Seyfarth Synopsis: To take an immediate appeal from a federal district court's order granting or denying class certification, a party must first seek permission from the applicable court of appeals "within 14 days after the order is entered." Fed. Rule Civ. Pro. 23(f). In Nutraceutical Corp. v. Lambert, No. 17-1094, 2019 WL 920828, at *4 (U.S. Feb. 26, 2019), the U.S. Supreme Court addressed the question of whether a court of appeals may equitably toll that deadline when an opposing party objects that the appeal is untimely. Because Rule 23(f)s' deadline was meant to be rigorously enforced, the Supreme Court concluded that Rule 23(f) is not subject to equitable tolling – even where good cause for equitable tolling might otherwise exist. The Supreme Court's ruling in Lambert is therefore a "must read" for all corporate counsel involved in workplace class action litigation.
Background To The Case
The facts in Nutraceutical Corp. v. Lambert, No. 17-1094, 2019 WL 920828, at *1 (U.S. Feb. 26, 2019), are straightforward. Troy Lambert sued Nutraceutical Corporation in federal court and was initially successful in obtaining class certification. Id. The District Court subsequently revisited its order and later decertified the class. Id. At that point, Lambert had 14 days under Rule 23(f) to ask the Ninth Circuit for permission to appeal the decertification order. Id.
Instead, Lambert filed a motion for reconsideration, and did so eight days after Rule 23(f)'s 14-day window, but within the timeframe ordered by the District Court. Id. The District Court ultimately denied Lambert's motion for reconsideration, and within 14 days of that decision, Lambert petitioned the Ninth Circuit for permission to appeal the decertification order. Id. Nutraceutical argued that Lambert's petition was untimely because more than four months had elapses since the District Court's order decertifying the class, far more than the 14 days that Rule 23(f) allows. Id.
Nevertheless, the Ninth Circuit deemed Lambert's petition timely, reasoning that Rule 23(f) is non–jurisdictional and subject to equitable tolling. Under the circumstances, the Ninth Circuit concluded that Lambert acted diligently and tolling was warranted. On the merits, the Ninth Circuit reversed the District Court's decertification order. Id.
Nutraceutical thereafter appealed and the U.S. Supreme Court granted certiorari. Justice Sotomayor, writing for a unanimous Supreme Court, reversed and remanded on February 26, 2019. Id.
The SCOTUS Decision
The Supreme Court agreed with the Ninth Circuit that Rule 23(f)'s time limitation is non–jurisdictional because it is found in a procedural rule, not a statute. Id. at *2. Nevertheless, the Supreme Court found that Rule 23(f) is not subject to equitable tolling. Id. The Supreme Court reasoned that although a non–jurisdictional rule is subject to waiver and forfeiture, that does not mean the rule is not mandatory or that it is therefore subject to equitable tolling. Id.
"Whether a rule precludes equitable tolling," explained the Supreme Court, "turns not on its jurisdictional character but rather on whether the text of the rule leaves room for such flexibility." Id. at *3. Because Rule 23(f) conditions an appeal on filing a petition within 14 days, and because Appellate Rule 26(b) expressly states that a court of appeals "may not extend the time to file . . . a petition for permission to appeal," the Supreme Court concluded that there is "clear intent to compel rigorous enforcement of Rule 23(f )'s deadline, even where good cause for equitable tolling might otherwise exist." Id. at *4.
As evidence that Rule 23(f) is amenable to tolling, Lambert argued that every court of appeals to consider the issue has accepted Rule 23(f) petitions filed within 14 days of the resolution of a motion for reconsideration that was itself filed within 14 days of the original order. Id. at *5. Although Lambert's reconsideration motion was not filed within 14 days of the certification ruling, Lambert argued there was no reason to relax the 14 day limit in one situation but not the other. Id. The Supreme Court rejected this argument. It explained that a motion for reconsideration filed within the window to appeal "does not toll anything: it renders an otherwise final decision . . . not final for purposes of appeal." Id. As a result, the Supreme Court declined to address the effect of a motion for reconsideration filed within the 14-day window or whether Lambert's motion would be timely if that had occurred. Id. at *5 fn. 7.
Lambert also argued that the District Court's decision was itself an order granting or denying class action certification under Rule 23(f). Id. at *6. Because the Ninth Circuit did not rule on these grounds, the Supreme Court declined to address these arguments. Id. Instead, the Supreme Court left open the possibility for the Ninth Circuit to address these issues on remand.
At the end of the day, the Supreme Court explained that the "relevant Rules of Civil and Appellate Procedure clearly foreclose the flexible tolling approach on which the Court of Appeals relied to deem Lambert's petition timely." Id. Hence, the Supreme Court reversed and remanded.
Implication For Employers
The takeaway from Lambert is that a court of appeals cannot alter the time for a party to file a petition for permission to appeal under Rule 23(f) – even if good cause might otherwise exist. Employers who wish to appeal an order granting class certification must be sure to do so within the 14-day period allowed by Rule 23(f). Although many courts of appeal have held that a motion for reconsideration filed within fourteen days of the order granting or denying class certification can toll a Rule 23(f) deadline, the Supreme Court's opinion is clear that this nomenclature is not correct. Instead of tolling the Rule 23(f) deadline, a motion for reconsideration simply renders a class certification decision not final for purposes of appeal. The Supreme Court's reluctance to address the effect of a motion for reconsideration filed within the 14-day window should give employers some pause before relying exclusively on a motion for reconsideration. The safest course is to file a petition for permission to appeal within the 14-day time period under Rule 23(f).
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