The court held that Rule 60 relief is appropriate for some plaintiffs who voluntarily dismissed their claims to secure an appeal. But not for all of them.
January 21, 2020
In 2017’s Microsoft Corp. v. Baker, the Supreme Court held that plaintiffs seeking to bring a class action could not voluntarily dismiss their individual claims and immediately appeal the denial of class certification. In doing so, the Supreme Court abrogated a line of Ninth Circuit decisions that allowed this voluntary-dismissal tactic.
The question then arose of what to do with plaintiffs who had voluntarily dismissed their claims before Baker and in reliance on the Ninth Circuit’s pre-Baker caselaw. In November, the Ninth Circuit held in Henson v. Fidelity National Financial, Inc. that these plaintiffs could obtain relief from their dismissals via Rule 60(b)(6). But in last week’s Strafford v. Eli Lilly & Co., the Ninth Circuit affirmed the denial of Rule 60(b)(6) relief for another group of plaintiffs who had relied on that same caselaw; those plaintiff’s circumstances, the court held, did not warrant relief.
So it appears that not all pre-Baker dismissals can be undone.
A brief background on Baker and Henson
Shortly after Henson was decided, I wrote a post—Undoing Voluntary Dismissals of Class Actions After Baker—that covered the Ninth Circuit’s pre-Baker caselaw, Baker’s abrogating that law, and the Ninth Circuit’s decision in Henson. So I’ll be brief here.
Class-certification decisions are interlocutory and—absent an exception to the final-judgment rule—not appealable. Nowadays appeals of these decisions normally come via Rule 23(f), which gives the courts of appeals discretion to hear interlocutory class-certification appeals. But before 2017, a few circuits had condoned another avenue for appealing class-certification decisions without litigating to a final judgment. These circuits allowed plaintiffs who had lost at class certification to stipulate to a conditional and voluntary dismissal of their claims. The plaintiffs could then appeal that dismissal and, in that appeal, obtain review of the class-certification decision. If the court of appeals reversed, the plaintiffs could then revive their individual claims. The plaintiffs were essentially gambling their individual claims on the possibility of reversal on class certification. If the plaintiffs prevailed on appeal, their individual claims were safe and the case would proceed as a class action; if they lost on appeal, their individual claims were gone and the case was over.
Baker rejected this avenue for appeals. As I’ve said several times, Baker was undoubtedly correct in its outcome—the plaintiffs were trying to circumvent Rule 23(f) and manufacture the appeal of an order that they should not have been able to appeal. But a question remained of what to do with all of the plaintiffs who had dismissed their claims in reliance on pre-Baker caselaw and whose cases were still pending when Baker was decided.
In Henson, the Ninth Circuit held that the change in law that Baker wrought warranted undoing these voluntary dismissals via Rule 60(b)(6). The change is law was an “extraordinary circumstance” that could warrant Rule 60(b)(6) relief. Granted, a circuit split existed on the validity of the voluntary-dismissal tactic, so the plaintiffs took some risk of an unfavorable change in law. But there was no indication at the time of the Henson plaintiffs’ appeal that any change was forthcoming; the petition in Baker had not even been filed. As the court saw it, “denying Rule 60(b) relief would treat the voluntary dismissal, which was intended to facilitate appellate review, as a final adjudication of the entire case, even though there had been and was to be no appellate review of the issues the district court had decided, then or later.”
The Ninth Circuit noted that several other considerations weighed in favor of Rule 60(b)(6) relief, including the plaintiffs’ diligence in seeking relief and the absence of any reasonable reliance interests in the finality of the judgment. Weighing all of these considerations, the Ninth Circuit concluded that they “heavily tip[ped] the scale in favor of granting Rule 60(b)(6) relief.”
A different decision on Rule 60(b)(6) relief
Strafford, the Ninth Circuit concluded, was different.
The plaintiffs in Strafford brought a purported class action against Eli Lilly & Co. After losing on several issues in the district court, the plaintiffs voluntarily dismissed their claims with prejudice in an effort to secure appellate review of those adverse decisions. But before the Ninth Circuit could decide their appeal, Baker held that the appellate court lacked jurisdiction to do so. Back before the district court, the plaintiffs moved to reopen their case under Rule 60(b)(6). The district court denied that motion, and the plaintiffs appealed.
The Ninth Circuit affirmed. The court recognized that the change in law that Baker wrought was still an “extraordinary circumstance” that could warrant relief. But the Strafford court also noted that Rule 60(b)(6) requires a case-by-case inquiry. And the circumstances in Strafford were meaningfully different from those in Henson.
For one thing, the parties contested the voluntary dismissal in Strafford. The parties in Henson had stipulated to the dismissal. But the defendant in Strafford had argued that voluntary dismissal of the Strafford plaintiffs’ claims would end the case if there was no appellate jurisdiction. And the cert petition in in Baker had been filed before the Strafford plaintiffs’ claims were voluntarily dismissed. The plaintiffs had thus assumed the risk that the voluntary dismissal might mark the end of their case. The Ninth Circuit accordingly deemed the plaintiffs’ dismissal a “free, calculated, and deliberate choice” that Rule 60(b)()6) should not change.
A questionable decision
When Henson was decided, I wrote that Rule 60(b)(6) relief made sense in these circumstances:
Henson suggests that those who relied on pre-Baker caselaw and whose appeals were still pending when Baker was decided will find some relief back before the district court. And rightfully so. Baker was correct in rejecting the voluntary-dismissal tactic. But that doesn’t mean everyone who relied on pre-Baker caselaw should lose any opportunity for an appeal. Henson thus appears to have steered the best course: although the plaintiffs cannot immediately appeal the class-certification decision via a voluntary dismissal, they don’t have to be stuck with their voluntary dismissals in the district court.
I accordingly have some doubts about Strafford. Granted, the defendant had argued that the case would be over if there was no appellate jurisdiction. But that’s true of any dismissal. And Ninth Circuit precedent at the time held that there was appellate jurisdiction. Further, as the opinion notes, the cert petition in Baker had been only filed when the plaintiffs’ dismissed their claims. A cert petition is rarely the sort of action that should give a party notice of a forthcoming change in the law; lots of cert petitions are filed, with most being denied.
Given the case-by-case nature of Rule 60(b)(6) relief, Henson and Strafford are not necessarily inconsistent. But I think Henson was the better decision. It will be interesting to see what the Ninth Circuit does with the next appeal involving relief from a pre-Baker dismissal.
Strafford v. Eli Lilly & Co., 2020 WL 242700 (9th Cir. 2020), available at the Ninth Circuit and Westlaw.