times for performing an act and may permit an act to be done after time expires, but prohibits courts of appeals from extending the time to file a petition for permission to appeal.
Troy Lambert filed a putative class action, alleging violations of California’s false advertising, consumer fraud and unfair competition laws, arising from Nutraceutical’s sale and marketing of purported aphrodisiac supplements. The district court certified the class in 2014, then decertified it on February 20, 2015. At a March 2, 2015, status conference, Lambert requested that the court recertify the class; the court notified Lambert he could file a motion for reconsideration of the decertification order within 10 days of the conference. Lambert moved to reconsider on March 12, 2015, the 10th day since the court gave it permission to move but more than 14 days after the decertification decision. The district court denied the motion for reconsideration on June 24, 2015. Lambert filed his Rule 23(f) petition with the U.S. Court of Appeals for the 9th Circuit on July 8, 2015 and the 9th Circuit found the appeal timely.
Arguments for Nutraceutical
Arguing for Nutraceutical, John Hueston emphasized that Rule 23(f) is an emphatic and mandatory claim-processing rule that is unalterable when properly invoked, not subject to judge-made exception.
Justices Ruth Bader Ginsburg and Elena Kagan pushed Hueston on the effect of a motion for reconsideration, which is understood as tolling the period for seeking an appeal until the motion is resolved. Hueston argued that this is not equitable tolling, but a “traditional and virtually unquestioned practice” designed to prevent premature appeals, develop the record and respect the authority of the district court. But Kagan argued that it should not matter whether the motion for reconsideration was filed within the 14-day period (as in Ginsburg’s question) or outside the 14-day period but still within the time for filing a motion for reconsideration; either serves the stated purposes of motions to reconsider and either has the same effect on the 14-day period. Hueston responded that the Advisory Committee anticipated that a motion for reconsideration filed within the 14-day 23(f) period could extend that period, but did not count on extensions of 30 days or longer (some districts impose no time limit on motions to reconsider), which would render the 14-day period a nullity.
Ginsburg and Justices Stephen Breyer, Samuel Alito and Neil Gorsuch took turns pushing Hueston about whether “unique circumstances” meant a “sharply honed” exception to mandatory claim-processing rules. Hueston argued that this exception is limited to cases in which the trial judge misled a party who would have taken timely action but did not in reliance on incorrect information provided by the judge. Breyer asked about the effects of a natural disaster such as Hurricane Katrina, in which the courts are not operating when the time period lapses; Gorsuch suggested that hurricanes, lightning and “all of Justice Breyer’s wonderful parade of horribles” were worse than a judge misinforming a party about the time to appeal. Alito proposed a “catastrophic” or “apocalyptic” exception that might include Martian invasion. Hueston insisted that the “emphatic and mandatory” language of 23(f) precludes all such equitable exceptions. Moreover, a mandatory rule is not as harsh or as catastrophic as it might seem in the 23(f) context; if parties cannot proceed on the interlocutory appeal, they have their full right to challenge the certification order on appeal from final judgment at the end of the case.
Gorsuch and Justice Sonia Sotomayor asked about the distinction in FRAP 26(b) between permissibly accepting late action and impermissibly extending time limits and whether allowing a late interlocutory appeal was simply the court permitting an act (filing a petition for appeal) to be done after time expires. Hueston said the rule opens the door only to late acts that do not enlarge or extend the period of time. But neither Sotomayor nor Gorsuch was satisfied with that answer. Sotomayor argued that the natural reading of 26(b) gives the court of appeals “unfettered discretion” to allow a late filing, given its view of the importance of the issue. Hueston insisted that FRCP 23(f) gives the court discretion to accept a petition for appeal, but only a timely one. He agreed with Ginsburg that this is consistent with the language of FRAP 26(b), which identifies petitions for permission to appeal as a category of cases not subject to extension of time.
Arguments for Lambert
Representing Lambert, Jonathan Herstoff began by arguing that the appeal was timely filed because Lambert filed a motion to alter or extend the judgment under Federal Rule of Civil Procedure 59(e) within 28 days. In response to questions from Ginsburg and Gorsuch, Herstoff explained that 59(e) refers to a judgment, which under Federal Rule of Civil Procedure 54(a) “includes a decree and any order from which an appeal lies” and covers final and interlocutory orders and appeals of right and discretionary appeals. Alito and Herstoff then discussed the nature of motions for reconsideration (distinct from Rule 59(e) motions), which are creatures of local rules rather than the Federal Rules of Civil Procedure. Ginsburg suggested that a party could simultaneously move to reconsider and seek permission to appeal within 14 days, so moving to reconsider did not prevent Lambert from seeking review within the required 14 days. But Herstoff responded that this would create a situation in which the same order is being reviewed by the court of appeals and the district court, so it makes more sense to allow the district court to resolve the pending motion for reconsideration before anyone seeks review in the court of appeals. Later, Kagan agreed that it makes more sense to seek reconsideration before pursuing even an interlocutory appeal, but “not every rule we have makes perfect sense.”
Chief Justice John Roberts wanted to know what it means for a claim-processing rule to be mandatory; Herstoff responded that it means the rule is strict but subject to waiver and forfeiture. Gorsuch suggested that Rule 26(b) reflects the paradigm of a mandatory rule, in which Congress was as clear as it could be that times for appeal could not be extended. If this rule is subject to equitable exception, then Congress cannot authorize a truly mandatory statutory deadline.
Roberts and Gorsuch also pushed Herstoff on what constitutes “unique circumstances;” the dictionary definition is something singular or unusual, which, as Roberts noted, most lawyers believe would always cover their particular case. Herstoff responded that the concept refers specifically to the district court misinforming a party about something. But that triggered a flurry of questions from Roberts, Ginsburg, Kagan and Justice Brett Kavanaugh about what the district court did that could qualify as misleading. The court told Lambert that he could move for reconsideration and set a time for that motion, but never said anything about time for appealing or seeking permission to appeal. And Lambert’s counsel never indicated to the court that he intended to seek leave to appeal. Sotomayor complained that Lambert’s position would require the judge to play lawyer and to lay out all the consequences of agreeing to allow a party to file a motion to reconsider, even if the party does not ask about them. Herstoff argued that when a district court indicates an intention to reconsider a decertification order, that order ceases to be the court’s final word on decertification and it makes no sense to seek review before reconsideration is complete.
Sensing the direction of this argument, Hueston emphasized in his brief rebuttal that the judge made no mistake in this case, because counsel never mentioned 23(f) or said the word “appeal” during the status conference. Lambert’s argument would require a judge effectively to conduct a colloquy with counsel about the potential rights implicated by a motion to reconsider; this is unfair to the district judge and goes beyond a sharply honed exception to mandatory rules.
Editor’s Note: Analysis based on transcript of oral argument.