Appeals Court Decision Creates Circuit Split and Confusion Surrounding Post-Settlement Appeals of Class Certification Denials


If a court denies class certification, may the named plaintiff settle the case while still keeping the class certification issue alive for appeal? The recent decision in Ruppert v. Principal Life Insurance Company, No. 11-2554 (8th Cir. Feb. 13, 2013), in which the Eighth Circuit answered No to that question, highlights a Circuit split on the issue.

The plaintiff in Ruppert filed a putative class action alleging violations of the Employee Retirement Income Security Act (ERISA). After the district court denied class certification, the parties entered into a settlement agreement and a consent judgment in favor of the plaintiff that explicitly reserved the plaintiff’s right to appeal the denial of class certification. The agreement also allowed the plaintiff to seek further relief, including attorneys’ fees, costs, and expenses to be paid out of any future recovery awarded to the class, if the court of appeals reversed or vacated the district court’s class certification decision. But after the plaintiff filed an appeal, the Eighth Circuit dismissed it for lack of jurisdiction.

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