Amicus Curiae Brief — Microsoft Corp. v. Baker, 136 S. Ct. 890 (2016) (No. 15-457)

No. 15-457 OFFICE OF THE CLERK

IN THE

Supreme Court of the Gnited States

MICROSOFT CORPORATION,

Petitioner,

v.

SETH BAKER, ET AL.,

Respondents.

On Writ of Certiorari

To the United States Court of Appeals

For the Ninth Circuit

BRIEF OF THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA, THE

AMERICAN TORT REFORM ASSOCIATION, AND

THE RETAIL LITIGATION CENTER, INC. AS

AMICI CURIAE IN SUPPORT OF PETITIONER

Kate Comerford Todd Mark W. Mosier

Warren Postman Counsel of Record

U.S. CHAMBER LITIGATION Michael M. Maya

CENTER COVINGTON & BURLING LLP

1616 H. St. NW One CityCenter

Washington, DC 20062 860 Tenth Street, NW

(202) 463-5337 Washington, DC 20004-2401

mmosier@cov.com

Counsel for the Chamber (202) 662-6000

of Commerce of the

United States of America Counsel for Amici Curiae

(Additional Counsel Information on Inside Cover)

0 Bees 2. --- -

H. Sherman Joyce Deborah R. White

Lauren Sheets Jarrell RETAIL LITIGATION CENTER, INC.

AMERICAN TORT REFORM 1700N. Moore Street

ASSOCIATION Suite 2250

1101 Connecticut Avenue, A*ington, VA 22209

NW, Suite 400 ee nsaiaee

Washington, DC 20036 Connesl fer ‘1 Litigation

(202) 682-1168 Center, Ine. Mun catigate

Counsel for American

Tort Reform Association

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .................-..:ccc0sceesseeeneeees i

INTEREST OF THE AMICI CURITAE.............00000000+ 1

INTRODUCTION AND SUMMARY OF

RSE 3

(TENE AE See 6

I. The Ninth Circuit's Voluntary Dismissal

Rule Cannot Satisfy the Requirements of

Either Article ITI or Section 1291. ...................... 6

A. Plaintiffs’ Dismissal With Prejudice

Moots Their Appeal.....................00000--see0eee0es 7

B. Section 1291’s Finality Requirement

Is Not Satisfied If Plaintiffs wand

Revive Their Claims. ............:......00-.0000000++ 11

II. The Ninth Circuit’s Voluntary Dismissal

Rule Wastes Judicial Resources and

Distorts Class Action Practice. ......................... 14

A. The Ninth Circuit's Voluntary

Dismissal Rule Suffers from the

Same Flaws as the Death Knell

SAE TE SSS AO 14

B. The Ninth Circuit's Rule Upsets the

Balance Struck by Federal Rule of

Civil Procedure 23(f\. .. St

Ill. The Ninth Circuit’s Voluntary Dismissal

Rule Cannot Be Saved By Allowing

Plaintiffs To Pursue Appeal After a

Permanent Dismissal of Their Claime. ............ 22

ee Rcnscereccssscsncessssoesevssesvsvessooumecconcseosoenes 25

TABLE OF AUTHORITIES

Page(s)

Cases

Am. Elec. Power Co. v. Connecticut,

i £ 2

Arizonans for Official English v.

Arizona, 520 U.S. 43 (1997) ..............c-sscceceeeseeeeeees 8

AT&T Mobility LLC v. Concepcion,

ee ee BE chitiiccscenctnicncsescnscnccscescccoseee 17

Blair v. Equifax Check Servs., Inc.,

181 F.3d 832 (7th Cir. 1999) .........................-0000 20

Camesi v. Univ. of Pitt. Med. Ctr.,

729 F.3d 239 (3d Cir. 2013)................... 7, 8, 10, 16

Chamberlan v. Ford Motor Co.,

402 F.3d 952 (9th Cir. 2008) .....................00.02e0eee 19

Coopers & Lybrand v. Livesay,

SY Sy MII dcnccdnecenscccesscesseccesacssvessotd passim

Deakins v. Monaghan,

a ileal 8

Deposit Guar. Natl Bank v. Roper,

Lc 10

Eisen v. Carlisle & Jacquelin,

Oe 12

Fairley v. Andrews,

578 F.3d 518 (7th Cir. 2009) .................-..-eeeececeeees 7

Gardner v. Westinghouse Broad. Co,

IT 10

Moses H. Cone Mem. Hosp. v. Mercury

Sea 9

Nashville, Chattanooga & Si. Louis Ry.

v. United States, 113 U.S. 261 (1885) ................... 7

O'Shea v. Littleton,

TE a mE 10

Page Plus of Atlanta, Inc. v. Owl Wireless,

LLC, 733 F.3d 658 (6th Cir. 2013)........................ 8

Rhodes v. E.I. du Pont de Nemours &

Co., 636 F.3d 88 (4th Cir. 2011).......................... 10

Semtek Int'l Inc. v. Lockheed Martin

SG | ee 9

Shady Grove Orthopedic Assocs., P.A. v.

Allstate Ins. Co., 559 U.S. 393 (2010) ................. 17

Summers v. Earth Island Inst.,

I I sanneeeennomnnsonnson 7,10

United States Parole Comm'n v.

Geraghty, 445 U.S. 388 (1980) ...................... 11, 24

United States v. Procter & Gamble Co.,

SEE ER 7, 8,9

Williamson v. Mazda Motor of Am., Inc.,

Be Os Rs BE QE ED ceccccccsnscessnerssssneresccoccoscvenccsse 2

Woodard v. STR Corp.,

170 F.3d 1048 (11th Cir. 1999) .....................0sse0+0- 7

Statute and Rule

cin nn tseceuncemedinmnaeieusnnediaemnainnigieal passim

6 KS TT eres passim

Other Authorities

William P. Barnette, The Limits of Consent:

Voluntary Dismissals, Appeals of Class

Certification Denials, and Some Article

III Problems, 56 S. Tex. L. Rev. 451

John Beisner et al., Study Reveals US Courts

of Appeals Are Less Receptive to

Reviewing Class Certification Rulings

a cnlisiesseioembenien 21

John C. Coffee, Jr., Class Action Accountabil-

ity: Reconciling Exit, Voice, and Loyalty

in Representative Litigation, 100 Colum.

i i iccinecinaseniirtambenntnnnnsennes 24

1V

INTEREST OF THE AMICI CURIAE

The Chamber of Commerce of the United States

of America is the world’s largest business federation.

It represents 300,000 direct members and indirectly

represents the interests of more than three million

companies and professional organizations of every

size, in every industry sector, and from every region

of the country.! A central function of the Chamber is

to represent the interests of its members in matters

before Congress, the Executive Branch, and the

courts, including this Court. To that end, the Cham-

ber regularly files amicus briefs in cases that raise

issues of vital concern to the nation’s business com-

munity, including in cases involving important

issues of class action practice and procedure. See,

e.g., Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146

(filed Aug. 14, 2015); Campbell-Ewald Co. v. Gomez,

No. 14-857 (filed July 23, 2015); Spokeo, Inc. v. Rob-

ins, No. 13-1339 (filed July 9, 2015).

The American Tort Reform Association (“ATRA”)

is a broad-based coalition of businesses, corporations,

municipalities, associations, and professional firms

that have pooled their resources to promote reform of

the civil justice system with the goal of ensuring

1 Pursuant to Supreme Court Rule 37.6, amici affirm that no

counsel for a party authored the brief in whole or in part, that

no counsel or party made a monetary contribution intended to

fund the preparation or submission of this brief, and that no

person other than the amici, their counsel, or their members

made such a monetary contribution. The parties’ consents to

the filing of this brief are on file with the Clerk’s office.

fairness, balance, and predictability in civil litiga-

tion. For over two decades, ATRA has filed amjcus

curiae briefs in cases before this Court and other fed-

eral and state courts addressing issues of importance

to its members. See, e.g., Am. Elec. Power Co. v.

Connecticut, 131 S. Ct. 2527 (2011); Williamson v.

Mazda Motor of Am., Inc., 131 S. Ct. 1131 (2011).

The Retail Litigation Center, Inc. (“RLC”) is a

public policy organization that identifies and engages

in legal proceedings that affect the retail industry.

The RLC’s members include many of the country’s

largest and most innovative retailers. The member

entities whose interests the RLC represents employ

millions of people throughout the United States, pro-

vide goods and services to tens of millions more, and

account for tens of billions of dollars in annual sales.

The RLC seeks to provide courts with retail-industry

perspectives on important legal issues, and to high-

light the potential industry-wide consequences of

significant pending cases.

Businesses are regularly named as defendants in

class actions. The Chamber, ATRA, and RLC, as

well as their members, have a strong interest in en-

suring that the courts correctly apply the federal law

governing appeals of class certification decisions. By

failing to do that here, the Ninth Circuit has allowed

class-action plaintiffs to take immediate appeals of

orders denying class certification even in cases where

the requirements for interlocutory appeal under

Federal Rule of Civil Procedure 23(f) have not been

met. That rule upsets the balance struck by Rule

23(f), allows prolonged litigation of unwarranted

class action lawsuits, and harms amici’s members.

2

INTRODUCTION AND

SUMMARY OF ARGUMENT

Federal law expressly provides a method for par-

ties to seek immediate appellate review of a class

certification order. See Fed. R. Civ. P. 23). Under

Rule 23(f), a party can petition for interlocutory re-

view of the order, and the court of appeals has

discretion to take the appeal and review the class

certification order prior to final judgment. Jd. Im-

portantly, Rule 23(f) applies to orders both granting

and denying class certification, and thus the rule

makes appellate review available on the same terms

to both plaintiffs and defendants.

The Ninth Circuit provides plaintiffs in a puta-

tive class action with an additional method for

obtaining immediate appellate review of an order

denying class certification.2 Under the Ninth Cir-

cuit’s voluntary dismissal rule, a plaintiff may forgo

litigating her claims on the merits and take an im-

mediate appeal of an order denying class certification

by voluntarily dismissing the claims with prejudice

and then appealing under 28 U.S.C. § 1291. Unlike

an appeal under Rule 23(f), the court of appeals has

no discretion to decline jurisdiction over the appeal.

And because this tactic depends on dismissing the

claims—something a defendant cannot do—this

method for obtaining immediate appellate review is

available only to plaintiffs.

2 As this case demonstrates, the Ninth Circuit applies the same

rule when the court grants a defendant’s motion to strike class

allegations from the complaint. Pet. App. 12a.

This is not the first time that a court of appeals

has allowed plaintiffs to appeal an order denying

class certification as a final decision under Section

1291. In the 1970s, several courts of appeals adopted

the “death knell” doctrine, which treated a class cer-

tification denial as a final decision whenever the

order made it “economically imprudent” for the

plaintiff to litigate his individual claims. Coopers &

Lybrand v. Livesay, 437 U.S. 463, 469 (1978). In re-

jecting the death knell doctrine, this Court noted

that the doctrine wasted judicial resources by en-

couraging piecemeal appeals, and that it unfairly

disadvantaged defendants, who had no similar right

to an immediate appeal of orders granting class certi-

fication. Jd. at 470-74. The Ninth Circuit's

voluntary dismissal rule not only suffers from the

same policy flaws as the death knell doctrine, but al-

so ignores basic principles of appellate jurisdiction.

I. When a plaintiff dismisses her claims with

prejudice, there is no longer a live “case or controver-

sy,” as required by Article [II of the U-S.

Constitution. A plaintiff who dismisses her own

claims with prejudice has no right to challenge that

dismissal on appeal and therefore has no further

personal stake in the outcome of the litigation. Ap-

plying this black-letter law, Plaintiffs’ dismissal of

their own claims with prejudice in this case should

have deprived the Ninth Circuit of jurisdiction to de-

cide Plaintiffs’ appeal.

Plaintiffs contend that they can dismiss their

claims “with prejudice” but then later “revive” those

claims on remand if they prevail on appeal. Br. in

Opp. 16 n.4. In other words, Plaintiffs do not really

4

want to dismiss their claims with prejudice; rather,

they wish to conditionally dismiss their claims pend-

ing appeal. Even if that procedural option existed

under the Federal Rules of Civil Procedure—and it

does not—appellate jurisdiction would still be lack-

ing because the order dismissing their claims would

not be sufficiently final to support jurisdiction under

Section 1291.

ll. The Ninth Circuit’s voluntary dismissal rule

not only violates basic principles of appellate juris-

diction, it also reflects a harmful judicial policy. The

rule will waste judicial resources by permitting

piecemeal appeals that the courts of appeals have no

discretion to decline to hear, and it unfairly disad-

vantages defendants because it authorizes

immediate appeals only for plaintiffs. These are pre-

cisely the problems that the Court sought to avoid in

Livesay when it rejected the death knell doctrine,

and there is no reason why they should be tolerated

here. The Ninth Circuit’s rule also undermines Rule

23(f), which permits both plaintiffs and defendants to

seek interlocutory appeals of class certification rul-

ings, while also providing courts of appeals with the

discretion t. decline to hear those appeals.

Ill. An alternative rule under which a named

plaintiff is allowed to represent a class even if her

own claims are permanently extinguished would also

be problematic. This rule would invite the same

problems as the Ninth Circuit’s voluntary dismissal

rule: it would waste judicial resources by encourag-

ing piecemeal appeals and it would benefit only

plaintiffs. The rule would also create pressure for

named plaintiffs to forfeit potentially meritorious

5

claims for the benefit of a putative class and for class

counsel to encourage their clients to dismiss their in-

dividual claims even when doing so is not in their

clients’ best interest.

ARGUMENT

I. The Ninth Circuit’s Voluntary Dismissal

Rule Cannot Satisfy the Requirements of

Either Article III or Section 1291.

The Ninth Circuit's decision leaves open the

question of what happens to Plaintiffs’ individual

claims on remand. Can Plaintiffs withdraw their

voluntary dismissal and resume litigating their indi-

vidual claims on the merits? Or are Plaintiffs’ claims

lost forever? The court of appeals suggested that

Plaintiffs could resume litigating the claims that

they voluntarily dismissed with prejudice, Pet App.

19a, and Plaintiffs have taken the position that their

claims will be “revived.” Br. in Opp. 16 n.4.

This question is important, but not because it de-

termines whether the Ninth Circuit had jurisdiction

to hear the appeal. Regardless of what would hap-

pen on remand, the court lacked appellate

jurisdiction. Rather, the question is important be-

cause it determines why the court lacked

jurisdiction. If Plaintiffs cannot revive their claims

on remand, then the appeal does not present a live

“case or controversy,” as required by Article III. If

Plaintiffs can revive their claims, then the order

dismissing their claims was not sufficiently final to

support jurisdiction under Section 1291. Either way,

appellate jurisdiction was lacking, and the appeal

should have been dismissed.

6

A. Plaintiffs’ Dismissal With Prejudice

Moots Their Appeal.

When a plaintiff voluntarily dismisses her claims

with prejudice, those claims are, by definition, per-

manently extinguished at the plaintiffs request.

Claims that are “dismissed with prejudice are gone

forever.” Camesi v. Univ. of Pitt. Med. Ctr., 729 F.3d

239, 247-48 (3d Cir. 2013); see also Fairley v. An-

drews, 578 F.3d 518, 521-22 (7th Cir. 2009) (claims

dismissed with prejudice are “lost forever”).

A plaintiff cannot appeal the voluntary dismissal

of her own claims because “[ljitigants aren’t ag-

grieved when the judge does what they want.”

Fairley, 578 F.3d at 521 (citing Nashville, Chatia-

nooga & St. Louis Ry. v. United States, 113 U.S. 261

(1885)); Woodard v. STR Corp., 170 F.3d 1043, 1044

(11th Cir. 1999) Gudgment obtained “at the request

of the plaintiff’ was “not appealable” because there

was “no ‘case or controversy’ in regard to it”); see also

William P. Barnette, The Limits of Consent: Volun-

tary Dismissals, Appeals of Class Certification

Denials, and Some Article III Problems, 56 S. Tex. L.

Rev. 451, 459 (2015) (“Limits of Consent”) (“Perhaps

the most prominent, traditional example of the lack

of concrete adverseness is when a plaintiff voluntari-

ly dismisses her complaint.”) (quoting United States

v. Procter & Gamble Co., 356 U.S. 677, 680 (1958)).

To satisfy Article [II's “case or controversy” re-

quirement, a plaintiff must have “a personal stake in

the outcome of the controversy.” Summers v. Earth

Island Inst., 555 U.S. 488, 493 (2009) Gnternal quo-

tation marks and citation omitted). The plaintiffs

7

“direct stake in the outcome” must continue through-

out the litigation, including when the case is on

appeal. Arizonans for Official English v. Arizona,

520 U.S. 43, 64 (1997) (internal quotation marks and

citation omitted).

Applying these principles, this Court has repeat-

edly concluded that a plaintiff who has voluntarily

dismissed her claims may not appeal the dismissal of

those claims. See, e.g., Procter & Gamble Co., 356

U.S. at 680 (noting the “the familiar rule that a

plaintiff who has voluntarily dismissed his complaint

may not sue out a writ of error”); Deakins v. Mona-

ghan, 484 U.S. 193, 199-200 (1988) (voluntarily

dismissed claims are “moot”).

Likewise, numerous courts of appeals have re-

jected the argument that a plaintiff can dismiss

claims “with prejudice” and yet retain the right to

revive those claims later in the litigation. As the

Third Circuit explained, this argument “reflects a

fundamental misunderstanding of the nature of a

dismissal with prejudice.” Camesi, 729 F.3d at 247;

see also Page Plus of Atlanta, Inc. v. Owl Wireless,

LLC, 733 F.3d 658, 662 (6th Cir. 2013) (‘If the possi-

bility of finality alone establishes finality, the word

has no meaning and § 1291 serves little purpose.”).

These courts of appeals have correctly refused to

allow plaintiffs to revive claims that were dismissed

with prejudice because doing so ignores the distinc-

tion between “with prejudice” and “without

prejudice” dismissals. As discussed above, claims

dismissed with prejudice are “gone forever.” Camesi,

729 F.3d at 247. In contrast, claims dismissed with-

8

out prejudice may be revived. See, e.g., Semtek Intl

Inc. v. Lockheed Martin Corp., 531 U.S. 497, 605

(2001) (dismissal without prejudice does not “bar{]

the plaintiff from returning later, to the same court,

with the same underlying claim”).

As a result, if Plaintiffs’ claims were truly dis-

missed with prejudice, then a live “case or

controversy’ no longer exists, and Plaintiffs’ appeal

should be dismissed as moot.

Nor is this a situation in which a plaintiff effec-

tively lost on the merits of her own claim, and then

invited dismissal in order to appeal that adverse rul-

ing. In that situation, because the claims were

adjudicated on the merits, the plaintiff has a person-

al stake in pressing her objections on appeal. Thus,

in Procter & Gamble, 356 U.S. at 680-81, a district

court ordered the United States to produce grand ju-

ry testimony in the course of a civil suit and, when

the government refused and suggested dismissal, the

court dismissed the suit with prejudice. The Su-

preme Court explained that, when the dismissal

occurred, the government “had lost on the merits.”

Id. at 681. In other words, a win on appeal would

revive the government’s own claims.

This narrow exception does not apply here be-

cause Plaintiffs did not lose on the merits of their

individual claims when the district court struck the

class allegations. To the contrary, the district court's

order—like a denial of class certification—had “no

legal effect on the named plaintiffs ability to proceed

with his individual claim.” Moses H. Cone Mem.

Hosp. v. Mercury Const., 460 U.S. 1, 10 n.11 (1983).

9

Because the district court’s ruling on Microsoft’s mo-

tion to strike did not “touch the merits” of Plaintiffs’

claims, Gardner v. Westinghouse Broad. Co, 437 U.S.

478, 482 (1978), Plaintiffs cannot appeal from the

voluntary dismissal of their claims. See also Limits

of Consent, supra at 477 (“The only exception [to the

rule against appealing voluntary dismissals] is

where the interlocutory ruling being challenge effec-

tively operates a ruling on the merits .... By

definition, a ruling denying class certification is pro-

cedural in nature and does not resolve the merits of

the named plaintiffs’ individual claim.”).

Stated differently, Plaintiffs’ desire to represent

others in a putative class action is insufficient to give

them a “personal stake in the outcome of the contro-

versy,” as required by Article III. Summers, 555 U.S.

at 493 (internal quotation marks and citation omit-

ted). When a plaintiffs “substantive claims become

moot in the Art. III sense . . . the court retains no ju-

risdiction over the controversy of the individual

plaintiffs.” Deposit Guar. Nat'l Bank v. Roper, 445

U.S. 326, 332 (1980); see also O’Shea v. Littleton, 414

U.S. 488, 494 (1974) (a named plaintiff who cannot

“establish[] the requisite of a case or controversy”

cannot “seek relief on behalf of himself or any other

member of the class”). As the Fourth Circuit ex-

plained, “when a putative class plaintiff voluntarily

dismisses the individual claims underlying a request

for class certification, ... there is no longer a ‘self-

interested party advocating’ for class treatment in

the manner necessary to satisfy Article III standing

requirements.” Rhodes v. E.I. du Pont de Nemours &

Co., 636 F.3d 88, 100 (4th Cir. 2011); see also Camesi,

729 F.3d at 247-48 (plaintiffs “voluntary dismissal of

10

their claims with prejudice ... has not only extin-

guished [their] individual claims, but also any

residual representational interest that they may

have once had”).3

The well-settled rule precluding an appeal from a

voluntary dismissal bars Plaintiffs’ appeal here. Re-

gardless of whether the district court erred in

striking the class allegations from their complaint,

because Plaintiffs’ individual claims were dismissed

with prejudice, those claims are gone forever and

Plaintiffs have nothing to gain from a favorable rul-

ing on appeal. Plaintiffs thus lack a “personal stake”

in the appeal, and their appeal should be dismissed

as moot.

B. Section 1291’s Finality Requirement Is

Not Satisfied If Plaintiffs May Revive

Their Claims.

Plaintiffs attempt to avoid the consequences of

their own choice to dismiss their claims with preju-

dice by treating it as a conditional dismissal.

8 In United States Parole Commission v. Geraghty, 445 U.S. 388

(1980), the Court recognized a limited exception to this rule to

allow for the eal of a denial of class certification where the

named p s ‘aims become moot through circumstances

outeide the plaintiffs control. See 445 U.S. at 403-04. In reach-

ing this result, the Court noted that it was not

pr we come pelo. sy apply where, as here, a plain-

tiff voluntarily arranges for his claims be dismissed. Id. at 404

n.10 (“We intimate no view as to whether a named plaintiff who

settles the individual claim after denial of class certification

may, consistent with Art. III, appeal from the adverse ruling on

class certification.”)

11

According to Plaintiffs, if they prevail on appeal, they

may “revive” their claims on remand, and thus the

dismissal with prejudice takes effect only if the dis-

trict court’s order striking their class allegations is

affirmed on appeal. Br. in Opp. 16 n.4. This sort of

conditional dismissal does not exist under the Feder-

al Rules of Civil Procedure, and is not what the

district court ordered. In any event, even if Plaintiffs

could have conditionally dismissed their claims pend-

ing appeal, appellate jurisdiction would still be

lacking.

Federal courts of appeals are vested only with

the jurisdiction conferred on them by statute. Sec-

tion 1291—the asserted basis for appellate

jurisdiction here—provides jurisdiction only for ap-

peals from “final decisions” of the district court. 28

U.S.C. § 1291. As the Court explained in Livesay,

“[t]he finality requirement in § 1291 evinces a legis-

lative judgment that ‘[rjestricting appellate review to

“final decisions” prevents the debilitating effect on

judicial administration caused by piecemeal appeal

disposition of what is, in practical consequence, but a

single controversy.” 437 U.S. at 471 (quoting Eisen

v. Carlisle & Jacquelin, 417 U.S. 156, 170 (1974)).

In Livesay, the Court reaffirmed the principle

that appellate review of interlocutory orders typically

must wait until after final judgment, and unani-

mously held that an order denying class certification

is not immediately appealable under Section 1291.

Id. at 470. In reaching this result, the Court ex-

plained that “a district court's order denying or

granting class status is inherently tentative,” be-

cause the order “may be altered or amended before

12

the decision on the merits.” Jd. at 469 n.11 (internal

quotation marks omitted). Given that the “refusal to

certify a class is inherently interlocutory,” any ap-

peal of such an order under Section 1291 must wait

until after the plaintiff has litigated his individual

claims on the merits and final judgment is entered

on those claims. Id. at 470. That is true even if the

order denying class certification sounds the “death

knell” for the plaintiffs’ claims. Jd.

Plaintiffs’ voluntary dismissal rule cannot be

squared with Livesay. Orders denying class certifi-

cation or striking class allegations are just as

tentative and subject to amendment now as they

were when the Court decided Livesay. Yet, as under

the death knell doctrine, the Ninth Circuit allows

plaintiffs who do not wish to pursue their individual

claims to take an immediate appeal of the class certi-

fication denial and, if they prevail on appeal, the

litigation will resume on remand.‘ Because there is

no practical difference between the Ninth Circuit’s

voluntary dismissal rule and the death knell doc-

trine, Livesay compels a holding that Section 1291

does not provide jurisdiction in this case.

4 If anything, the voluntary dismissal rule is even more cap

cious than the death knell doctrine. Under the death knell

doctrine, plaintiffs did not merely have to diamiss their claims;

they had to prove that it would be infeasible for them to pursue

their claims on an individual basis. Livesay, 437 U.S. at 466.

Under the Ninth Circuit’s rule, plaintiffs can dismiss their

claims and take an appeal at whim, even without a finding from

the district court that it would be impractical to continue liti-

gating their claims on an individual basis.

13

Attempting to distinguish Livesay, Plaintiffs con-

tend that Section 1291’s finality requirement is

satisfied here because they voluntarily dismissed

their individual claims with prejudice. Br. in Opp.

16-18. But, as discussed above, if plaintiffs truly

dismissed their claims with prejudice, they would

have no personal stake in an appeal and their case

would be moot. Thus, Plaintiffs’ entire gambit in

this case depends on the argument that the dismissal

of their claims was not, in fact, with prejudice. But if

that is correct—and Plaintiffs’ can revive their

claims on remand—then there is no appellate juris-

diction under Section 1291 for all the same reasons

recognized by this Court in Livesay.

Il. The Ninth Circuit's Voluntary Dismissal

Rule Wastes Judicial Resources and Dis-

torts Class Action Practice.

If Plaintiffs’ claims were truly dismissed with

prejudice, then their appeal is moot. If Plaintiffs’

claims were not dismissed with prejudice, then there

is no final judgment under Section 1291. Any hold-

ing to the contrary would not only be contrary to

settled law, it also would undermine the policies em-

bodied in Section 1291 by encouraging piecemeal

appeals, unfairly prejudice class-action defendants,

and undermine Federal Rule of Civil Procedure 23(f).

A. The Ninth Circuit’s Voluntary Dismissal

Rule Suffers from the Same Flaws as the

Death Knell Doctrine.

In rejecting the death knell doctrine, the Court

recognized at least two fundamental flaws in the doc-

trine: (i) it wastes judicial resources by encouraging

14

piecemeal appeals, and (ii) it applies only to appeals

by plaintiffs of orders denying class certification,

even though defendants have an equally strong in-

terest in obtaining immediate appellate review of

orders granting class certification. See Livesay, 437

at 470-74. The Ninth Circuit’s voluntary dismissal

rule has the same flaws and should be similarly re-

jected.

1. The “principle vice” of the death knell doctrine

was that it “authorize[d] indiscriminate interlocutory

review of decisions made by the trial judge.” Id. at

474. This Court has long recognized that piecemeal

appeals can have a “debilitating effect on judicial

administration.” Jd. at 471 (internal quotation

marks and citation omitted). Yet the death knell

doctrine encouraged piecemeal appeals, because it

allowed a plaintiff to appeal an order denying class

certification before litigating her individual claims on

the merits. See id. at 474. As the Court recognized,

“(t]he potential waste of judicial resources is plain.”

Id. at 473.

As this case demonstrates, the Ninth Circuit’s

voluntary dismissal rule will also waste judicial re-

sources by encouraging piecemeal appeals. In this

case, the court of appeals held that the district court

erred in striking the class allegations because the

district court relied on a ruling that had since been

undermined by an intervening Ninth Circuit deci-

sion. Pet. App. 18a-19a. The Ninth Circuit clearly

stated that it “express[ed] no opinion,” however, on

whether a class should be certified. Pet. App. 19a.

As a result, the district court must consider on re-

mand any grounds for opposing class certification

15

that Microsoft may offer in response to a motion to

certify the putative class. If the district court denies

class certification on any of those grounds, the plain-

tiffs can voluntarily dismiss their claims again and

take another appeal.

To make matters worse, this potential waste of

judicial resources is not limited to piecemeal appeals

of orders denying class certification. Instead, plain-

tiffs will likely argue that the voluntary dismissal

rule can be used to obtain appellate review of any in-

terlocutory order for which they desire immediate

review. In rejecting the death knell doctrine, this

Court acknowledged that there was no principled ba-

sis for limiting the doctrine to class certification

orders. See Livesay, 437 U.S. at 470. The Court ex-

plained: “[I]f the ‘death knell’ doctrine has merit, it

would apply equally to the many interlocutory orders

in ordinary litigation—rulings on discovery, on ven-

ue, On summary judgment—that may have such

tactical econcmic significance that a defeat is tanta-

mount to a ‘death knell’ for the entire case.” Id. The

Third Circuit recently made the same point in reject-

ing the voluntary dismissal rule. See Camesi, 729

F.3d at 245-46 (If the court “were to permit such a

procedural sleight-of-hand, there is nothing to pre-

vent litigants from employing such a tactic to obtain

review of discovery orders, evidentiary rulings, or

any of the myriad decisions that a district court

makes before it reaches the merits of an action.”).

A case currently pending before the Ninth Cir-

cuit demonstrates that this concern is real. In

Strafford v. Eli Lilly and Company, after the district

court denied the plaintiffs’ motions for class certifica-

16

tion, plaintiffs moved to dismiss their individual

claims voluntarily with prejudice, and the district

court granted their motion. See Order, Strafford v.

Eli Lilly & Co., No. 12-9366 (C.D. Cal. Oct. 26, 2015)

(ECF Dkt. No. 203). The plaintiffs subsequently ap-

pealed, challenging not only the class certification

denials but also the district court’s interlocutory rul-

ings on motions to dismiss and for partial summary

judgment, and on a variety of discovery issues. See

Notice of Appeal, Strafford v. Eli Lilly & Co., No. 12-

9366 (C.D. Cal. Nov. 23, 2015) (ECF Dkt. No. 204).

The Ninth Circuit recently denied a motion to stay

the appeal pending this Court’s ruling in this case,

see Order, Strafford v. Eli Lilly & Co., No. 15-56808

(9th Cir. Mar. 7, 2016) (ECF Dkt. No. 6), and thus

the parties will brief a wide range of interlocutory

orders in an appeal brought under the voluntary

2. This Court also concluded that the death knell

doctrine was problematic because it “operate[d] only

in favor of plaintiffs.” Livesay, 437 U.S. at 476. As

the Court explained, “[c]ertification of a large class

may so increase the defendant’s potential damages

liability and litigation costs that he may find it eco-

nomically prudent to settle and to abandon a

meritorious defense.” Jd. The Court recently reiter-

ated that class actions present a significant “risk of

‘In terrorem’ settlements,” because defendants

“[fjaced with even a small chance of a devastating

loss . . . will be pressured into settling questionable

claims.” AT&T Mobility LLC v. Concepcion, 131 S.

Ct. 1740, 1752 (2011); see also Shady Grove Orthope-

dic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393,

445 n.3 (2010) (Ginsburg, J., dissenting) (“A court's

17

decision to certify a class ... places pressure on the

defendant to settle even unmeritorious claims.”).

Given these risks, obtaining immediate appellate re-

view of class certification orders “will often be of

critical importance to defendants.” Livesay, 437 U.S.

at 476.

Like the discredited death knell doctrine, the

Ninth Circuit’s voluntary dismissal rule places class-

action defendants at an unfair disadvantage. Be-

cause only plaintiffs have claims to dismiss, only

plaintiffs can use the Ninth Circuit’s rule to obtain

immediate review of class certification orders. Even

though an order certifying a class can have dramatic

effects on a defendant, defendants have no compara-

ble method for manufacturing an allegedly final

order or for otherwise generating an immediate ap-

peal as a matter of right. The Court should reject

the Ninth Circuit's rule, just as it did the death knell

doctrine.

B. The Ninth Circuit’s Rule Upsets the Bal-

ance Struck by Federal Rule of Civil

Procedure 23(f).

The Ninth Circuit’s voluntary dismissal rule also

interferes witk the discretionary review of class certi-

fication orders provided by Rule 23(f). Adopted in

1998, Rule 23(f) provides for immediate appellate re-

view of class certification orders in _ limited

circumstances. See Fed. R. Civ. P. 23(.5 This rule

5 Rule 23(f) provides, in relevant part: “A court of appeals may

permit an appeal from an order granting or denying class-

action certification under this rule if a petition for permission to

(...continued)

18

did not revive the death knell doctrine that this

Court rejected in Livesay, 437 U.S. at 463. Instead,

it allows for immediate appellate review only in cas-

es selected by the court of appeals, and it does so in a

way that avoids the problems created by the death

knell doctrine and the Ninth Circuit’s voluntary dis-

missal rule.

1. Rule 23() minimizes the possibility of piece-

meal appeals by making interlocutory appeals the

exception, not the rule. Rather than creating a right

to appeal all class certification orders, Rule 23(f)

permits a party to petition for appellate review, and

the court of appeals exercises discretion to decide

whether to hear the case. Fed. R. Civ. P. 23(f).

Courts have stated that “Rule 23(f) review should be

a rare occurrence,” because interlocutory appeals

“are disruptive, time-consuming, and expensive.”

Chamberlan v. Ford Motor Co., 402 F.3d 952, 955,

959 (9th Cir. 2005).

The discretion provided to courts under Rule

23() would become meaningless if this Court up-

holds the Ninth Circuit's voluntary dismissal rule.

Under the Ninth Circuit's rule, a plaintiff can force a

court of appeals to hear an immediate appeal of an

order denying class certification, even if the court al-

ready denied a Rule 23(f) petition. Indeed, that is

precisely what happened in this case. Pet. App. 10a,

12a. In order to further Rule 23(f)’s objective of giv-

appeal is filed with the circuit clerk within 14 days after the

order is entered.” Fed. R. Civ. P. 23(f).

19

ing courts—and not plaintiffs—the discretion to de-

termine which class certification orders deserve

immediate appellate review, the Court should reject

the voluntary dismissal rule.

2. Rule 23(6 also treats plaintiffs and defend-

ants equally by allowing any party to petition for

appellate review of class certification orders. Fed. R.

Civ. P. 23(). The Committee Note explains that the

rule applies to all parties because all parties have an

interest in seeking immediate appellate review:

An order denying certification may con-

front the plaintiff with a situation in

which the only sure path to appellate

review is by proceeding to final judg-

ment on the merits on an individual

claim that, standing alone, is far small-

er than the costs of litigation. An order

granting certification, on the other

hand, may force a defendant to settle

rather than incur the costs of defending

a Class action and run the risk of poten-

tially ruinous liability.

Fed. R. Civ. P. 23 Committee Note (1998).

Consistent with this Committee Note, courts of

appeals have treated plaintiffs and defendants simi-

larly in applying Rule 23(f). As the Seventh Circuit

has explained, “just as a denial of class status can

doom the plaintiff, so a grant of class status can put

considerable pressure on the defendant to settle,

even when the plaintiff's probability of success on the

merits is slight.” Blair v. Equifax Check Servs., Inc.,

181 F.3d 832, 834 (7th Cir. 1999). A recent study

20

found that Rule 23(f) petitions filed by plaintiffs and

defendants are granted at roughly the same rate.®

All parties will no longer be treated equally if the

Court upholds the Ninth Circuit’s voluntary dismis-

sal rule. Defendants can still take an immediate

appeal of an order granting class certification only

when a Rule 23(f petition is granted. Plaintiffs, in

contrast, can first petition for review under Rule

23(f, and—if the petition is denied—they can then

take an appeal as of right under Section 1291 and

the voluntary dismissal rule.

In sum, Rule 23(f) reflects the policy judgments

that immediate appeals of class certification orders

should be allowed only when permitted by the courts

of appeals, and that the opportunity to appeal should

be available on equal terms to both plaintiffs and de-

fendants. Like the death knell doctrine before it, the

Ninth Circuit’s voluntary dismissal rule frustrates

these objectives by allowing plaintiffs, but not de-

fendants, to appeal orders denying class certification

whenever they prefer an immediate appeal over liti-

gating the merits of their claims.

Less Receptive to Reviewing Class Certification Rulings (Apr.

29, 2014), http://bit_ly/1GNGol5.

21

Iil.The Ninth Circuit's Voluntary Dismissal

Rule Cannot Be Saved By Allowing Plain-

tiffs To Pursue Appeal After a Permanent

Dismissal of Their Claims.

Plaintiffs have never argued that, even if their

claims cannot be revived, they may still appeal the

order striking the class allegations from their com-

plaint. But even if this argument were not waived,

the Court should still reject it. The Ninth Circuit's

voluntary dismissal rule cannot be saved by allowing

a named plaintiff who has truly dismissed her claim

with prejudice to nonetheless represent a class. That

is because the desire to represent a class is not

enough to satisfy Article [II]’s “case or controversy”

requirement. See Part I.A.

Moreover, even ignoring the Article III problems,

the Ninth Circuit’s voluntary dismissal rule would

create the very problems that Rule 23(f) was de-

signed to avoid. The potential waste of judicial

resources from piecemeal appeals would still exist—

the only difference would be that each appeal would

be taken by a different named plaintiff. See supra

pp. 16, 19-20. And the rule would still unfairly dis-

advantage defendants, because only plaintiffs can

manufacture a supposedly final judgment by dis-

missing their claims. See supra p. 18.

But the voluntary dismissal rule would also cre-

ate additional problems if a plaintiff could continue

to represent a class after her claim had been dis-

missed with prejudice. If a plaintiff could give up

her claims for the benefit of the putative class, her

personal interests would often be at odds with the

22

interests of her lawyer. This is especially true when

the lawyer has taken the case on a contingency fee,

as is typical for class actions. The plaintiff may pre-

fer to continue litigating her individual claims even if

the potential recovery is relatively small, because a

relatively small recovery is better than no recovery

at all. But the class action lawyer often takes a

plaintiffs case on a contingency fee only for the po-

tential of a class-wide recovery. That lawyer has

little incentive to continue representing the plaintiff

on her individual claims, and thus will have every

incentive to discourage the plaintiff from continuing

to litigate her claims, even if they have merit.

This Court has repeatedly sought to avoid inter-

preting class action rules in a way that creates a

conflict between the interests of plaintiffs and class

counsel. For example, in Standard Fire Insurance

Co. v. Knowles, 133 S. Ct. 1345 (2013), the Court

unanimously rejected the common tactic of plaintiffs’

lawyers’ “stipulating away” putative class claims

above $5 million to evade jurisdiction under the

Class Action Fairness Act. As the Court recognized,

this practice impermissibly allowed named plaintiffs

and their lawyers to give up claims of absent class

members. Id. at 1348-49. Similarly, in Wal-Mart

Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), the

Court rejected an interpretation of Rule 23(b)(2) that

would have “create[d] perverse incentives for class

representatives to place at risk potentially valid

claims for monetary relief.” Id. at 2559.

The potential for conflicts of interest is even

greater here. If counsel is successful in persuading

the named plaintiff to dismiss her claims, counsel

23

can control the litigation on appeal without account-

ability to a client with a personal interest in the

action. It is a foundational principle of legal ethics

that an attorney should abide by the client’s prefer-

ences and litigation goals, rather than his or her own

self-interest. See Model R. of Prof] Conduct 1.2(a).

But here the client’s preferences would be irrelevant

because the client no longer has an interest in the

litigation. As a result, the case would become a mat-

ter of “a lawyer who no longer has a client.” See

Geraghty, 445 U.S. at 424 (Powell, J., dissenting).

Class litigation is already “dysfunctional,” be-

cause often “the principals [i.e., the plaintiffs] cannot

effectively monitor their agent [i.e., their lawyer].”

John C. Coffee, Jr., Class Action Accountability: Rec-

onciling Exit, Voice, and Loyalty in Representative

Litigation, 100 Colum. L. Rev. 370, 371 (2000). Class

action lawyers often “ignore the preferences of indi-

vidual class members” and “define the goals of the

litigation differently than they otherwise would.” Id.

at 379. This happens even when class counsel have

an interested client to whom they owe fiduciary du-

ties. The problem will only be exacerbated if class

counsel can pursue appeals on behalf of a putative

class without a client who has a personal stake in the

case’s outcome.

To minimize these problems, the Court should

reject the Ninth Circuit’s voluntary dismissal rule

and hold that the court of appeals lacked jurisdiction

to hear Plaintiffs’ appeal. That is true regardless of

whether the Ninth Circuit would allow a plaintiff to

revive her claims on remand.

24

CONCLUSION

The judgment of the court of appeals should be

reversed.

Kate Comerford Todd

Warren Postman

NATIONAL CHAMBER

LITIGATION CENTER, INC.

1616 H Street, NW

Washington, DC 20062

Counsel for the Chamber

of Commerce of the United

States of America

H. Sherman Joyce

Lauren Sheets Jarrell

AMERICAN TORT REFORM

ASSOCIATION

1101 Connecticut Avenue,

NW, Suite 400

Washington, DC 20036

Counsel for American Tort

Reform Association

March 2016

Respectfully submitted,

COVINGTON & G LLP

One CityCenter

850 Tenth Street, NW

Washington, DC 20001

mmosier@cov.com

(202) 662-6000

Counsel for amici curiae

Deborah R. White

Retail Litigation Center, Inc.

1700 N. Moore Street

Suite 2250

Arlington, VA 22209

(703) 600-2067

Counsel for Retail Litigation

25