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Class Actions — Standards for Interlocutory Review under Federal Rule of Civil Procedure 23(f) of Class Certification Orders

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From Vallario v. Vandehey, 554 F.3d 1259 (10th Cir. 2009):

Interlocutory review of a district court's class certification order is generally appropriate in three types of cases. The first such category is comprised of "death knell cases," which refers to situations in which a questionable class certification order is likely to force either a plaintiff or a defendant to resolve the case based on considerations independent of the merits. See Chamberlan, 402 F.3d at 959; In re Lorazepam, 289 F.3d at 105; see also Fed. R. Civ. P. 23(f) advisory committee's note. For example, where the high costs of litigation grossly exceed an individual plaintiff's potential damages, the denial of class certification sounds the death knell of that plaintiff's claims. See Blair v. Equifax Check Servs., Inc., 181 F.3d 832, 834 (7th Cir. 1999). In the same vein, if class certification is granted, a defendant's potential liability may be so enormous that settlement "becomes the only prudent course." Carpenter, 456 F.3d at 1189.

An interest in facilitating the development of the law may also justify granting a petition for interlocutory review.... But this second category of cases is narrow…. To come within its bounds, a certification decision must involve an unresolved issue of law relating to class actions that is likely to evade end-of-case review, and this issue must be significant to the case at hand, as well as to class action cases generally…. Because law may develop through affirmances as well as reversals, the merits of the district court's certification ruling has not factored into our consideration of this type of interlocutory appeal….

Immediate review of a district court's class certification ruling may also be fitting when that decision is manifestly erroneous …. Not every error will meet this threshold…. To be clear, we will not use this third category of cases as a vehicle to micromanage class actions as they evolve in the district court. See Prado-Steiman, 221 F.3d at 1273. But where the deficiencies of a certification order are both significant and readily ascertainable, taking into account the district court's discretion in matters of class certification, interlocutory review is appropriate to save the parties from a long and costly trial that is potentially for naught…. In most instances, a manifest error will be one of law, rather than an incorrect application of the law to a given set of facts….

Although cases ripe for consideration under Rule 23(f) will normally fall into one of these three categories…, we emphasize that our discretion in granting or denying a petition for interlocutory review is broad, and necessarily so…. [S]pecial circumstances may lead us to deny a Rule 23(f) petition in a case that seems to fit into one of the three categories we have described…. Conversely, unique circumstances may lead us to grant a Rule 23(f) petition in a case that falls outside of these bounds.***

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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