Baker v. Microsoft Corporation Revisited: Video Gaming Company Seeks To Stop Class Action Plaintiffs From Shortcutting The Appeals Process

We recently reported on a Ninth Circuit Court of Appeals opinion reversing a district court's decision to strike class action allegations in a putative class action against Microsoft. Baker v. Microsoft Corp., No. 12-35946, 2015 U.S. App. LEXIS 4317 (9th Cir. Mar. 18, 2015). In Baker v. Microsoft Corporation, the Ninth Circuit panel of judges held that proof that individual class members were damaged by an alleged defect (here, a defect in Xbox 360 video game consoles resulting in scratched game discs) was not necessary for a class action to be certified. Id. at *20. You can read the full article here.

Microsoft has now petitioned the Ninth Circuit for a rehearing en banc, putting a spotlight on a strategy class action plaintiffs have employed to "end-run" the appeals process once they have been denied class certification. Namely, instead of pursuing individual claims to final judgment and then filing an appeal on the denial of class certification, plaintiffs voluntarily dismiss the action so that they can immediately appeal the order denying class certification.

This strategy short cuts the appeals process because class certification orders (granting or denying class certification) are not immediately appealable as a matter of right; the Court of Appeals only has appellate jurisdiction over final judgments. 28 U.S.C. § 1291. Ordinarily, a party can either (1) seek an interlocutory appeal under the discretionary Federal Rule of Civil Procedure 23(f) and/or (2) litigate the claims until a final judgment is entered, and then appeal the class certification order. However, at least some class action plaintiffs are skipping this process by filing dismissals either before or after seeking a Rule 23(f) appeal.

In Baker, the plaintiffs voluntarily dismissed the lawsuit after the district court ordered the class action allegations stricken and the plaintiffs unsuccessfully moved for a Rule 23(f) interlocutory appeal of that order. 2015 U.S. App. LEXIS 4317 at *11-12. The Ninth Circuit held there was appellate jurisdiction following a voluntary dismissal, citing Berger v. Home Depot USA, Inc., 741 F.3d 1061, 1065 (9th Cir. 2014). Id. (We previously reported on other aspects of the Berger opinion here.)

In its petition, Microsoft argues that the Ninth Circuit should rehear the issue of appellate jurisdiction because the...