Appellate Jurisdiction - Final Judgment Rule - Class Certification Orders - Microsoft Corp. V. Baker

Harvard Law Review, November 2017 | Go to article overview

Appellate Jurisdiction - Final Judgment Rule - Class Certification Orders - Microsoft Corp. V. Baker


Class certification decisions tend to be make-or-break for plaintiffs and defendants alike. It's no surprise, then, that both have devised litigation tactics to help them secure the decisions they need. (1) Last Term, in Microsoft Corp. v. Baker, (2) the Supreme Court rejected a tactic that let plaintiffs engineer the right to appeal adverse class certification orders by volunteering to have their individual claims dismissed with prejudice. (3) The Court's desire to prevent plaintiffs from undermining the policies embodied in 28

U.S.C. [section] 1291 and Rule 23(f) of the Federal Rules of Civil Procedure was reasonable enough. Even so, the Court's reasoning was puzzling--and all the more so because the Court might have reached the same result on neater doctrinal grounds. The Court's opinion makes more sense, perhaps, if the Court was also attempting to avoid the Article III issue lurking in the case, as well as unsettled questions about when Article III issues may safely be avoided. If that diagnosis is right, however, Microsoft suggests that the Court might find itself unable to postpone questions about class action standing in future Terms.

Microsoft released the Xbox 360 in 2005. (4) Soon after, some Xbox 360 owners discovered that their machines left scratches on the game discs inside. (5) In 2007, a group of owners filed a putative class action lawsuit against Microsoft in federal district court, alleging the existence of a design defect. (6) In that case, the district court denied class certification on the ground that individual questions of consumer protection law, causation, and damages predominated over common questions of law and fact. (7) The Ninth Circuit declined to review the district court's order, and the plaintiffs settled their claims. (8) In 2011, Seth Baker and several other Xbox 360 owners (Baker) filed another putative class action against Microsoft in the same district court, alleging the same design defect. (9) This time, the district court granted Microsoft's motion to strike Baker's class allegations (10)--the equivalent of denying class certification (11)--on the ground that comity required it to defer to its own previous denial of class certification. (12) To reach that conclusion, the district court rejected Baker's argument that an intervening Ninth Circuit decision constituted a change in law that made deference inappropriate. (13) Baker petitioned the Ninth Circuit for permission to appeal under Rule 23(f), but the court denied his petition. (14)

At that point, Baker did something artful. Rather than litigate his individual claims to final judgment or pursue other familiar options, (15) Baker volunteered to have his individual claims dismissed with prejudice to create an appealable final decision. (16) Baker and Microsoft filed a joint stipulation and proposed order dismissing Baker's claims with prejudice. (17) The parties disagreed, however, about the effect the dismissal would have if granted--in particular, about whether Baker would have the right to appeal the district court's order striking his class allegations. (18) The district court granted the joint motion and ordered Baker's claims dismissed with prejudice. (19) Baker appealed and challenged the district court's order to strike, but not its dismissal order. (20)

The Ninth Circuit reversed. (21) Writing for the panel, Judge Rawlinson (22) held that the court had jurisdiction under 28 U.S.C. [section] 1291, (23) which gives circuit courts jurisdiction over "all final decisions of the district courts." (24) Because the stipulated-to dismissal was with prejudice and not part of a settlement agreement, Ninth Circuit precedent dictated that it was "a sufficiently adverse--and thus appealable--final deci-sion" under [section] 1291. (25) Judge Rawlinson then reviewed the district court's order to strike Baker's class allegations and held that, in light of developments in Ninth Circuit law since the first Xbox lawsuit, the district court abused its discretion by granting Microsoft's motion to strike. …

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