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Supreme Court Decision Aligns with DRI Brief in Microsoft v. Baker

  • Published June 14, 2017
    Modified July 09, 2020

CHICAGO ­– (June 14, 2017)—The June 12th decision of the U.S. Supreme Court in Microsoft v. Baker aligns with DRI’s amicus brief.  The case involves the legitimacy of plaintiff tactics in securing interlocutory review of an adverse class certification decision. The DRI brief was submitted through its Center for Law and Public Policy.  

In 2007, Xbox 360 console owners filed five actions alleging their Xbox 360 consoles had a propensity to scratch game discs.  Plaintiffs sought recovery for breach of warranty, as well as for violation of state consumer protection acts.  After sixteen months of discovery, the district court denied class certification.  The court found individual issues of causation and damages foreclosed certification, particularly given that fewer than 0.4% of Xbox 360 owners even reported disc scratching.  The Ninth Circuit denied a petition for review, the parties settled on an individual basis, and the case was dismissed.

In 2011, however, the same lawyers as in the original lawsuit filed a new action on behalf of different plaintiffs, making the exact same allegations -- but claiming the law on class certification had changed, now permitting class certification.  The district court granted Microsoft's motion to strike the class allegations, finding the reasoning in the initial class certification denial persuasive and holding that nothing in recent case law undermined the earlier court's causation analysis.  The Ninth Circuit again denied plaintiffs' petition seeking review. 

But rather than prosecute their individual claims to final judgment in the district court, the plaintiffs responded by voluntarily dismissing with prejudice and filing a notice of appeal from the dismissal.  The Ninth Circuit, in the reported decision identified above, found it had jurisdiction over the appeal from the voluntary dismissal under its recent decision in Berger v. Home Depot USA, Inc. It then addressed the merits of the order striking the class allegations and reversed, holding that Rule 23 allows classes to be certified on warranty claims when plaintiffs characterize their claims as turning on common factual questions about the alleged existence of a defect.

The Supreme Court opinion reverses the Ninth Circuit’s March 2015 ruling that plaintiffs who were previously unsuccessful in obtaining interlocutory appellate review of class certification denial under Federal Rule of Civil Procedure 23(f) could obtain a second chance at an interlocutory appeal of the certification order simply by voluntarily dismissing their case with prejudice under Rule 41(a) and then appealing that ruling.  DRI argued in its amicus curie that such a tactic ignores the effect of a dismissal with prejudice, runs directly afoul of the discretion vested with the appellate courts to hear interlocutory certification appeals, and distorts the balance of the civil justice system.  DRI also argued that this tactic, which infringes entirely on the final judgment rule, 28 U.S.C. § 1291, would promote piecemeal appeals, “especially when one considers how plaintiffs could use this tactic to obtain review of the many interlocutory orders entered in the typical case outside the class action context.”

The Supreme Court’s decision reversing the Ninth Circuit’s decision expressly notes the concerns raised in DRI’s amicus brief.  In particular, Justice Ruth Bader Ginsburg, writing for the Supreme Court, observed as follows:

“The tactic would undermine § 1291’s firm finality rule, designed to guard

against piece-meal appeals, and subvert the balanced solution Rule 23(f) put

in place for immediate review of class-action orders.” (Opinion, p 2). 

Under Justice Thomas’ concurrence (in which Chief Justice Roberts, Jr. and Justice Alito joined), the lack of jurisdiction over respondents’ appeal was better grounded in Article III of the Constitution (rather than

§ 1291), which limits the jurisdiction of the federal courts to issues presented “in an adversary context[.]”(Concurrence, p 2).  In light of the voluntary dismissal, the concurrence opined that the parties “consented to the judgement against them” and thus “were no longer adverse to each other on any claims[.]”  (Id.).

“We are delighted that the Supreme Court adopted the position advanced by DRI,” said Mary Massaron of Plunkett Cooney, Bloomfield Hills, MI, who co-authored DRI’s amicus brief.   “The Court’s decision restores the careful balance of the civil justice system, which was distorted by the Ninth Circuit’s incorrect decision.”

Brief co-authors Hilary Ballentine and Mary Massaron of Plunkett Cooney (Bloomfield Hills, MI) are available for interview or expert comment through DRI’s Public Policy Office.

For the full text of the Supreme Court’s opinion, click here.


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