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

Mupiethe § ttl, abso.

FILED

MAR 18 2016

No. 15-457 OFFICE OF THE CLERK

IN THE

Supreme Court of the United States

MICROSOFT CORPORATION,

Vv.

SETH BAKER, et ai.,

Recpondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF OF WASHINGTON LEGAL FOUNDATION,

NATIONAL ASSOCIATION OF MANUFACTURERS,

INTERNATIONAL ASSOCIATION OF DEFENSE

COUNSEL, AND NFIB SMALL BUSINESS LEGAL

CENTER AS AMICI CURIAE IN SUPPORT OF

PETITIONER

Cory L. ANDREWS

Counsel of Record

MARK S. CHENOWETH

WASHINGTON LEGAL

FOUNDATION

2009 Massachusetts Ave., NW

Washington, DC 20036

(202) 588-0302

March 18, 2016 candrews@wlf.org

A SA

WILSON-EPES PRINTING Co., INC. — (202) 789-0096 — WASHINGTON, D.C. 20002

QUESTION PRESENTED

Whether a federal court of appeals has

jurisdiction under both Article III and 28 U.S.C.

§ 1291 to review an order denying class certification

after the named plaintiffs voluntarily dismiss their

claims with prejudice.

Il.

TABLE OF CONTENTS

THE PARTIES CONTROVERSY BECAME

MooT WHEN THEY AGREED TO DISMISS

THE ENTIRE ACTION, WITH PREJUDICE .........

A. A Justiciable Case Becomes Moot

Once There Is No _ Longer

Adversity of Legal Interests............

B. The Parties’ Stipulated Dismissal

of the Entire Action, with

Prejudice, Destroyed the

Requisite Adversity Under

SE sc venskcncstaktidcititencntimensnctiiaiadamctids

THE NINTH CIRCUIT'S FLAWED

APPROACH TO APPELLATE JURISDICTION

UNDERMINES THIS COURT'S UNANIMOUS

HOLDING IN LIVESAY ...........00..cccccccssescccereees

A. The Holding Below Contravenes

POPP RRR ERE L ER ERE ET TEER

iv

B. The Holding Below Improperly

Favors Plaintiffs over Defendants .. 20

Ill THe NINTH’ CrIRCUITS EXPANSIVE

READING OF § 1291 IS INCONSISTENT

WITH THE PROPER UNDERSTANDING OF

IV. THE NINTH CrirRcurrs HOoLpiInc Is

INCONSISTENT WITH A PLAIN READING OF

Vv

TABLE OF AUTHORITIES

Page(s)

CASES

Allen v. McCurry,

SER RRS eee 13

Already, LLC v. Nike, Inc.,

TE PU 11

Alvarez v. Smith,

TT a ae a Re 11

Arizonans for Official English v. Arizona,

REN ALC 11, 16

Berger v. Home Depot USA, Inc.,

741 F.3d 1061 (9th Cir. 2014)..............-0.......... 5, 6

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

Jf | | Ss % 14

Campbell-Ewald Co. v. Gomez,

| 10, 11

Cent. Trans. Co. v. Pullman’s Palace Car Co.,

i RE A ee ET EEC ae 15

Clapper v. Amnesty Int'l,

EEE a a 1

Coopers & Lybrand v. Livesay,

437 U.S. 463 (1978) ......-o.-cce-coscceecoeeceessesese. passim

Page(s)

Dart Cherokee Basin Operating Co. v. Owens,

a cesipiidipiesaedian 1

Deakins v. Monaghan,

a leeetiasiinns 14, 15

Deposit Guar. Natl Bank v. Roper,

a cuntbeueubbensenme 16

Druhan v. Am. Mut. Life,

166 F.3d 1324 (11th Cir. 1999)....................2..... 14

Eisen v. Carlisle & Jacquelin,

i ccsiesteiiientunsiniainainis 3

Evans v. Phillips,

17 U.S. (4 Wheat.) 73 (1819).................cccecceceeee: 15

Flast v. Cohen,

RE 10

Gardner v. Westinghouse Broad. Co.,

EE cee 10

Goodyear Dunlop Tires Operations, S.A. v. Brown,

a cniiaieiobommpeniel 1

Hall v. Beals,

I tial 14

Harrison v. Edison Bros. Apparel Stores, Inc.,

924 F.2d 530 (4th Cir. 1991)....................00000-000 13

Page(s)

Hertz Corp. v. Friend,

a ee 21

Honig v. Doe,

A Ee ae aR 14

Lewis v. Cont'l Bank Corp.,

a 12

Marshall v. Sielaff,

492 F.2d 917 (3d Cir. 1974) ...............-..c..seecceeeee 19

Moore v. Charlotte-Mecklenburg Bd. of Educ.,

a epemntenneinent 12

Murphy v. Hunt,

TT ee a 11

Nashville, C. & St. L. Ry. Co. v. United States,

i RE SA SR 15

O’Shea v. Littleton,

414 U.S. 488 (1974)................ pnabiahiiontini a

Sanders v. United States,

Cs upisinnenneiieaninanis 16

Semtek Int Inc. v. Lockheed Martin Corp.,

I iii iiceridideielepactatiednadinencnenna 13

Shady Grove Orthopedic Assocs., PA. v.

Allstate Ins. Co., 559 U.S. 393 (2010)................ 20

Page(s)

Standard Fire Ins. Co. v. Knowles,

a cunneninneinia 1

Sullivan v. Pac. Indem. Co.,

566 F.2d 444 (38d Cir. 1977) ............ccccccccceeeeneeees 19

Switzerland Cheese Ass‘n, Inc. v.

E. Horne’s Market, Inc., 385 U.S. 23 (1966)...... 10

United States v. Babbitt,

a scesemapnniimesnbiienns 15

United States v. Evans,

9 U.S. (6 Cranch) 280 (1809)....................20c00000- 15

United States v. Hamburg-Amerikanische

Packetfahrt-Actien Gesellschaft,

meet 12

United States v. Procter & Gamble Co..,

LT 15, 21

United States Parole Comm'n v. Geraghty,

TT TM aE 16

U.S. Bancorp Mortgage Co. v.

Bonner Mall P’ship, 513 U.S. 18 (1994)...... 12, 15

Warfield v. Allied Signal TBS Holdings, Inc.,

267 F.3d 538 (6th Cir. 2001)...................c0--eeeeees 13

Will v. Hallock,

eI icecisctecsovescsntenesonypsenetsestionesesen 18

Page(s)

CONSTITUTIONAL PROVISIONS

Se I I FE ses ccnehtupanndiuisenienssuiaie passim

STATUTES

ETT cetivacesnennbannatnsnnicioniinisenineniienies passim

NE Inna cencictnionsciidiiqenombiesndsinniiel 25

RULES

BP By Ge Bro Si eco ce ccececccccsrssccsscesesssnsesssescn 24

EE BI Be iintnnesorweciqnnerenctntineetipeinnuiesiietaiin 3, 23

tf ese passim

SE TIES TIT Tl iccncddncanatoninidigesonmsnunabiienkédiennumiansiaeed 13

BR Bi Ne By GD cc censtccssernevesnscsccnsersnesoesse 9

TTT ee SATE 1

OTHER SOURCES

Rebecca A. Cochran, Gaining Appellate Review

by “Manufacturing” A Final Judgment Through

Voluntary Dismissal of Peripheral Claims,

48 Mercer L. Rev. 979 (1997)................ccecccceeeeeeees 13

INTERESTS OF AMICI CURIAE'

Washington Legal Foundation (WLF) is a

nonprofit, public-interest law firm and policy center

with supporters in all 50 states. WLF devotes a

substantial portion of its resources to promoting free

enterprise, individual rights, a limited and

accountable government, and the rule of law. To that

end, WLF has frequently appeared in this Court in

cases recognizing limitations on the power of federal

courts to exercise either subject-matter or personal

jurisdiction over parties and proceedings. See, e.g.,

Clapper v. Amnesty Int'l, 133 S. Ct. 1138 (2013);

Goodyear Dunlop Tires Operations, S.A. v. Brown,

131 S. Ct. 2846 (2011). In addition, WLF has long

opposed procedural gamesmanship by the plaintiffs’

bar in federal class-action litigation. See, e.g., Dart

Cherokee Basin Operating Co. v. Owens, 135 S. Ct.

547 (2014); Standard Fire Ins. Co. v. Knowles, 133 S.

Ct. 1345 (2013).

The National Association of Manufacturers

(NAM) is the largest manufacturing association in

the United States, representing small and large

manufacturers in every industrial sector and in all

50 states. Manufacturing employs over 12 million

men and women, contributes roughly $2.1 trillion to

the U.S. economy annually, has the largest economic

1 Pursuant to Supreme Court Rule 37.6, amici state

that no counsel for a party authored this brief in whole or in

part; and that no person or entity, other than amici and their

counsel, made a monetary contribution intended to fund the

preparation and submission of this brief. All parties to this

dispute have consented to the filing of this brief, and letters of

consent have been lodged with the Court.

2

impact of any major sector, and accounts for two-

thirds of private-sector research and development.

NAM’s mission is to enhance the competitiveness of

manufacturers and improve American living

standards by shaping a legislative and regulatory

environment conducive to U.S. economic growth.

The International Association of Defense

Counsel (IADC) is an association of corporate and

insurance attorneys from the United States and

around the globe whose practice is concentrated on

the defense of civil lawsuits. The [ADC is dedicated

to the just and efficient administration of civil justice

and continual improvement of the civil justice

system. The IADC supports a justice system in

which plaintiffs are fairly compensated for genuine

injuries, culpable defendants are held liable for

appropriate damages, and non-culpable defendants

are exonerated and can defend themselves without

unreasonable costs.

The National Federation of Independent

Business Small Business Legal Center (NFIB Legal

Center) is a nonprofit, public-interest law firm

established to provide legal resources and be the

voice for small businesses in the nation’s courts

through representation on issues of public interest

affecting small businesses. The National Federation

of Independent Business (NFIB) is the nation’s

leading small business association, representing

members in Washington, DC, and all 50 state

capitals. Founded in 1943 as a_ nonprofit,

nonpartisan organization, NFIB’s mission is to

promote and protect the right of its members to own,

operate, and grow their businesses. NFIB represents

325,000 member businesses nationwide, and its

3

membership spans the spectrum of business

operations, ranging from sole proprietor enterprises

to firms with hundreds of employees. While there is

no standard definition of a “small business,” the

typical NFIB member employs 10 people and reports

gross sales of about $500,000 a year. The NFIB

membership is a _ reflection of American small

business. To fulfill its role as the voice for small

business, the NFIB Legal Center frequently files

amicus briefs in cases that will impact small

businesses.

Amici strongly support faithful adherence to

the jurisdictional statutes Congress has enacted to

prevent multiple, piecemeal appeals from a single

district court proceeding. By strictly limiting the

occasions in which a party may appeal an adverse

ruling, those federal appellate rules “preventi] the

debilitating effect on judicial administratior. caused

by piecemeal appeal disposition of what is, in

practical consequence, but a single controversy.”

Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 170

(1974).

Amici are concerned that affirmance of the

decision below would seriously undermine judicial

administration by effectively providing plaintiffs an

absolute right to immediate review of a district court

order denying a motion to certify a plaintiffs’ class

under Rule 23. Indeed, such a decision could well

result in numerous appeals from a single action.

Affording appeals-as-of-right to unsuccessful class-

certification movants not only contravenes 28 U.S.C.

§ 1291, which manifests Congress’s longstanding

policy against multiple, piecemeal appeals, but it

also undermines Rule 23(f), which permits

4

immediate appeals from class certification orders at

the sole discretion of the appeals court. And whereas

Rule 23(f) applies regardless of which side lost the

class certification issue, the Ninth Circuits

voluntary dismissal tactic benefits only plaintiffs.

STATEMENT OF THE CASE

Article IT], § 2 of the Constitution extends the

“judicial power” of the United States to only “Cases”

and “Controversies.” At the same time, Congress has

granted the courts of appeals “jurisdiction of appeals

from all final decisions of the district courts of the

United States,” subject to limited exceptions. 28

U.S.C. § 1291. At issue here is whether respondents

satisfied the requirements of both Article III and

§1291, thereby providing the Ninth Circuit with

jurisdiction in this case to review the district court’s

order striking respondents’ class allegations from the

complaint.

Petitioner Microsoft Corporation (Microsoft) is

a leading technology company that develops,

manufactures, and sells the Xbox 360 video game

console. Respondents are five individuals who, in

2011, brought a putative class-action lawsuit against

Microsoft alleging defective design of the Xbox 360

and requesting certification of a nationwide class of

all similarly situated purchasers.”

-_——

2 In 2007, the same lawyers representing respondents

in this case brought a nearly identical class action against

Microsoft (also in the Western District of Washington). See Pet.

App. 6a-8a. When the district court denied class certification,

those plaintiffs unsuccessfully petitioned the Ninth Circuit for

interlocutory appeal under Rule 23(f). When the Ninth Circuit

5

On March 27, 2012, on Microsoft’s motion, the

U.S. District Court for the Western District of

Washington struck respondents’ class allegations

from the complaint on the basis that causation and

damages could not be proven in one stroke by

common evidence. Invoking Rule 23(f), respondents

petitioned the Ninth Circuit to grant an

interlocutory appeal of the district court’s order.

Exercising its discretion under Rule 23(f) to grant or

deny such petitions, the Ninth Circuit denied

appellate review, leaving the plaintiffs to pursue

their individual claims on the merits in the district

court. Pet. App. 10a.

Rather than pursue their individual claims to

finality, respondents moved to voluntarily dismiss

their claims with prejudice, declaring their intention

to appeal the district court’s order striking the

complaint’s class allegations. Pet. App. 36a.

Although Microsoft agreed to the district court’s

dismissal of respondents’ claims with prejudice,

Microsoft also maintained that respondents had no

right to appeal the court’s striking of class

allegations following the voluntary dismissal with

prejudice. Ibid. “[Rjeserving to all parties their

arguments as to the propriety of any appeal,” the

district court dismissed respondents’ claims with

prejudice. Jd. at 36a-37a.

Exercising jurisdiction over respondents’

appeal, the Ninth Circuit reversed. The panel

rejected Microsoft's jurisdictional argument solely on

denied the petition, those plaintiffs agreed to resolve their

individual claime with Microsoft.

6

the basis of Berger v. Home Depot USA, Inc., 741

F.3d 1061 (9th Cir. 2014), a decision handed down

after the appeal in the instant case was fully briefed.

Pet. App. lla-12a. The panel did not address

whether respondents—following their voluntary

dismissal of all claims, with prejudice—maintained

sufficient legal stake in the action to satisfy the case-

or-controversy requirement under Article III. Nor

did the panel address Microsoft’s contention that the

interlocutory order striking class allegations was not

a “final decision” within the meaning of

§ 1291. Instead, the panel determined that the only

relevant issue under was whether respondents’

voluntary dismissal of their claims deprived their

appeal of the requisite “adversity.” Ibid.

The panel concluded that respondents

possessed sufficient adversity to warrant exercise of

appellate jurisdiction, noting that Berger had

rejected just such an _ absence-of-adversity

contention:

[Berger] distinguished a _ stipulated

dismissal without a settlement from a

stipulated dismissal with a settlement.

The former retains sufficient adversity

to sustain an appeal. The latter does

not. As this case did not involve

settlement, Berger establishes that

“[we] have jurisdiction under 28 U.S.C.

§ 1291 because a dismissal of an action

with prejudice, even when such

dismissal is the product of a stipulation,

is a sufficiently adverse—and thus

appealable—final decision.”

7

Pet. App. 12a (quoting Berger, 741 F.3d at 1064,

1065).

Turning to the availability of a class action,

the panel concluded that the district court abused its

discretion in striking the class allegations from the

complaint. Pet. App. 19a. At the same time, the

panel expressed no cpinion “on whether the specific

common issues identified in this case are amenable

to adjudication by way of a class action, or whether

plaintiffs should prevail on a motion for class

certification.” Ibid. Nor did the panel even attempt

to address how the district court should proceed in

the absence of any putative class representative with

a live, justiciable claim—all five respondents having

voluntarily dismissed their individual claims with

prejudice. The panel reversed the district court’s

order and remanded for further proceedings

consistent with its opinion.

Microsoft's petition for rehearing en banc was

denied. Pet. App. 5a. This Court granted certiorari.

SUMMARY OF ARGUMENT

The panel below held that a district court’s

adverse class determination becomes an immediately

appealable, final order when the district court

dismisses the action with prejudice—even when such

dismissal results from the plaintiffs’ own motion and

disposes of all claims in the litigation. As shown

below, the Ninth Circuit’s decision constitutes a

sharp departure from many of this Court’s long-

settled precedents and should be reversed.

As a preliminary matter, this case no longer

presents a justiciable case or controversy because

8

respondents voluntarily dismissed all of their claims,

with prejudice, rendering any appeal moot. Neither

party contends that the district court erred in

entering its final judgment disposing of the action

with prejyudice—respondents specifically requested

it, and Microsoft wisely agreed to it. As a result of

that invited dismissal, to which all parties

stipulated, Article III’s adversity requirement is

utterly lacking, and a live dispute between the

parties no longer exists to support federal] subject-

matter jurisdiction—appellate, or otherwise.

But even assuming that Article III is somehow

satisfied, the panel’s holding is utterly inconsistent

with this Court’s landmark decision in Coopers &

Lybrand v. Livesay, 437 U.S. 463, 475 (1978), which

held that allowing a plaintiff to appeal a class

certification denial immediately as of right, rather

than from a final judgment after an adverse trial on

the merits, violates Congress’s longstanding policy

against multiple, piecemeal appeals. Such appeals

are impermissible, the Court explained, even when

the denial of class certification tolls the “death knell”

for the plaintiffs’ entire case.

In addition, the panel’s untethered, expansive

reading of 28 U.S.C. § 1291 is wholly inconsistent

with the proper understanding of that statute. As

this Court has recognized, Congress adopted § 1291's

“final decision” rule to ensure that controversies are

not reviewed by appellate courts in a piecemeal

fashion such as this. But the Ninth Circuit’s decision

undermines § 1291 by permitting, and thus

encouraging, more and more piecemeal appeals. It

also creates unfairness by effectively granting

plaintiffs—but not defendants—an absolute right to

9

immediate review of adverse class-certification

orders.

Lastly, under respondents’ self-serving view of

§ 1291, plaintiffs effectively will get at least two

(rather than one) appeals from adverse class

certification rulings, thereby multiplying their

chances of encountering a sympathetic panel. Such a

result contravenes Federal Rule of Civil Procedure

23), which grants both plaintiffs and defendants

the right to request interlocutory review of class-

certification orders, but provides appeals courts with

absolute, unmreviewable discretion to deny the

request. If the Court were to adopt the reasoning of

the Ninth Circuit, Rule 23(f) would be rendered a

dead letter.

ARGUMENT

I. THE PARTIES’ CONTROVERSY BECAME MOOT

WHEN THEY AGREED TO DISMISS THE ENTIRE

ACTION, WITH PREJUDICE

Well-settled mootness principles control the

outcome of this case. After the Ninth Circuit denied

respondents’ Rule 23(f) petition for interlocutory

review of the district courts order striking

respondents’ class allegations from the complaint,

respondents promptly moved “that this action be

dismissed with prejudice, with all parties to bear

their own costs and fees.” J.A. 122. Microsoft

stipulated to that dismissal, acknowledging that

respondents had the right to voluntarily dismiss the

action under Rule 41(a)(1)(A)@), but pointing out

that respondents would be barred from any further

appeal. Pet. App. 36a.

10

Appellate jurisdiction requires not only an

appeal from a final order under 28 U.S.C. § 1291, but

also the existence of an actual case or controversy

under Article III]. On appeal, respondents sought

review of only the order striking their class

allegations from the complaint; they did not

complain of the “final” order that dismissed all of

their claims with prejudice. Yet the district court's

order striking class allegations had “no direct or

irreparable impact on the merits of the controversy”

and instead “only relate[d] to pretrial procedures.”

Gardner v. Westinghouse Broad. Co., 437 U.S. 478,

482 (1978) (quoting Switzerland Cheese Ass'n, Inc. v.

E. Horne’s Market, Inc., 385 U.S. 23, 24 (1966)).

Therefore, to the extent that respondents now seek

to appeal from the district court’s final judgment

against them—a judgment that extinguished all of

their claims at their own invitation—this Court's

precedents make clear that respondents no longer

enjoy sufficient legal adversity in the action to

satisfy Article III's case-or-controversy requirement.

A. A Justiciable Case Becomes Moot

Once There Is No Longer Adversity

of Legal Interests

Article III, § 2 of the Constitution extends the

“judicial Power” of the United States to only “Cases”

and “Controversies.” U.S. Const. art. II], § 2. This

bedrock jurisdictional requirement ensures that the

federal judiciary confines itself to its constitutionally

limited role of adjudicating “actual and concrete”

disputes. Campbell-Ewald Co. v. Gomez, 136 S. Ct.

663, 669 (2016). The central function of Article III's

case-or-controversy requirement is to “limit the

business of federal courts to questions presented in

11

an adversary context and in a form historically

viewed as capable of resolution through the judicial

process.” Flast v. Cohen, 392 U.S. 83, 95 (1968).

Among other things, Article [ITs case-or-

controversy requirement requires that “an actual

controversy ... be extant at all stages of review, not

merely at the time the complaint is filed.” Campbell-

Ewald, 136 S. Ct. at 669 (quoting Arizonans for

Official English v. Arizona, 520 U.S. 43, 67 (1997)).

A case becomes moot, and therefore no longer a case

or controversy for purposes of Article III, “when the

issues presented are no longer ‘live’ or the parties

lack a legally cognizable interest in the outcome.”

Murphy v. Hunt,455 U.S. 478, 481 (1982) (per

curiam); Campbell-Ewald, 136 S. Ct. at 669 (an

action becomes moot when “an _ intervening

circumstance deprives the plaintiff of a personal

stake in the outcome of the lawsuit, at any point in

the litigation”) (internal citation and quotation

omitted).

A central focus of this Court’s case-or-

controversy requirement has been the presence of

adversity. The clash between adverse parties

“sharpens the presentation of issues upon which the

court so largely depends for illumination of difficult

... questions.” O’Shea v. Littleton, 414 U.S. 488, 494

(1974). A justiciable controversy is one that touches

not merely the parties’ adverse interests but their

adverse legal interests. Stated differently, “[n]jo

matter how vehemently the parties continue to

dispute the lawfulmess of the conduct that

precipitated the lawsuit, the case is moot if the

dispute ‘is no longer embedded in any actual

controversy about the plaintiffs’ particular legal

12

rights.” Already, LLC v. Nike, Inc., 133 S. Ct. 721,

726 (2013) (quoting Alvarez v. Smith, 558 U.S. 87, 93

(2009)).

This Court has long “disposed of moot cases in

the manner ‘most consonant to justice’ ... in view of

the nature and character of the conditions which

have caused the case to become moot.” U.S. Bancorp

Mortgage Co. v. Bonner Mall P’ship, 513 U.S. 18, 25

(1994) (quoting United States v. Hamburg-

Amerikanische Packetfahrt-Actien Gesellschaft, 239

U.S. 466, 477-78 (1916)). The “principal condition” to

which the Court has looked is “whether the party

seeking relief from the judgment below caused the

mootness by voluntary action.” Ibid. Accordingly,

where the parties request “precisely the same result”

from the court, there is no adversity, and therefore

no Article III case or controversy. Moore v. Charlotte-

Mecklenburg Bd. of Educ., 402 U.S. 47, 47-48 (1971)

(holding that no Article III case or controversy exists

where both parties urged that the district court's

desegregation order be set aside).

B. The Parties’ Stipulated Dismissal of

the Entire Action, with Prejudice,

Destroyed the Requisite Adversity

Under Article Il

Respondents’ claims over Microsoft’s alleged

defective design of the Xbox 360 ceased to be

justiciable when respondents voluntarily dismissed

those claims, with prejudice. Because “Article III

denies federal courts the power to decide questions

that cannot affect the rights of litigants in the case

before them,” Lewis v. Contl Bank Corp., 494 U.S.

472, 477 (1990), respondents’ abandonment of their

13

individual claims cannot be reviewed on appeal. As a

result of respondents’ invited dismissal, to which all

parties stipulated, Article’ [III's adversity

requirement is utterly lacking, and a live dispute

between the parties no longer exists to support

federal subject-matter jurisdiction—appellate or

otherwise.

Voluntary dismissals are governed by Rule 41,

which provides for the “voluntary dismissal” of an

“action.” See Fed. R. Civ. P. 41. This Court has

interpreted a plaintiffs voluntary dismissal “with

prejudice” under Rule 41 as equivalent to an

“adjudication upon the merits,” which is ordinarily

subject to res judicata. Semiek Intl Inc. v. Lockheed

Martin Corp., 531 U.S. 497, 505 (2001); Warfield v.

Allied Signal TBS Holdings, Inc., 267 F.3d 538, 542

(6th Cir. 2001) (“A voluntary dismissal with

prejudice operates as a final adjudication on the

merits and has a res judicata effect.”); Harrison v.

Edison Bros. Apparel Stores, Inc., 924 F.2d 530, 534

(4th Cir. 1991) (holding that a voluntary dismissal

with prejudice “is a complete adjudication on the

merits of the dismissed claim[s]”).*

8 Even in those cases where plaintiffs voluntarily

dismiss only peripheral claims to “manufacture” an appeal,

“[t]he distinction between dismissal with and without prejudice

is crucial.” Rebecca A. Cochran, Gaining Appellate Review by

“Manufacturing” A Final Judgment Through Voluntary

Dismissal of Peripheral Claims, 48 Mercer L. Rev. 979, 1009

(1997). “Ignoring labels and searching for intent replaces

district court certainty with uncertainty and speculation. .

When appellate courts ignore or disregard the label assigned to

the dismissal and simply search the record for intent as the

real indicia of finality, the appellate process breaks down.”

Ibid.

14

Under this Court's precedents, “a final

judgment on the merits of an action precludes the

parties or their privies from relitigating issues that

were or could have been raised in that action.” Allen

v. McCurry, 449 U.S. 90, 94 (1980). “Once that

litigation is dismissed with prejudice, it cannot be

resumed in this or any subsequent action.” Deakins

v. Monaghan, 484 U.S. 193, 201 n.4 (1988) (deeming

moot a case where plaintiffs were “barred from

reviving” their claims “in federal court” following

their voluntary dismissal with prejudice). Because

respondents cannot possibly rekindle their claims

against Microsoft, no “speculative contingency”

exists that is “sufficiently real and immediate to

show an existing controversy.” Jd. at 201 & n.4

(citing Hall v. Beals, 396 U.S. 45, 49 (1969); O’Shea,

414 US. at 496).

This case has “therefore lost its character as a

present, live controversy of the kind that must exist

if [this Court is] to avoid advisory opinions.” Beals,

396 U.S. at 48; Honig v. Doe, 484 U.S. 305, 317

(1988) (“That the dispute between the parties was

very much alive when suit was filed ... cannot

substitute for the actual case or controversy that an

exercise of this Court’s jurisdiction requires.”);

Camesi v. Univ. of Pittsburgh Med. Ctr., 729 F.3d

239, 247 (3d. Cir. 2013) (dismissing appeal as moot

because “[t]he claims that Appellants dismissed with

prejudice are gone forever—they are not reviewable

by this Court and may not be recaptured at the

district court level”); Druhan v. Am. Mut. Life, 166

F.3d 1324 (llth Cir. 1999) (dismissing appeal as

moot where the “required adverseness is lacking”

because “final judgment was entered in response to

the plaintiffs motion for a dismissal with prejudice”).

15

In light of these principles, an unbroken line

of this Court’s decisions stretching back to 1809 has

firmly established that a plaintiff cannot appeal the

propriety of a dismissal with prejudice to which he

consented. See Bancorp, 513 U.S. at 25 (“Where

mootness results from [the parties’ agreement] ...

the losing party has voluntarily forfeited his legal

remedy by the ordinary processes of appeal or

certiorari.”); Deakins, 484 U.S. at 200 (“Because this

[dispute] was rendered moot in part by [plaintiffs]

willingness permanently to withdraw their equitable

claims from their federal action, a dismissal with

prejudice is indicated.”); United States v. Procter &

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

(acknowledging the “familiar rule that a plaintiff

who has voluntarily dismissed his complaint may

not sue out a writ of error’); Cent. Trans. Co. v.

Pullman’s Palace Car Co., 139 U.S. 24, 39 (1891)

(“[A] plaintiff, who appears by the record to have

voluntarily become nonsuit, cannot sue out a writ of

error.”); Nashville, C. & St. L. Ry. Co. v. United

States, 113 U.S. 261, 266 (1885) (“[T]he

insurmountable difficulty is that the former decree

appears upon its face to have been rendered by

consent of the parties, and could not therefore be

reversed, even on appeal.”); United States v. Babbitt,

104 U.S. 767, 768 (1881) (“The consent to the

judgment below was in law a waiver of any error

now complained of.”); Evans v. Phillips, 17 U.S. (4

Whea:.) 73, 74 (1819) (“A writ of error will not lie on

a judgment of nonsuit.”); United States v. Evans, 9

U.S. «\ Cranch) 280, 280 (1809) (“It is not ground for

a writ of error that the judge below refused to

reinstate a cause after nonsuit.”).

Respondents invited, then stipulated to,

16

dismissal of their entire action with prejudice.

Because “to qualify as a case fit for feder.J-court

adjudication, an actual controversy must be extant

at all stages of review,” this action is moot, and

respondents may not appeal from the judgment or

any other order below. Arizonans, 520 U.S. at 67.

This is merely a further “application of the principle

that ‘[a] suitor’s conduct in relation to the matter at

hand may disentitle him to the relief he seeks.”

Bancorp, 513 U.S. at 25 (quoting Sanders v. United

States, 373 U.S. 1, 17 (1963)).4

Il. THE NINTH CIRCUIT’S FLAWED APPROACH TO

APPELLATE JURISDICTION UNDERMINES THIS

CouRT’s UNANIMOUS HOLDING IN LIVESAY

The Ninth Circuit has essentially justified its

rule with a “big risk/big reward” rationale. That is, a

¢ This is not a case in which the defendant voluntarily

ceased its own conduct in an attempt to undermine plaintiffs’

continuing stake in the outcome of the litigation. See, e.g.,

United States Parcle Comm'n v. Geraghty, 445 U.S. 388 (1980);

Deposit Guar. Natl Bank v. Roper, 445 U.S. 326 (1980). Both

Roper and Geraghty turned on the critical fact that the events

giving rise to the defendants’ mootness allegations were

engineered by the defendants and were not (as here)

voluntarily initiated and stipulated to by the plaintiffs. As

Chief Justice Burger explained in Roper, the fact that the

plaintiffs opposed the order of dismissal was an important

factor in the Court's determination that the plaintiffs’ post-

judgment appeal from the denial of class-certification was not

moot, because ordinarily a party cannot appeal from a

dispositive order that it instigated. Roper, 445 U.S. at 332

(emphasizing that the “factual context in which this question

arises is important” because the “judgment was entered in [the

plaintiffs’) favor by the court without their consent, and the

case was dismissed over their continued objections”).

17

plaintiff who is willing to risk his entire lawsuit on a

bet that he can get the pre-trial order reversed on

appeal ought to be rewarded by being permitted to

use the gimmick of a voluntary dismissal with

prejudice to obtain immediate appellate review. Not

only does that rationale enjoy no support in this

Court’s precedents, but it actively cuts against this

Court’s unanimous holding in Coopers & Lybrand v.

Livesay, 437 U.S. 463 (1978), which held that orders

concerning class certification are not appealable

final orders under 28 U.S.C. § 1291.

In Livesay, the Court examined and rejected

the “death knell” doctrine, under which several

courts of appeals had exercised jurisdiction over

appeals from district court orders that did not

resolve all issues in the case. See Livesay, 437 U.S.

at 475. Under that doctrine, when deciding whether

to exercise appellate jurisdiction, some appeals

courts examined the impact of the district court

order on the individual case. If those courts

concluded that the costs of trying the individual's

case so exceeded the potential judgment (considering

the plaintiffs resources) that further pursuit of the

plaintiffs claim was improbable, the order was

deemed a “final decision” and thus subject to federal

appellate jurisdiction under § 1291.

In rejecting the “death knell” doctrine as a

basis for permitting appeals from orders denying

class certification, the Court explained that Congress

adopted § 1291’s “final decision” rule to ensure that

controversies are not reviewed by appellate courts in

a piecemeal fashion. Livesay, 437 U.S. at 473.

Recognizing the potential for abusive, frivolous

appeals, this Court concluded that the doctrine

18

“would have a serious debilitating effect on the

administration of justice” by permitting “multiple

appeals” within a single case. Id. at 473-74. Most

relevant here, the Court was critical of the fact that

“the doctrine operates only in favor of plaintiffs even

though the class issue—whether to certify, and if so,

how large the class should be—will often be of

critical importance to defendants as well.” Id. at 476.

The holding below thus creates an anomaly by

affording greater opportunity for plaintiffs than

defendants to obtain judicial review of an adverse

class-certification determination. Inviting such an

untoward result undermines this Court's clear

precedent and does violence to the entrenched policy

opposing piecemeal review. That “finality” rule,

which derives from the Judiciary Act of 1791,

promutes judicial efficiency and deters “the

harassment and cost of a succession of separate

appeals from the various rulings to which a litigation

may give rise.” Will v. Hallock, 546 U.S. 345, 350

(2006) (internal quotations omitted).

A. The Holding Below Contravenes

Livesay’s Policy Against Piecemeal

Appeals

Congress's longstanding policy against

piecemeal appeals, which animated the Livesay

Court’s construction of § 1291 in the context of class-

certification appeals filed before entry of a final

judgment, applies with equal force in the context of

class-certification appeals filed after a voluntary

dismissal with prejudice, which manifests the named

plaintiffs’ refusal to proceed to trial on their

individual claims. As a practical matter, if § 1291

19

were interpreted to permit a plaintiff to obtain

immediate review of every adverse. class-

determination order by procuring a dismissal with

prejudice, it would render the venerable policy

against piecemeal appellate review a dead letter.

It is impossible to overstate the mischief that

the Ninth Circuit’s novel approach to appellate

jurisdiction would foment if left undisturbed. As the

Third Circuit has warned in a very similar context:

If a litigant could refuse to proceed

whenever a trial judge ruled against

him, wait for the court to enter a

dismissal for failure to prosecute, and

then obtain review of the judge's

interlocutory decision, the policy

against piecemeal litigation and review

would be severely weakened. This

procedural technique would in effect

provide a means to avoid the finality

rule embodied in 28 U.S.C. § 1291. To

review the district court’s [order] ...

under the facts of this case is to invite

the inundation of appellate dockets

with requests for review of interlocutory

orders and to undermine the ability of

trial judges to achieve the orderly and

expeditious disposition of cases.

Sullivan v. Pac. Indem. Co., 566 F.2d 444, 445-46 (3d

Cir. 1977) (citing Marshall v. Sielaff, 492 F.2d 917,

919 (3d Cir. 1974)).

Here, as in Livesay, “allowing appeals of right

from orders that turn on the facts of a particular

20

case thrusts appellate courts indiscriminately into

the trial process and thus defeats one vital purpose

of the final-judgment rule—that of maintaining the

appropriate relationship between the respective

courts.” Livesay, 437 U.S. at 476. Unless this Court

reverses the misguided decision below, that “vital

purpose” will be abandoned entirely.

B. The Ninth Circuit's Holding

Improperly Favors Plaintiffs over

Defendants

By adopting a one-sided rule that favors

plaintiffs over defendants, the panel decision

conflicts with Livesay, which cautioned that rules

governing appellate review ought to treat plaintiffs

and defendants even-handedly. Livesay, 437 U.S. at

476 (rejecting the “death knell” doctrine in part

because “the doctrine operates only in favor of

plaintiffs”).

Class-certification decisions severely impact

defendants as well as plaintiffs. Indeed, a decision to

certify a class can just as readily sound the “death

knell” of a_ class-action defense. As Livesay

recognized, “[clertification of a large class may so

increase the defendant’s potential damages liability

and litigation costs that he may find it economically

prudent to settle and to abandon a meritorious

defense. Yet the Courts of Appeals have correctly

concluded that orders granting class certification are

interlocutory.” Ibid.

It is no secret that a “court’s decision to

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

settle even unmeritorious claims.” Shady Grove

21

Orthopedic Assocs., PA. v. Allstate Ins. Co., 559 U.S.

393, 445 n.3 (2010) (Ginsburg, J., dissenting).

Whereas “administrative simplicity is a major virtue

in a jurisdictional statute,” the voluntary dismissal

tactic embraced by the Ninth Circuit is more likely

to result in multiple appeals and protracted

litigation, which not only invite procedural

“gamesmanship, [but] diminish the likelihood that

results and settlements will reflect a claim’s legal

and factual merits.” Hertz Corp. v. Friend, 559 U.S.

77, 94 (2010).

Even so, the panel below created a pathway

for plaintiffs by which they can always obtain pre-

trial appellate review of class-certification orders

without creating a similar pathway for defendants.

That is patently unfair, and this Court should

reverse the deeply flawed decision below.

Ill THE NINTH CIRCuIT’S EXPANSIVE READING

OF § 1291 IS INCONSISTENT WITH THE PROPER

UNDERSTANDING OF THE STATUTE

This is not a case where plaintiffs previously

“lost on the merits” and now “only seek” an

“expeditious review.” See Procter & Gamble Co., 356

U.S. at 681. Barring such circumstances, the Ninth

Circuit opinion fails to explain how an interlocutory

order effectively denying class certification can be

suddenly transformed into a “final decision” within

the meaning of 28 U.S.C. § 1291 when the district

court enters a stipulated order dismissing the entire

case with prejudice.

Simply put, “the fact that an interlocutory

order may induce a party to abandon his claim

22

before final judgment is not a sufficient reason for

considering it a ‘final decision’ within the meaning of

§ 1291.” Livesay, 437 U.S. at 476. The panel’s

contrary reading of 28 U.S.C. § 1291 is inconsistent

with the very purpose of that statute. As this Court

recognized in Livesay, Congress adopted

§ 1291’s “final decision” rule to ensure that

controversies are not reviewed by appellate courts in

a piecemeal fashion as issues arise. The decision

below undermines § 1291 by effectively granting

plaintiffs (but not defendants) an absolute right to

immediate review of adverse class-certification

orders.

Orders denying class certification do not

merge into the judgment (and thus become

reviewable in an appeal under § 1291 from the final

order of dismissal) when the final order of dismissal

results from the plaintiffs’ refusal to prosecute their

claims. A contrary view would allow plaintiffs to use

the dismissal order they procured as a vehicle to

circumvent finality principles and secure piecemeal

review of an interlocutory procedural ruling on class

certification. By failing to address that issue, the

panel implicitly adopted an expansive view of federal

appellate jurisdiction that is inconsistent with

longstanding notions of finality.

Nor is there any principled way to limit an

affirmance solely to interlocutory class-certification

decisions. Under the same reasoning adopted by the

Ninth Circuit, any time a plaintiff is dissatisfied

with a discovery or other interlocutory order, he can

simply dismiss all his claims, take an appeal, and

obtain immediate review of the order. Sanction

orders, discovery orders, even evidentiary orders on

23

motions in limine, could all be appealed by this

artifice. Permitting litigants to undertake piecemeal

appeals whenever they disagree with adverse

interlocutory decisions would unduly delay the

resolution of district court litigation and needlessly

burden the courts of appeals—precisely the outcome

that § 1291 forecloses.

IV. THe NINTH’ CriecurT’s HOLpDING iIs

INCONSISTENT WITH A PLAIN READING OF

FED. R. Crv. P. 23(f)

The panel decision is also inconsistent with

Rule 23(, which grants both plaintiffs and

defendants the right to request interlocutory review

of class-certification orders but provides federal

appellate courts unreviewable discretion to deny

such requests. By conjuring a means by which

plaintiffs can essentially appeal class-certification

orders as of ~ight, the decision below undermines

Congress's directive that the appeals courts’

acceptance of such appeals must be discretionary.

See Advisory Committee Notes Accompanying 1998

Amendments to Rule 23 (“The court of appeals is

given unfettered discretion whether to permit the

appeal, akin to the discretion exercised by the

Supreme Court in acting on a petition for certiorari.

... Permission to appeal may be granted or denied on

the basis of any consideration that the court of

appeals finds persuasive.”).

This case starkly demonstrates the utter

incoherence of Rule 23(f) under the Ninth Circuit’s

view. Here, the Ninth Circuit granted respondents

an appeal-as-of-right, even though a different panel

of that court had previously rejected their Rule 23(f)

24

request for an interlocutory appeal from the district

court's order striking all class allegations from the

complaint. The first appeals court panel’s discretion

uncer Rule 23(f) to reject an interlocutory request

was therefore no longer unreviewable once a second

appe!late panel was permitted to second-guess that

discretionary denial. As a result, not only can

plaintiffs (but not defendants) in the Ninth Circuit

obtain an interlocutory appeal-as-of-right, but

plaintiffs also can effectively get at least two appeals

(rather than one) from adverse class-certification

rulings, thereby multiplying their chances of

encountering a sympathetic panel.®

The Ninth Circuit's holding also effectively

eliminates Rule 23(f)’s directive that petitions for

interlocutory appeals be filed expeditiously. While

23(f) requires such petitions to be filed within 14

days after the adverse order on class determination

is entered, the decision below permits plaintiffs to

delay their appeal until up to 30 days after entry of

that may well be entered months after a class

certification ruling, as was the case here. See Fed. R.

App. P. 4(a)(1)(A) (providing that “the notice of

appeal ... must be filed with the district court within

30 days after entry of the judgment or order

appealed from”).

5 By merely reversing the order striking class

allegations, but expressly declining to evaluate the suitability

of class certification, see Pet. App. 19a, the Ninth Circuit's

ruling in this case creates the strong likelihood of a third

the suitability of class certification, the party opposing that

ruling will almost certainly appeal to the Ninth Circuit.

25

Rule 23( was promulgated in reaction to

Livesay to give courts unfettered discretion to hear

appeals of class-certification rulings, but the

rulemakers quite pointedly did not exercise their

authority under 28 U.S.C. § 2072(c) to define such

rulings as “final” orders appealable as a matter of

right under § 1291. The Ninth Circuit, in contrast,

holds that a _ district courts adverse class

determination becomes an immediately appealable,

final order even when the district court dismisses

the entire action with prejudice—at the plaintiffs

invitation. Not even under the strictly construed

collateral-order doctrine—a narrow exception to the

final-judgment rule—do courts countenance such a

significant departure from settled principles of

finality. See Livesay, 437 U.S. at 468-70.

26

CONCLUSION

For the foregoing reasons, amici curiae

Washington Legal Foundation, National Association

of Manufacturers, International Association of

Defense Counsel, and National Federation of

Independent Business Small Business Legal Center,

respectfully request that the Court reverse the

Respectfully submitted,

Cory L. ANDREWS

Counsel of Record

MARK S. CHENOWETH

WASHINGTON LEGAL

FOUNDATION

2009 Massachusetts Ave. NW

Washington, D.C. 20036

(202) 599-0302

candrews@wlf.org

March 18, 2016