The D.C. Circuit allowed a Rule 23(f) class-certification appeal largely because the district court’s explanation for certifying a class was inadequate.
July 27, 2023
In National ATM Council, Inc. v. Visa, Inc., the D.C. Circuit offered a rare explanation for granting a petition to appeal a class-certification grant under Federal Rule of Civil Procedure 23(f). The reasons given were particularly interesting.
The district court certified a class of ATM customers who alleged that Visa and Mastercard’s rules limiting ATM fees violate the antitrust laws. The D.C. Circuit then granted Visa and Mastercard’s Rule 23(f) petition to appeal that class-certification decision. In explaining that grant, the court of appeals noted that the certification order did “not pose an important and unsettled, class action-related legal question that [the D.C. Circuit] must resolve.” Nor did the order “show manifest error by ignoring binding, on-point precedent.”
Instead, the district court’s order was “at least ‘questionable’ insofar as its statements of law were not entirely clear, its citations were not current, and its record analysis was notably terse.” That is, the district court’s explanation was inadequate. The D.C. Circuit noted that the district court had “quoted older, nonbinding district court decisions, and failed to cite the Supreme Court’s most recent case analyzing when common issues predominate over individualized ones under the pertinent class action provision.” And the district court’s statements on proving damages (and related “citations to decades-old, nonbinding cases”) were “arguably . . . in tension with [the D.C. Circuit’s] recent guidance that Rule 23 ‘commands’ the court to take a ‘hard look at the soundness of statistical models that purport to show predominance.’” (Citing In re Rail Freight Rule Surcharge Antitrust Litigation.)
The D.C. Circuit also noted that class certification might be the “death knell” (though technically you might call it a “reverse death knell”) of the case. The monetary stakes of the case—particularly the prospect of treble damages under the Clayton Act—might force Visa and Mastercard to settle rather than litigate the case to an appealable judgment.
The D.C. Circuit concluded that, taken together, “[t]he questionable accuracy of unclear language in the district court’s opinion combine[d] with the ‘death knell’ settlement pressure” warranted a Rule 23(f) appeal. It’s worth nothing, though, that death-knell pressures (or at least claims of those pressures) exist in many damages class actions. So it looks like the district court’s inadequate explanation was the driving reason for allowing the appeal.
The court of appeals went on to affirm the grant of class certification.
National ATM Council, Inc. v. Visa, Inc., 2023 WL 4743013 (D.C. Cir. July 25, 2023), available at the D.C. Circuit and Westlaw