Title: Appealing Class Certification: Traps for the Unwary
Abstract: Recognizing that a wide range of practical and helpful material appears in the newsletters prepared by committees of the International Association of Defense Counsel, this department highlights interesting topics covered in recent newsletters and presents excerpts from them. Writing in the May issue of the newsletter of the Class Action and Multiparty Litigation Committee, Bruce R. Parker of Baltimore's Goodell, DeVries, Leech & Gray explains when time may be of the essence: Until recently, class action litigation in U.S. federal courts by and large was resolved with the district court's determination whether to certify the class. When class certification denied, the litigation often becomes economically impracticable to continue as individual cases. Conversely, when class certification granted, many corporate defendants opt to settle the litigation even when the case has little or no legal merit in order to avoid potential catastrophic losses. The significance of the class certification decision and the unlikelihood of having the decision reviewed by appellate court as part of a final judgment necessitate having effective mechanism for appellate interlocutory review of the decision. Interlocutory review Limited interlocutory review of district court class certification decisions available under 28 U.S.C. sec 1292(b) if the foundational prerequisites are met. These prerequisites include demonstrating that a controlling question of law exists for which there a substantial difference of opinion and that immediate appeal may materially advance the ultimate determination of the litigation. Because these preconditions are not easily met, effective review of the class certification decision often not available. In 1992, Congress gave the U.S. Supreme Court authority under 28 U.S.C. sec 1292(e) to expand the scope of interlocutory appeals. The Court did not use its expanded jurisdictional authority until it added Rule 23(f) to the Federal Rules of Civil Procedure. Effective on December 1, 1998, the rule allows a litigant to bypass the district court and directly petition the courts of appeals for a review of a district court's order granting or denying class certification. The court of appeals, according to the Advisory Committee note, is given unfettered discretion whether to permit the appeal, akin to the discretion exercised by the Supreme Court in acting of a petition for certiorari. The petition must be filed within 10 days after entry of the class certification order, and it does not stay the underlying action unless a stay ordered by either the district court or the court of appeals. Watch for traps The interplay between Section 1292(b) and Rule 23(f) creates a number of potential traps. Defense counsel need to be aware of these traps if they are to avoid the embarrassment of having appeal under Rule 23(f) and/or Section 1292(b) denied because it was pursued under the wrong authority and/or was untimely. The first appellate decision to interpret Rule 23(f) was Blair v. Equifax Services Inc., 181 F.3d 832 (7th Cir. 1999). Blair was appeal of two parallel class action proceedings against Equifax arising from its check verification services offered to merchants. The district court certified a class on February 25, 1999. On March 8, the defendant filed a motion for reconsideration, which was denied on March 11. The defendant did not file its Rule 23(f) petition until March 22. The Seventh Circuit held that the appeal was timely. Although Federal Rule of Appellate Procedure 4(a)(4) not applicable since the appeal was not from a final judgment, the court held that rule simply restates an rule of practice. The accepted practice that a motion for reconsideration tolls the time for appeal. The court reasoned that district judges should have the same opportunity as appellate judges to reconsider their orders before forcing litigants to petition for appeal under Rule 23(f). …
Publication Year: 2000
Publication Date: 2000-10-01
Language: en
Type: article
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