In 2013, a putative class action was filed against Anheuser-Busch alleging that it mislead consumers into believing that Beck’s beer is a German import, when in fact the company had begun brewing it in St. Louis the prior year. Plaintiffs claimed that labeling statements such as “Originated in Germany,” “German Quality,” and “Brewed Under the German Purity Law of 1516,” along with “Beck’s history of being an imported beer from Germany,” caused consumers to believe they were purchasing beer brewed in Germany. The Defendant pointed out that the label disclosed that the beer was a “Product of USA, Brauerei Beck & Co., St. Louis, MO,” and the carton stated “Brauerei Beck & Co., Beck’s Beer, St. Louis, MO,” but the Court declined to dismiss the case on the pleadings. Marty v. Anheuser-Busch Cos., LLC, 43 F. Supp. 3d 1333 (S.D. Fla. 2014). It later settled for over $20 million.
On Tuesday, March 21, the Supreme Court heard oral argument in Microsoft, Inc. v. Baker. (This blog has previously covered Baker here and here.) Baker addresses whether a plaintiff can render a denial of class certification – which is not otherwise a final appealable order under 28 U.S.C. § 1291 – appealable by voluntarily dismissing her individual claims.
According to Ronald Mann at SCOTUSBlog, the Justices were “deeply skeptical” of this strategy and appeared sympathetic to Microsoft’s argument that a party cannot ask a court to enter a judgment against her and then appeal from that judgment. At one point, Mann reports, Justice Kagan asked: “Why did people think this was the governing law?” Likewise, Justice Roberts commented that if “you told the district court to enter a judgment against you . . . you can’t argue that it shouldn’t have done that.” The Court also appeared sympathetic to Microsoft’s argument that the voluntary dismissal strategy effectively gutted Federal Rule of Civil Procedure 23(f), which grants federal appellate courts discretion to allow interlocutory appeals of class certification rulings. At one point, Justice Ginsburg stated that Rule “23(f) is out the window” if plaintiffs are allowed to appeal a class certification ruling after voluntarily dismissing their individual claims. Ultimately, Mann concluded, “[t]his is one of those arguments in which the [J]ustices leave little doubt about the ultimate outcome,” and he predicts a “prompt and all-but-unanimous reversal of the 9th Circuit.”
The transcript is available here. We will report on the opinion once it issues.
Today, the Supreme Court hears oral argument in Microsoft Corp. v. Baker, which addresses the question of whether a plaintiff may render a denial of class certification appealable by voluntarily dismissing his or her claims with prejudice. (The Consumer Law Roundup’s earlier post on Baker is available here.) As SCOTUSBlog notes, the case pits Microsoft, which argues that this strategy is “a thinly veiled end-run” around both Rule 23(f) and the general rule prohibiting interlocutory appeals of denials of class certification, against the plaintiffs’ bar, which argues that this strategy satisfies the rule against interlocutory appeals by providing an order of dismissal, which is “the paradigmatic final order suitable for appellate review.”
We will provide an update about oral argument shortly.
Updating our previous report on the introduction of proposed class action reform, on March 9, the U.S. House of Representatives passed H.R. 985, the Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017, by a margin of 220-201. The current version of H.R. 985 includes, among other things, the following provisions:
- R. 985 bars federal courts from certifying “a class action seeking monetary relief for personal injury or economic loss unless the party seeking to maintain such a class action affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives.”
- Additionally, H.R. 985 bars certification of “a class action seeking monetary relief unless the class is defined with reference to objective criteria and the party seeking to maintain such a class action affirmatively demonstrates that there is a reliable and administratively feasible mechanism (a) for the court to determine whether putative class members fall within the class definition and (b) for distributing directly to a substantial majority of class members any monetary relief secured for the class.”
- R. 985 also bars federal courts from certifying a class action “with respect to particular issues pursuant to Rule 23(c)(4) of the Federal Rules of Civil Procedure unless the entirety of the cause of action from which the particular issues arise satisfies all of the class certification prerequisites of Rule 23(a) and Rule 23(b)(1), Rule 23(b)(2), or Rule 23(b)(3).”
- R. 985 requires that, “[i]n any class action, all discovery and all other proceedings shall be stayed during the pendency of any motion to transfer, motion to dismiss, motion to strike class allegations, or other motion to dispose of the class allegations, unless the court finds upon the motion of any party that particularized discovery is necessary to preserve evidence or to prevent undue prejudice to that party.”
- R. 985 would require disclosure of third-party litigation funding for any class action.
- Finally, H.R. 985 provides that “[a] court of appeals shall permit an appeal from an order granting or denying class-action certification under Rule 23 of the Federal Rules of Civil Procedure.”
The bill also includes other provisions relating to joinder of parties in personal injury and wrongful death claims removed to federal court, as well provisions affecting multidistrict litigation procedure.
On March 13, the bill was referred to the Senate Committee on the Judiciary. We will continue to monitor this legislation.