Appealing a Class Action Certification Order under Rule 23(f)

Author: Aaron Gott

The most complex, highest stakes litigation in the United States is class action antitrust litigation. And many antitrust cases are litigated as class actions because they involve claims by many consumers of the defendants’ products or services.

If you are a defendant in a federal class action case, you should know that class certification is an important pivot point in the litigation: once the class is certified, it could be a bet-the-company moment where the risk of a large judgment outweighs any considerations about the merits or your likelihood of successfully defending at trial. The fact that you could appeal class certification after trial, a verdict, and final judgment might be cold comfort. There’s a strong chance you’ll be the only defendant who hasn’t settled by then.

Fortunately, there is good news: the Federal Rules of Civil Procedure allow immediate appeals of class certification orders.

But there is also bad news: the courts of appeals have unfettered discretion to decide your class certification appeal—you must persuade the court why it should consider the case immediately rather than after final judgment, as it usually does.

Here are ten things you should know about immediate appeals of class certification orders under Rule 23(f) if you are a party or counsel involved in a class action in federal district court.

1. You don’t have much time.

You only have 14 days from the date of the certification order to file a petition for immediate appeal. Fed. R. Civ. P. 23(f). The 14-day time limit is considered jurisdictional. So there are no extensions: you must either file your petition within 14 days or not file it at all. In fact, the U.S. Supreme Court in Nutraceutical v. Lambert recently held that the 14-day deadline cannot be tolled.

That is just two weeks from when you got the news. No extra time for mailing (to the extent you still do that). No extra time for that Memorial Day Weekend, Fourth of July holiday, or Thanksgiving week smack dab in the middle of that 14 days.

Even without intervening holidays, 14 days is not a lot of time to prepare a brief to convince an appellate court to exercise its “unfettered discretion” to hear your appeal.

So, in practice, you should assume the trial court will rule against you on certification and start working on your Rule 23(f) appeal well in advance of the decision. Defendants in most class actions—particularly antitrust class actions like those we focus on at Bona Law—face ruinous joint and several liability that means most defendants prefer not to risk trial regardless of the risk of liability on the merits. It is worth having the insurance of a head start on a 23(f) petition long before the 14-day timer starts ticking.

You should also consider hiring appellate counsel for purposes of the appeal (more on this below).

2. 23(f) appeals are discretionary and rarely granted.

The U.S. Supreme Court held, back in 1978, that orders denying class certification are not final decisions within the meaning of federal law, and thus are not appealable as a matter of right. After changes from Congress and the Federal Rules of Civil Procedure, Rule 23(f) was created specifically to afford the opportunity for an immediate appeal under at least some circumstances.

But what circumstances qualify for an immediate appeal are up to the judges deciding whether to grant one, as Rule 23(f) appeals are entirely permissive and, in fact, subject to the “unfettered discretion” of the courts of appeals. The committee that drafted Rule 23(f) made sure to highlight this discretion in its notes on the rule.

Thus, a 23(f) petition is a lot like a petition for certiorari to the U.S. Supreme Court. Luckily, a 23(f) petition is much more likely to be granted and a certiorari petition. Though reliable data is hard to come by, the courts of appeal grant around a quarter of all petitions (and they reverse the district court in a little over half the cases in which they grant the petition).

Between a quarter and a third grant about a third of Rule 23(f) petitions, while others appear to exercise their discretion to hear Rule 23(f) appeals much more conservatively.

See below for guidelines on how to convince a court of appeals to take up your 23(f) appeal.

3. The rules on the form and contents of filing are different than merits appeals

Rule 23(f) petitions vary from typical opening briefs in several respects.

Second, the petition has some specific requirements. You must include the questions presented, the relevant facts, the relief sought, the rule that authorizes the appeal and the reasons why the court should grant it, and a copy of the order. You have only get 20 pages to succinctly state complex facts and make complex legal arguments to convince three judges why they should volunteer to do extra work on top of their already crowded mandatory docket. Use those pages wisely.

Third, while an opposing party may file an answer or cross-petition, you do not automatically have the right to file a reply brief. You can, of course, seek leave to file a sur-reply, but these efforts to get the last word in can sometimes do more harm than good. The best practice is to only do it if it’s necessary to address something new raised by the other side.

Fourth, check the local rules. They might include additional requirements or restrictions relating to 23(f) petitions.

4. You must convince the court twice over

First, you must convince the court why it should exercise its “unfettered discretion” to take up your appeal.

Then, you often must also convince the court why it should reverse the district court’s order.

Sometimes courts make both decisions in one stroke. If sufficient evidence of error appears on its face, a court of appeals could summarily reverse or affirm the order. See, e.g., CE Design Ltd. v. King Arch. Metals, Inc., 637 F.3d 721 (7th Cir. 2011). Other times, the court will grant the petition and order briefing on the merits.

What this means in practice is that your petition should be compelling in both respects—why the court should grant it and why it should reverse. You should frame the arguments according to the reasons for granting the petition while applying your merits arguments within that framework.

5. There are several reasons why the court might grant a petition

As explained above, courts of appeals have “unfettered discretion” in deciding whether to grant a petition for review. In practice, however, most courts have set forth a test or series of factors for cases warranting review. Each circuit has developed such a standard or test excerpt the Eight Circuit, which declined to do so.

In the First, Second, and Seventh Circuits, for example, there are two situations warranting review of a class certification order under Rule 23(f):

• The class certification order presents a “death-knell situation” for either plaintiffs or defendants, and the class certification or denial is “questionable”;
• The certification presents unsettled and fundamental issues of law related to class actions; or

See, e.g., Blair v. Equifax Check Servs., Inc.,, 181 F.3d 832, 35 (7th Cir. 1999).

• The Third, Ninth, Tenth, and D.C. Circuits, on the other hand, have recognized those two situations as well as a third: review is appropriate where the district court’s certification order is “manifestly erroneous.” See, e.g., Chamberlain v. Ford Motor Co., 402 F.3d 952, 957 (9th Cir. 2005).

The Fourth, Six, and Eleventh Circuits go even further, expanding their analysis to consider the status of the litigation in the district court, pending settlement negotiations, or potential bankruptcy filings.

Much like a petition for a writ of certiorari, your arguments should turn on one or more of these factors (ideally more than one, if applicable). For an example of a petition that applies all three of these Ninth Circuit standards, see a Rule 23(f) petition we filed in the Ninth Circuit here

6. But don’t expect a reason for denial

Strikingly, summary denials of petitions are the rule, not the exception. Less than 10% of petition denials include a published opinion giving reasons for the denial. And since most petitions are denied, that means a lot of rejections without reasons.

7. Remember your appellate standards of review

Typically, class certification orders are reviewed for abuse of discretion. If you’re attacking the district court’s findings of fact or its application of facts to the law, then you should couch your arguments with that standard in mind. But if you are attacking the legal conclusions of the district court, remember that an appellate court should review those conclusions de novo. At the appellate level, the standard of review is crucial.

8. Amicus briefs can help, and so can the trial court

Amicus briefs, particularly those from government entities and respected public interest organizations, can make the difference in any appeal, including Rule 23(f) petitions. Trade associations and similarly situated parties in other cases can also help by abstracting the issues and discussing compelling policy implications that you simply wouldn’t be able to cram into your 20-page petition. An amicus brief shows that a case is important enough that others are looking at it, and that can make the difference.

And so can the trial court. Occasionally, a trial judge will make a comment in the opinion or at the hearing that suggests the issue is one of first impression, hasn’t been clearly decided by the reviewing court, apparent differences in other circuits, or even that the case could be a death-knell to the soon-to-be petitioner. Who better to give credibility to your arguments than the judge who ruled against you?

In fact, the committee notes to Rule 23(f) specifically prod district judges: “the district court can often assist the parties and the court of appeals by offering advice on the desirability of appeal.” Be careful soliciting that advice, however. It might be as unfavorable as the class certification order.

9. Stays are not automatic—and you shouldn’t expect one

Even assuming that the appellate court grants your petition, you shouldn’t expect it to issue a stay of the litigation in the district court. Both the trial court and the appellate court have the authority to issue a stay, but often they do not.

As a practical matter, that means you will continue to spend money litigating in the trial court, which could mean that you have to continue conducting discovery, litigating motions, and even preparing for summary judgment or trial, depending on your case schedule.

The courts of appeals, for purposes of granting or denying a stay, will give substantial weight to the trial court’s decision. In practice, the trial court may be the best place to start in seeking a stay, especially if the prospect of a reversal on a 23(f) petition would mean that the trial court must expend resources dealing with matters that ultimately are rendered unnecessary on remand. In one example, the U.S. District Court for the Middle District of Florida granted a stay application in In Re Disposable Contact Lens Antitrust Litigation based solely on the defendants’ filing of a Rule 23(f) petition (it didn’t wait for the Eleventh Circuit’s decision to grant or deny it).

10. You should consider hiring separate appellate counsel

With any appeal, whether you are a client or trial counsel, you should consider hiring separate appellate counsel.

No matter how good you (if you’re trial counsel) or your trial counsel (if you’re a client) is, a fresh perspective from an appellate specialist can give new clarity and focus to your arguments at the time when that clarity and focus is most needed. That is especially important when you only have 20 pages to describe complicated facts and make complex legal arguments. And it helps to have a team that does it regularly.

There are many reasons you should consider hiring an appellate attorney before you think you need one. Jarod Bona described those reasons in more detail in this post. Those reasons ring particularly true for 23(f) appeals. If you’re working or going to soon be working on your briefing for class certification at the trial court, now is a good time to contact us. If you just got the bad news of a class certification order, you should contact us immediately.