Recently, the Supreme Court in Microsoft Corp. v. Baker,137 S. Ct. 1702 (2017), held that the plaintiff in a putative class action involving Xbox 360 game consoles could not appeal from the District Court’s denial of class certification after plaintiff voluntarily dismissed his claims with prejudice. While 28 U.S.C. § 1291 allows appeals from final decisions as a matter of right, the Supreme Court held that plaintiff’s voluntary dismissal did not qualify as an appealable final decision. The Court determined that allowing such an appeal would undermine § 1291’s finality principle and subvert the discretionary nature of interlocutory class certification appeals under Rule 23(f).

Washington, DC-based litigator James Freije brings us an analysis of the Supreme Court’s latest class certification decision. Resolving a current split amongst multiple federal circuits, the United States Supreme Court recently ruled in Microsoft Corp. v. Baker that federal courts of appeals lack jurisdiction to review orders denying class certification after plaintiffs voluntarily dismiss their claims with prejudice. Justice Ginsburg wrote the majority opinion, joined by Justices Kennedy, Breyer, Sotomayor, and Kagan, overturning the United States Court of Appeals for the Ninth Circuit, citing a lack of jurisdiction under 28 U.S.C. § 1291 (“§ 1291”). In a separate opinion concurring in the judgment, Justice Thomas, joined by Chief Justice Roberts and Justice Alito, agreed that the Ninth Circuit lacked jurisdiction, but cited incongruity with the standing requirements of Article III of the U.S. Constitution (“Article III”) rather than § 1291.

Washington, DC-based litigator James Freije brings us an analysis of the Supreme Court’s latest class certification decision. Resolving a current split amongst multiple federal circuits, the United States Supreme Court recently ruled in Microsoft Corp. v. Baker that federal courts of appeals lack jurisdiction to review orders denying class certification after plaintiffs voluntarily dismiss their claims with prejudice. Justice Ginsburg wrote the majority opinion, joined by Justices Kennedy, Breyer, Sotomayor, and Kagan, overturning the United States Court of Appeals for the Ninth Circuit, citing a lack of jurisdiction under 28 U.S.C. § 1291 (“§ 1291”). In a separate opinion concurring in the judgment, Justice Thomas, joined by Chief Justice Roberts and Justice Alito, agreed that the Ninth Circuit lacked jurisdiction, but cited incongruity with the standing requirements of Article III of the U.S. Constitution (“Article III”) rather than § 1291.

The district court granted the motion and the defendants appealed.Ninth Circuit’s Analysis The sole issue addressed on appeal was whether the Ninth Circuit had jurisdiction over the appeal. Courts of appeals have jurisdiction over appeals of orders entered in bankruptcy cases pursuant to 28 U.S.C. § 1291 and 28 U.S.C. § 158(d). 28 U.S.C. § 1291, enacted in 1948 during the referee system employed prior to the establishment of the Bankruptcy Code, provides, in relevant part, that the “courts of appeals shall have jurisdiction of appeals from all final decisions of the district courts of the United States . . . .” 28 U.S.C. § 158(d) was promulgated as part of the Federal Judgeship Act of 1984 in response to the Supreme Court’s Marathon decision, which held that jurisdiction afforded bankruptcy courts under the Bankruptcy Reform Act of 1978 was too broad.

Plaintiffs may not voluntarily dismiss their class action claims upon receiving an adverse class certification decision and subsequently invoke 28 U.S.C. § 1291, the general rule that appeals can be taken only from a final judgment, to appeal the decision as a matter of right, the U.S. Supreme Court has ruled. Microsoft Corporation v. Baker, No. 15-457 (June 12, 2017).

pdf Class Action Appeals The U.S. Supreme Court, in Microsoft Corp. v. Baker, No. 15-457 (U.S. June 12, 2017), held that plaintiffs may not dismiss their claims with prejudice and then appeal the denial of class certification once a Rule 23(f) appeal has been denied. The Court concluded that the tactic of dismissing with prejudice (subject to renewing them if the denial class certification was reversed on appeal) to obtain a final judgment, rather than litigating their individual claims on the merits, stripped the appeals courts of jurisdiction under 28 U.S.C. § 1291. Justice Ginsburg’s opinion concluded that this “tactic would undermine §1291’s firm finality principle, designed to guard against piecemeal appeals, and subvert the balanced solution Rule 23(f) put in place for immediate review of class-action orders.”

A group of plaintiffs hoped to hit the reset button on the Ninth Circuit’s denial of their Rule 23(f) petition to appeal from an order striking class allegations in their case against Microsoft, the maker of the popular Xbox line of videogame consoles. Plaintiffs, who alleged their Xbox 360 consoles had a tendency to scratch game discs, attempted this reset by appealing the certification order after taking a voluntary dismissal of their putative class action with prejudice.The Ninth Circuit was persuaded that plaintiffs’ voluntary dismissal created a final judgment for purposes of appeal as of right under 28 U.S.C. § 1291. Plaintiffs, however, did not challenge the dismissal order on appeal.

In that respect, the decision is required reading for any employer involved in class action litigation.***In Microsoft Corp. v. Baker, No. 15-457, 582 U.S. ___ (2017), the Supreme Court was confronted with the question of whether courts of appeal have jurisdiction to review an order denying class certification after the named plaintiffs have voluntary dismissed their claims with prejudice.Litigants have an immediate right to appellate review only of “final decisions of the district courts,” as set forth in 28 U.S.C. § 1291. The denial of class certification is not a final order and, therefore, not necessarily entitled to such immediate review.

Key Points In Microsoft Corporation v. Baker, the U.S. Supreme Court refused to extend mandatory appellate jurisdiction under 28 U.S.C. § 1291 to plaintiffs who voluntarily dismissed their claims so that they could appeal the denial of class certification. The Court held that denials or grants of class certification can be appealed under 28 U.S.C. § 1291, but only when there is a final judgment.

In that respect, the decision is required reading for any employer involved in class action litigation. *** In Microsoft Corp. v. Baker, No. 15-457, 582 U.S. ___ (2017), the Supreme Court was confronted with the question of whether courts of appeal have jurisdiction to review an order denying class certification after the named plaintiffs have voluntary dismissed their claims with prejudice. Litigants have an immediate right to appellate review only of “final decisions of the district courts,” as set forth in 28 U.S.C. § 1291. The denial of class certification is not a final order and, therefore, not necessarily entitled to such immediate review.