Supreme Court’s ‘Microsoft Corp. v. Baker’ Ruling Restores Sanity To Federal Appellate Procedure – Forbes
Microsoft Corp. v. Baker is one of those cases that only a lawyer could love. At issue was whether a federal appellate court has jurisdiction to review a class-certification order if the plaintiffs have voluntarily dismissed all of their claims, with prejudice.
Class-action plaintiffs have long sought the right to immediately appeal from orders denying class certification. In the 1960s and 1970s, some federal courts of appeals began allowing such an immediate right of appeal under the so-called death-knell doctrine. Under that judicially created rule, if the plaintiffs could show that the denial of class certification—if left unreviewed—would end the lawsuit for all practical purposes, the appeals court would grant review of that interlocutory order.
In other words, if plaintiffs could demonstrate that, absent class certification, the value of their individual claims made it economically impractical to litigate them on their own, some federal appeals courts deemed the denial orders to be “final” orders under 28 U.S.C. § 1291 (and therefore appealable).
But in 1978, in Coopers & Lybrand v. Livesay, the US Supreme Court unanimously rejected that practice. The Court held that the death-knell doctrine wasted judicial resources by encouraging inefficient, piecemeal appeals, and that it unfairly disadvantaged defendants—who had no similar right to an appeal from orders granting class certification.
Following the Court’s unanimous holding in Livesay, Federal Rule of Appellate Procedure 23(f) was enacted to give both plaintiffs and defendants the ability to request an interlocutory appeal from a class-certification order, but vesting absolute discretion in the appeals court on whether to grant such review.
Many of the concerns that animated Livesay and inspired Rule 23(f) were back before the Court this term in Baker. The case arose in the context of a putative consumer class action against Microsoft Corporation. The class-action complaint alleged that Microsoft’s Xbox 360 was defectively designed because game discs could become scratched if the game console were jostled too much.
On Microsoft’s motion, the district court struck the plaintiffs’ class allegations from the complaint, having concluded that neither causation nor damages could be proven in one stroke by common evidence. Plaintiffs then petitioned the Ninth Circuit for interlocutory review under Rule 23(f), but the appeals court denied the petition, leaving the plaintiffs to pursue their individual claims on the merits in the district court.