A group of plaintiffs hoped to hit the reset button on the Ninth Circuit's denial of their Rule 23(f) petition to appeal from an order striking class allegations in their case against Microsoft, the maker of the popular Xbox line of videogame consoles. Plaintiffs, who alleged their Xbox 360 consoles had a tendency to scratch game discs, attempted this reset by appealing the certification order after taking a voluntary dismissal of their putative class action with prejudice.

The Ninth Circuit was persuaded that plaintiffs' voluntary dismissal created a final judgment for purposes of appeal as of right under 28 U.S.C. § 1291. Plaintiffs, however, did not challenge the dismissal order on appeal. Indeed, they had dismissed their substantive claim with prejudice exclusively as a means to appeal the district court's order striking their class allegations.

On certiorari review, the United States Supreme Court rejected that gambit. Specifically, a five-justice majority of Justice Ginsburg, joined by Justices Kennedy, Breyer, Sotomayor, and Kagan, held that a voluntary dismissal with prejudice taken to appeal a rejection of class certification (or the equivalent striking of class allegations) was not a "final decision" under section 1291. The majority reasoned that Congress and the Court had already struck the requisite balance between efficient review of class-certification decisions and piecemeal appeals. Congress did so by enacting 28 U.S.C. § 1292(e), under which, in turn, the Court adopted Rule 23(f) to permit the courts of appeals' discretionary review of orders granting or denying class certification.

Permitting an end-run around Rule 23(f) would, according to the Supreme Court, have "undermine[d] § 1291's firm finality principle, designed to guard against piecemeal appeals, and subvert[ed] the balanced solution Rule 23(f) put in place for immediate review of class-action orders." Plaintiffs had their shot at a discretionary Rule 23(f) appeal, and the Ninth Circuit rejected it. At that point, they had to litigate their individual actions or, perhaps, move forward and seek certification again at a later stage. They could not, however, use a cheat code to manufacture a final appeal by voluntarily dismissing with prejudice.

In a separate concurrence in the judgment, Justice Thomas, joined by Chief Justice Roberts and Justice Alito, would have reached the same result by relying on Article III's constitutional "case or controversy" requirement, rather than the statutory principle of finality codified in 28 U.S.C. § 1291. Per Justice Thomas, plaintiffs' dismissal with prejudice was, in fact, final under section 1291 because it definitively concluded the litigation in the district court. Nevertheless, plaintiffs still lacked a viable basis to appeal because they had affirmatively consented to the judgment issued against them. That consent to dismissal with prejudice meant that they were no longer adverse to Microsoft and had disavowed any right to seek relief against it. The concurring justices reasoned that "it has long been the rule that a party may not appeal from the voluntary dismissal of a claim, since the party consented to the judgment against it." This meant there was no case or controversy between the parties sufficient to support the Article III jurisdiction necessary to pursue an appeal.

Either way, Game Over.

Justice Gorsuch did not participate in the consideration of this case.

Microsoft Corp. v. Baker, No. 15-457, — U.S. —-, 2017 WL 2507341 (U.S. June 12, 2017).

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