The U.S. Supreme Court has granted certiorari to address 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 individual claims with prejudice. Microsoft Corp. v. Baker, No. 15-457 (cert. granted Jan. 15, 2016). In the proceedings below, the Ninth Circuit held that a stipulated dismissal of an individual claim is an adverse and appealable final judgment and that the plaintiffs did not lose their ability to appeal from a stipulated dismissal with prejudice of their lawsuit and from the order striking their class allegations. A link to the Ninth Circuit’s opinion is available here.
During its next term, the Supreme Court will consider whether class action defendants can end the cases against them simply by offering complete relief to individually named plaintiffs and offering nothing to the classes those plaintiffs purport to represent.
The legal issue involves the intersection of two Federal Rules of Civil Procedure, namely the effect that Rule 68—which allows defendants to serve offers of judgment on specified terms and requires plaintiffs to respond to them—has on Rule 23, which governs class actions. Some circuit courts have held that when a Rule 68 offer of judgment offers a plaintiff all the relief available to him, he can have no further interest in litigation and his legal claims are moot. In the class action context, at least one circuit has further held that when a defendant makes a complete offer of judgment under Rule 68 before the plaintiff has moved for class certification, the plaintiff can have no interest in representing the class. Under this analysis, the plaintiff’s class claims are moot in addition to his or her individual claims.
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A contract provision stating that the parties expressly agreed not to challenge the validity of their arbitration or an arbitration award was held to be contrary to public policy and void and unenforceable. Atlanta Flooring Design Centers, Inc. v. R.G. Williams Construction, Inc., A15A0664 (Ga. Ct. App., 2d Div., July 16, 2015). The contract stated: “The award rendered by the arbitrator(s) shall be final and binding on the parties and judgment upon the award may be entered in any court of competent jurisdiction. Contractor and Subcontractor hereby expressly agree not to challenge the validity of the arbitration or the award.” Applying Georgia law, and relying on cases decided under the Federal Arbitration Act, the court concluded that the statutory grounds for vacating an arbitration award may not be waived or eliminated by contract. The court reasoned that the statutory grounds for a court to review and vacate an award demonstrate Congressional intent to provide a minimum level of due process for parties to an arbitration.