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Consumer Class Actions: 12.2 Interlocutory Appeals Under Rule 23(f) Generally

There is no automatic right to interlocutory appeal of a class certification ruling for granting or denying class certification. Instead, Federal Rule of Civil Procedure 23(f) provides that a court of appeals may in its discretion permit an appeal from an order of a district court granting or denying class action certification.

Consumer Class Actions: 12.3.2 First Circuit Standards

The First Circuit’s flexible standards that govern its exercise of discretionary appellate review under Rule 23(f) were set forth in Waste Management Holdings, Inc. v. Mowbray.42 The court “ordinarily will grant leave to appeal when a Rule 23(f) application falls into” one of three categories, the first two of which are identical to the first two categories set forth by the Seventh Circuit in Blair v.

Consumer Class Actions: 12.3.3 Second Circuit Standards

The Second Circuit set forth the considerations governing its exercise of discretionary appellate review in Sumitomo Copper Litigation v. Credit Lyonnais Rouse, Ltd.50 The court held that “petitioners seeking leave to appeal pursuant to Rule 23(f) must demonstrate” one of the following two circumstances:

Consumer Class Actions: 12.3.4 Third Circuit Standards

In Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., the Third Circuit identified three circumstances in which Rule 23(f) review may be appropriate.57

The first instance is when addressing “the possible case-ending effect of an imprudent class certification decision (the decision is likely dispositive of the litigation).” This category combines the first two Blair case types.

The second instance is when addressing “an erroneous ruling.”58

Consumer Class Actions: 12.3.5 Fourth Circuit Standards

The Fourth Circuit set forth the considerations governing its exercise of discretionary appellate review under Rule 23(f) in Lienhart v. Dryvit Systems, Inc.64 The court adopted “a five-factor ‘sliding scale’ test to guide the consideration of” petitions for review under Rule 23(f) based on the Eleventh Circuit’s discussion of Rule 23(f) in Prado-Steiman v.

Consumer Class Actions: 12.3.6 Fifth Circuit Standards

The Fifth Circuit adopted the standards for granting leave to appeal an order granting class certification that are set forth in the 1987 Advisory Committee Notes to Rule 23(f)—that is, when (1) a “certification decision turns on a novel or unsettled question of law” or (2) “[a]n order granting certification . . .

Consumer Class Actions: 12.3.7 Sixth Circuit Standards

The Sixth Circuit maintains a flexible approach to granting or denying Rule 23(f) review. In In re Delta Air Lines,74 the court considered the criteria proposed by other circuits, beginning with the Seventh Circuit in Blair.

Consumer Class Actions: 12.3.9 Eighth Circuit Standards

In Glover v. Standard Federal Bank,90 the Eighth Circuit Court of Appeals granted review of an order that significantly broadened the class previously certified by the district court. However, the court did not identify the considerations governing its exercise of the discretionary Rule 23(f) review. The plaintiff challenged the court’s jurisdiction under Rule 23(f), arguing that the order did not grant or deny class certification but merely clarified the scope of the already existing class.

Consumer Class Actions: 12.3.10 Ninth Circuit Standards

The Ninth Circuit adopted criteria that should be considered in evaluating whether to permit an interlocutory appeal under Rule 23(f) in the case of Chamberlan v. Ford Motor Co.93 The court stated that it adopted a framework that most closely approximates the standard adopted by the D.C. Circuit in In re Lorazepam.94

Consumer Class Actions: 12.3.11 Tenth Circuit Standards

In Vallerio v. Vandehey,95 the Tenth Circuit adopted criteria for evaluating Rule 23(f) appeals that “most closely” follow the approach of the Ninth Circuit in Chamberlan v. Ford Motor Co., and the D.C. Circuit in In re Lorazepam & Clorazepate Antitrust Litigation.96 The court found review appropriate in three circumstances:

Consumer Class Actions: 12.3.12 Eleventh Circuit Standards

The Eleventh Circuit set forth the considerations governing its exercise of discretionary appellate review under Rule 23(f) in Prado-Steiman v. Bush.98 The court, which was the third court to address the criteria for appeals under Rule 23(f), adopted five “guideposts” that “may be utilized in determining whether to grant an interlocutory appeal under Rule 23(f).”

Consumer Class Actions: 12.3.13 D.C. Circuit Standards

In In re Lorazepam & Clorazepate Antitrust Litigation,105 the D.C. Circuit stated its general view that “interlocutory appeals are generally disfavored as ‘disruptive, time-consuming, and expensive’ for both the parties and the courts.” However, the court identified three circumstances in which Rule 23(f) review is appropriate.

Consumer Class Actions: 12.3.14 Federal Circuit Standards

Because of its limited jurisdiction, the Federal Circuit has not had to squarely address the factors that might govern its exercise of discretionary appellate review under Rule 23(f).111 Instead, the court has issued opinions explaining why it would not apply Rule 23(f) in (1) a case litigated in the Court of Federal Claims;112 (2) a case litigated in the Court of International Trade;113 and (3) an order appealed from the Western District of

Consumer Class Actions: 2.1 Considerations in Choosing Federal or State Court

Analysis of class action litigation has yielded little evidence of across-the-board differences in outcomes based on whether an action is litigated in state or federal court.1 Moreover, any differences found could be subject to variation over time.2 Nevertheless, in any particular case, the choice of forum may have an impact. If the class’s representatives prefer a state court venue and file the case there, the defendant may seek to remove it to federal court.

Consumer Class Actions: 14.9.1 Overview

For a time, there was a growing trend in which class actions were settled on the basis of the defendant’s providing coupons or certificates to class members entitling class members to discounts from the cost of goods or services purchased in the future from the defendant. For reasons explained below, the trend has diminished somewhat since the enactment of the Class Action Fairness Act of 2005 (CAFA), but such settlements sometimes occur, and it is still important to understand their mechanics and pros and cons.

Consumer Class Actions: 2.2 Federal Question Jurisdiction

Federal district courts “have original jurisdictions of all civil actions arising under the Constitution, laws, or treaties of the United States.”23 The most straightforward way to obtain federal court jurisdiction is to bring a claim arising under a federal statute.

Consumer Class Actions: 2.3.1 Overview

The other form of federal subject matter jurisdiction is diversity jurisdiction. The Class Action Fairness Act of 2005 (CAFA), discussed in § 2.4, infra, has dramatically expanded diversity jurisdiction for class actions.

Consumer Class Actions: 2.3.2 Complete Diversity of Citizenship

Federal courts have jurisdiction over cases “between citizens of different states.”43 In the context of class actions not covered by the CAFA, this has been interpreted to mean that all named plaintiffs (though not all class members) must be of different citizenship than all defendants.44

Consumer Class Actions: 2.3.3.2 The Non-Aggregation Rule

A major difference between CAFA and ordinary diversity jurisdiction is that the amount in controversy is measured at the aggregate class level under the CAFA, but at the individual level for ordinary diversity jurisdiction.

Consumer Class Actions: 2.3.3.3 The Common Fund Exception

The common fund exception is a narrow exception to both the non-aggregation rule and the rule that at least one class member must have a claim of $75,000 in order to establish ordinary diversity jurisdiction. Courts have recognized that, “when several plaintiffs unite to enforce a single title or right, in which they have a common and undivided interest,” the claims may be aggregated for purposes of the amount-in-controversy requirement.59

Consumer Class Actions: 2.3.3.4 General Rules of Computation

Unless the common fund exception applies, the amount in controversy for non-CAFA class actions is calculated for individual plaintiffs, rather than the class as a whole. In computing the amount in controversy, the court must consider potential compensatory, statutory, and punitive damages, some but not all attorney fees, and the value of injunctive and other equitable relief. Application of these principles is fraught with difficulty and debate.

Consumer Class Actions: 2.3.3.5 Punitive Damages

Punitive damages that are colorable under the facts and the law count toward the $75,000 amount.62 The claim for punitive damages is viewed as having the same character as the underlying compensatory claims.63 If the underlying claims are individual, the punitive damages award cannot be treated as a common fund.64 Instead, the prospective punitive damage award must be pro-rated among the estimated number of class members.

Consumer Class Actions: 2.3.3.6 Treble or Multiple Damages

If a statutory claim allows for multiple or treble damages, then the actual damages pleaded should be multiplied to determine the amount in controversy.66 As in the case of common-law punitive damages, multiple damages for the whole class are not aggregated and applied to the named representative or treated as a common fund.67