The United States Supreme Court today ended the controversial tactic of self-inflicted finality, wherein a class action plaintiff that has been denied certification and denied 23f review creates its own “final judgment” by voluntarily dismissing its own case, while reserving the right to appeal the denial of class certification.

In Microsoft Corp. v. Baker, the Supreme held that this gambit violates the carefully-calibrated principle of finality set out in the federal statutory review structure, composed of 28 U.S.C. 1291 (review of final decisions), 1292(b) (interlocutory review), and Fed. R. Civ. P. 23(f) (review of class certification decisions):


“We hold that the voluntary dismissal essayed by respondents does not qualify as a ‘final decision’ within the compass of 1291.  The tactic would undermine S 1291’s firm finality principle, designed to guard against piecemeal appeals, and subvert the balanced solution Rule 23(f) put in place for immediate review of class action orders.”


In Baker, the putative class had already been denied class certification once at the district court level, but had filed a second complaint, alleging that an intervening change in Ninth Circuit law had changed the analysis.  The district court disagreed, and granted a motion to strike the class allegations.  Upon denial of Rule 23f review, the plaintiffs voluntarily dismissed their case with prejudice, but stated their intention to appeal the district court’s order granting the motion to strike once the dismissal order had been entered.  On appeal, the Ninth Circuit held that it did indeed have jurisdiction under 1291 to entertain the appeal, and reversed the district court order granting the motion to strike.   The Supreme Court granted certiorari to resolve a circuit split, and promptly reversed the Ninth Circuit.

In addition to subverting the final decision rule embodied in 1291 by facilitating piecemeal appeals, the Supreme Court observed that this approach would read the discretionary aspect of Rule 23f out of existence by making any appeal the plaintiff was willing to dismiss reviewable on demand.  The Court also noted the unfairness of this procedure, as this created a vehicle for review only for plaintiffs, and not for defendants.

How does this change the landscape in the Tenth Circuit?  None.  The Tenth Circuit had already long-held in Bowe v. First of Denver Morg. Investors, 613 F.2d 798, 801 (10th Cir. 1980) that voluntary dismissal cannot fabricate final decision jurisdiction.  The Third, Fourth, and Seventh agreed, with the Ninth and Second Circuits weighing in on the opposite side.  The Eighth Circuit had not yet resolved this issue, and now it need not.

This means that once certification is denied, plaintiffs must either fit their plea for review into a mandamus context, meet the parameters of 1292b, satisfy Rule 23f, or see the case through to final judgment.