Under Federal Rule 23(f), parties have 14 days to petition for interlocutory review of an order granting or denying class certification. The federal appellate courts of appeals construe this deadline as “procedural” rather than “jurisdictional” and thus subject to equitable tolling. What warrants equitable tolling, however, is less certain with the Ninth Circuit’s recent decision in Lambert v. Neutraceutical Corp., 870 F.3d 1170 (9th Cir. 2017). There, the Ninth Circuit joined the Second, Third, Fourth, Fifth, Seventh, Eleventh, and D.C. Circuits in holding that a motion for reconsideration filed within 14 days of a class certification order tolls the Rule 23(f) deadline. But the Ninth Circuit went further to accommodate an appeal by a class action plaintiff, holding that equitable circumstances beyond the timely filing of a formal motion for reconsideration may also toll the Rule 23(f) deadline.
In Lambert, Mr. Lambert sued Neutraceutical, the manufacturer of the alleged aphrodisiac dietary supplement “Cobra Sexual Energy,” for violations of California consumer protection statutes (California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act). The district court initially granted class certification on the basis of a “full refund” damages model calculated by multiplying the average retail price by the number of units sold. Such a model may be used where a consumer product is shown to be worthless.
Upon the district judge’s retirement, the case was reassigned to a new judge. At the close of discovery, Neutraceutical moved to decertify the class. On February 20, 2015, the new judge granted the motion on ground that Mr. Lambert did not submit proof supporting his model – proof of the actual average retail price of the product.
At a March 2, 2015 status conference, ten days after the decertification order, Mr. Lambert advised the district court of his intention to move for reconsideration. The district court directed the plaintiff to file his motion by March 12, 2015, i.e., within 20 days of the date of the decertification order. As directed by the district court, Lambert moved for reconsideration on March 12, which was denied by the district court on June 10, 2015. On June 24, 2015, within 14 days of this ruling, Lambert petitioned for interlocutory review. A motions panel of the Ninth Circuit conditionally granted the petition but directed the parties to address the timeliness of the appeal. Not surprisingly, Neutraceutical argued that the petition was untimely because the motion for reconsideration was not filed within 14 days of the decertification order.
In finding the petition timely, the Ninth Circuit relied on specific equitable factors apparent from the record that demonstrated Lambert’s diligence in pursuing his legal rights. The court held that “because Lambert informed the court orally of his intention to seek reconsideration of the decertification order and the basis for his intended filing within fourteen days of the decertification order and otherwise acted diligently, and because the district court set the deadline for filing a motion for reconsideration with which Lambert complied, the Rule 23(f) deadline should be tolled.” Lambert, 870 F.3d at 1179.
The court then turned to the merits of the petition and held—perhaps not surprisingly considering the court’s flexibility on the equitable tolling question—that the district court abused its discretion in decertifying the class, because the alleged uncertainty of the plaintiff’s damages methodology or class members’ damages should not preclude certification.
Lambert creates a narrow but conspicuous split of authority on Rule 23(f) tolling. In Gutierrez v. Johnson & Johnson, 523 F.3d 187 (3d Cir. 2008), for example, the Third Circuit held that even if a motion for reconsideration is timely as defined by the district court’s rules or its scheduling order, it is untimely if filed outside the Rule 23(f) 14-day deadline. The Supreme Court may be called upon to resolve this circuit split in the near future.
