In the October 2016 term, the U.S. Supreme Court will hear arguments in Microsoft Corp. v. Baker, et al. on appeal from the U.S. Court of Appeals for the Ninth Circuit. The question presented—whether a court of appeals has jurisdiction to review an order denying class certification after the plaintiffs voluntarily dismiss their claim—is an interesting one for federal practitioners with an interest in the procedural tactics of class-action litigation.
In Baker, owners of the Xbox 360 video game console filed five actions claiming the consoles scratched video game discs. Plaintiffs brought claims for breach of warranty and violation of state consumer protection statutes. After lengthy discovery, the district court denied class certification, finding that the individual particularities regarding causation and damages prevented certification. After the Ninth Circuit denied a petition for review, the parties settled on individual terms and the case was dismissed. The same lawyers later brought similar cases on behalf of new plaintiffs claiming that the law on class certification had changed. The district court granted Microsoft’s motion to strike the class allegations based on the still-sound reasoning of the earlier district court decision.
This time, however, after the Ninth Circuit again denied plaintiffs’ petition for review, plaintiffs voluntarily dismissed their claims with prejudice and filed a notice of appeal from the dismissal, instead of prosecuting their individual claims to judgment. The Ninth Circuit held that it had jurisdiction over the appeal from the voluntarily dismissal and overturned the district court’s class certification decision.
As with nearly every Supreme Court case, the implications of Baker extend far beyond the facts of the particular case. To date, six amici curiae briefs have been filed in support of Microsoft. The “friends of the court” are diverse and include, for instance, the U.S. Chamber of Commerce, the Pacific Legal Foundation, and a number of noted civil procedure scholars. According to the Chamber of Commerce, the Ninth Circuit’s ruling gives plaintiffs an unequal advantage in seeking immediate appellate review of class certification decisions. The Pacific Legal Foundation also emphasizes plaintiffs’ “litigation gamesmanship.” And the civil procedure scholars emphasize that the Ninth Circuit’s ruling undermines the history and purpose of Fed. R. Civ. P. 23(f), which grants appellate courts discretion to grant review of an order denying class certification.
The overarching theme of Petitioner and its amici is that Respondents found a tactical loophole under outlying Ninth Circuit law to get another bite at the class certification apple. Given the hurdles to federal class-action certification and the shift in leverage and settlement dynamics after class certification is granted, the question presented in Baker is a serious one. Other circuits have taken a different view from the Ninth Circuit. According to Microsoft’s petition for certiorari, five circuits have held that a court of appeals lacks jurisdiction to review a denial of a class certification where plaintiffs have voluntarily dismissed their claims with prejudice. For instance, in Camesi v. Univ. of Pittsburgh Med. Ctr., 729 F.3d 239, 245-47 (3d Cir. 2013), the Third Circuit equated the Baker plaintiffs’ tactics to “manufactured finality” and noted that such “procedural sleight-of-hand” does not confer appellate jurisdiction.
Although the case may appear postured as a plaintiff-versus-defense-bar issue, it is not necessarily going to render a split decision along ideological lines. Although the future composition of the Supreme Court is currently uncertain, Petitioner has argued that the Ninth Circuit’s ruling is a backdoor attempt to revive the “death knell” doctrine that the Supreme Court rejected in 1978 in Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978). The Livesay opinion held that a district court’s determination regarding class certification is a final decision within the meaning of 28 U.S.C. § 1291. It is worth noting that Justice Stevens wrote the Livesay opinion on behalf of a unanimous Court.
While some may ultimately relegate the Baker opinion to the annals of 1L Civil Procedure exams, those who litigate and defend federal class action cases should stay tuned.