The Supreme Court recently decided a case involving an Xbox 360, although the issue before them had nothing in particular to do with the video game system itself. It got me wondering, however, how many justices would you guess have played a video game on an Xbox 360? The answer might be zero. But the Chief Justice and newly-minted Justice Gorsuch have teenagers at home. And I could envision Justice Sotomayor or Justice Kagan playing with a young relative. A majority of the Court? Justice Kennedy vs. Justice Breyer playing against each other in chambers? I doubt it.
Microsoft Corp. v. Baker involved whether a plaintiff can appeal a decision denying class certification (or, in this case, striking the class allegations) by voluntarily dismissing the case while purporting to reserve a right of appeal. This case was a putative class action alleging that the Xbox system scratched game discs thereby damaging them during normal game-playing conditions. The district court granted a motion to strike the class allegations based on an earlier decision in a similar case denying certification. The plaintiffs petitioned the Ninth Circuit for permission to appeal under Rule 23(f), which was denied. They then stipulated to a dismissal with prejudice, purporting to reserve a right of appeal, and thereby trying to force the Ninth Circuit to take their appeal. On this second try, the Ninth Circuit concluded they did have a right of appeal because there was a final judgment under 28 U.S.C. § 1291. But the Supreme Court reversed, finding that there was no appellate jurisdiction under § 1291.
Justice Ginsburg wrote the majority opinion (joined by Justices Kennedy, Breyer, Sotomayor and Kagan). Her opinion made essentially two points. First, the tactic that plaintiffs’ counsel attempted to use here was contrary to the rationale behind the Court’s opinion in Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978), which held that a decision denying class certification was not appealable under a “death-knell” doctrine on the theory that such a ruling effectively ended the litigation. The Court concluded that such a “death-knell” doctrine was an improper end-run around §§ 1291 and 1292. Second, allowing this type of appeal would be contrary to the purpose and intent of Rule 23(f) and its enabling statutes, under which appeals from class certification orders may be heard only in the discretion of the court of appeals. If permitted, the voluntary dismissal route would allow a plaintiff to force a court of appeals to hear an appeal where not permitted under Rule 23(f).
Justice Thomas (joined by Chief Justice Roberts and Justice Alito) reached the same result but for an entirely different reason. They concluded that Rule 23(f) was not relevant to determining whether an appeal was “final” under § 1291, and that in this case the district court’s order was final because it ended the litigation. They would have held, however, that the court of appeals lacked jurisdiction under Article III of the Constitution because there was no longer a “case or controversy” that was adversarial. Justice Thomas explained that, after the individual claim was resolved, “[c]lass allegations, without an underlying individual claim, do not give rise to a ‘case’ or ‘controversy’” because a class action is simply a procedural mechanism.
So what can a plaintiff do if he or she wants appellate review of a denial of class certification and the court of appeals denies a Rule 23(f) petition? Justice Ginsburg suggested three options. First, she suggested that a plaintiff could ask the district court to certify its order for interlocutory review under § 1292(b). But some lower courts have found that to be an improper avenue for seeking appellate review of a class certification decision. And if the court of appeals is not interested in a Rule 23(f) petition, it would probably take a strong request from a district court to get the court of appeals to reach a different result. Second, Justice Ginsburg suggests that the plaintiff could simply proceed with the case in the hopes of perhaps changing the district court’s mind on class certification later. But that is usually a longshot, and at some point it’s too late for that because class members must have notice before they would be bound, and the one-way intervention rule may preclude a late certification. Third, Justice Ginsburg suggests that the plaintiff litigate the individual case to a final judgment and then seek review of the denial of class certification (if the plaintiff wins). We may see more cases where that happens, depending on the circumstances. The costs of taking the named plaintiff’s individual case to trial may be low in some contexts and high in others (such as those requiring extensive discovery and expert testimony to prove the claims on the merits). From the defendant’s perspective, such a trial might demonstrate why class certification was properly denied because individual issues mattered. But in some contexts defendants may not welcome such an individual trial because of concerns about collateral estoppel.