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    CIVIL PROCEDURE: Right to Appeal Dismissal of Case Consolidated for Pretrial Proceedings in Multidistrict Litigation

    Posted by Paul A. Ferrer on Wed, Sep 9, 2015 @ 10:09 AM

    The Lawletter Vol 40 No 7

    Paul Ferrer, Senior Attorney, National Legal Research Group

         Federal law permits "civil actions involving one or more common questions of fact" that are pending in different districts to be transferred to any district for coordinated or consolidated pretrial proceedings by the judicial panel on multidistrict litigation ("MDL"). 28 U.S.C. § 1407(a). Another federal statute grants an unsuccessful litigant in a federal district court the right to take an appeal, as a matter of right, from a "final decision" of the district court. Id. § 1291. In Gelboim v. Bank of America Corp., 135 S. Ct. 897 (2015), the Supreme Court decided the question of whether the right to appeal secured by § 1291 is affected when a case is consolidated for MDL pretrial proceedings under § 1407.

         In that case, Gelboim and Zacher filed in the U.S. District Court for the Southern District of New York a class action complaint raising the single claim that a number of banks, acting in concert, had violated federal antitrust law. Their case was consolidated for MDL pretrial proceedings together with some 60 other cases, commenced in different districts, raising one or more common questions of fact under § 1407. The defendant banks moved to dismiss the Gelboim-Zacher complaint on the ground that the plaintiffs had suffered no antitrust injury. The district court granted the motion and dismissed the case in its entirety, without leave to amend the complaint. Other cases made part of the MDL pretrial proceedings, however, presented other discrete claims and remained before the district court.

         Gelboim and Zacher appealed the dismissal of their action to the U.S. Court of Appeals for the Second Circuit. But the Second Circuit dismissed the appeal because the order appealed from did not dispose of all claims in the consolidated action.

         The Supreme Court granted review and reversed, agreeing with Gelboim and Zacher that "the order dismissing their case in its entirety removed them from the consolidated proceeding, thereby triggering their right to appeal under § 1291." Id. at 904. The Court noted the rule that cases consolidated for MDL pretrial proceedings "ordinarily retain their separate identities, so an order disposing of one of the discrete cases in its entirety should qualify under § 1291 as an appealable final decision." Id. (footnote omitted).

         The Court also focused on a practical problem concerning the proper timing of appeals for plaintiffs like Gelboim and Zacher if the dismissal of their case did not qualify for immediate appeal under § 1291. Under Rule 4 of the Federal Rules of Appellate Procedure, which the Supreme Court has called "jurisdictional," id. at 905, a notice of appeal in a civil case must be filed "within 30 days after entry of the judgment or order appealed from," Fed. R. App. P. 4(a)(1)(A). The Court was concerned that if plaintiffs whose actions had been dismissed with prejudice by a district court had to await the termination of pretrial proceedings in all consolidated cases, it would be nearly impossible for them to determine exactly "what event or order would start the 30-day clock" for them to file their appeal. Gelboim, 135 S. Ct. at 905. So the Court went with the "sensible solution to the appeal-clock trigger": When the court overseeing MDL pretrial proceedings grants a dispositive motion on all issues in some of the transferred cases, those cases become immediately appealable, while cases where other issues remain would generally not be appealable at that time. But cases where other issues remain could still be appealed at the same time if the district court granted the appropriate certifications under Rule 54(b) of the Federal Rules of Civil Procedure. See Fed. R. Civ. P. 54(b) ("When an action presents more than one claim for relief . . . or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay."). This commonsense solution to the problem of appeals in MDL cases was delivered by a unanimous Court.

    Topics: Paul A. Ferrer, civil procedure, multidistrict legislation, The Lawletter Vol 40 No 7

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