The Supreme Court, in an opinion written by Justice Ginsburg, has held that 28 U.S.C. § 1291 does not confer appellate jurisdiction over an otherwise interlocutory order on class certification following plaintiffs’ voluntary dismissal of their claims. Microsoft Corp. v. Baker, ___ U.S. ___ (2017).  

The Baker plaintiffs were not the first to claim that Microsoft’s Xbox was defective because the game console allegedly scratched game discs. In the first case, the district court denied class certification, the Ninth Circuit denied the petition for review under Rule 23(f), and the case settled. In the second case—Baker—the district court struck the class allegations, citing its prior holding. The Ninth Circuit denied the Baker plaintiffs’ 23(f) petition. Hoping to hasten an appeal, the plaintiffs voluntarily dismissed their claims “with prejudice” but purported to reserve the right to appeal the order striking their class allegations after final judgment.  

The Ninth Circuit determined that it had jurisdiction to entertain the plaintiffs’ appeal, finding the stipulated dismissal sufficiently adverse because it had not been the product of a settlement, and reversed the district court’s order striking the class allegations. The Supreme Court granted Microsoft’s petition for certiorari to decide whether federal courts of appeals have jurisdiction under § 1291 and Article III of the Constitution to review an order denying class certification after the named plaintiffs have voluntarily dismissed their claims with prejudice.

The Court had previously held in Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978), that named plaintiffs cannot appeal the denial of class certification until a final judgment is rendered. The fact that a class certification denial would effect a “death knell” for plaintiffs’ claims by causing plaintiffs to abandon them, the Court held, was not a sufficient reason for considering the order a “final decision.” 

In the wake of Coopers & Lybrand, there was no vehicle for interlocutory review of class certification orders until Rule 23(f), which grants federal courts of appeals unfettered discretion to allow the review of a class certification decision, was passed in 1998. Review under that provision is committed to the discretion of the appellate court, though the Rules Committee’s notes provide some guidance.

In concluding that a voluntary dismissal is not a “final judgment,” the Court began with the fundamental rule that a case should be decided in a single appeal. To allow appeals of otherwise interlocutory orders following voluntary dismissal would invite protracted litigation and piecemeal appeals. And it would put the appealability determination exclusively in the hands of plaintiffs. This one-sidedness was particularly inappropriate, the Court pointed out, because class certification is just as important to defendants as it is to plaintiffs. While the denial of class certification may render the “death knell” to plaintiffs’ claims, the grant of class certification often renders the “reverse death knell” to defendants who must settle non-meritorious claims for large sums.

Responding to plaintiffs’ argument that allowing review would result in prompt resolution because “most appeals lose,” and plaintiffs won’t risk it, the Court pointed out that plaintiffs with weak merits claims will assume that risk because class certification results in significantly larger settlements, which may be far more important at the negotiating table than the merits of the class claims. In short, “Congress chose the rulemaking process to settle the matter, and the rulemakers did so by adopting Rule 23(f)’s evenhanded prescription. It is not the prerogative of litigants or federal courts to disturb that settlement.”   

Justice Thomas wrote a concurring opinion in which the Chief Justice and Justice Alito joined. The concurrence would have reached the majority’s result by relying on Article III of the Constitution, rather than the definition of § 1291. A judgment is “final” under § 1291, the Court explained, when the litigation on the merits has ended and the court has no further role but to execute the judgment. This was the case with a voluntary dismissal just as it was with any other decision on the merits.

According to the concurring opinion, however, the courts lacked jurisdiction to review the class certification denial not because the voluntary dismissal was not a final decision but because a voluntary dismissal meant that there was no longer a “case or controversy” as required for a federal court to possess jurisdiction. The plaintiffs consented to the judgment against them. And it has long been the rule that a party may not appeal from a judgment to which it consented.

This opinion by Justice Ginsburg (in which Justice Gorsuch took no part) resolves a circuit split, siding with the Third Circuit in Camesi v. Univ. of Pittsburg Med. Ctr., 729 F.3d 239 (3d Cir. 2013), and departing from the Ninth Circuit. Both the majority and the concurrence demonstrate a broad rejection of contrived finality schemes, prohibiting plaintiffs in putative class actions from possessing the exclusive power to render a class certification denial appealable.