Certification of a class action under Federal Rule of Civil Procedure 23, or of a collective action under the Fair Labor Standards Act or Age Discrimination in Employment Act, often determines the outcome of the case as a practical matter, making appeals of such decisions especially important. Many practitioners may not be familiar with special rules allowing for interlocutory appeals as to class certification or collective action status. Rule 23(f) gives the federal courts of appeals discretion to provide interlocutory review of class certification decisions, while 28 U.S.C. §1292(b) allows for review of decisions on collective action status. This article will offer guidance in navigating the procedural provisions governing such appeals.
Appealing Certification Orders Under Rule 23
Rule 23(f) gives courts of appeals discretion to allow interlocutory appeals from district court orders granting or denying class certification.1 The Supreme Court allowed this departure from the general prohibition on interlocutory appeals because certification is often outcome-determinative, and an early appellate decision on certification may speed the litigation toward an earlier resolution by settlement or other means.2
Practitioners should be aware of two key aspects of the rule: (1) there is a relatively short time period within which a party must seek interlocutory appeal of a certification order; and (2) there is almost no guidance in the rule as to how courts of appeals should exercise their discretion. Accordingly, the analysis below will focus on how practitioners can comply with the strict procedural requirements of Rule 23(f) and how they can increase the likelihood of a successful appeal on the merits, depending on which circuit is considering the appeal.
Time to appeal. Parties seeking interlocutory appeal of a class certification order pursuant to Rule 23(f) must comply with strict timing requirements. In general, motions for permission to appeal under Rule 23(f) must be filed within 14 calendar days of the first district court order denying or granting a motion for certification.3 Some courts have held that they lack jurisdiction to consider a motion filed after the deadline.4
Courts cannot extend the time allowed for Rule 23(f) motions. A party may effectively gain extra time, however, by filing a renewed motion for certification or a motion for reconsideration of the certification decision in the district court within 14 days of the certification order. In general, motions filed after the 14-day period, even if they contain new arguments, will not extend the time period a party has to file a motion for permission to appeal under Rule 23(f).5 As the Seventh Circuit has explained, "[t]he time limit would not be worth anything if it restarted with each new motion. Then the rule might as well say 'at any time' instead of 'within  days.' A short limit would be turned into an indefinite one."6
Standards applied to Rule 23(f) motions for permission to appeal. The committee comments issued with Rule 23(f) state that courts of appeals have "unfettered discretion" to grant or deny petitions and that they may act "on the basis of any consideration that the court of appeals finds persuasive," but also that appeals are proper when the decision "turns on a novel or unsettled question of law, or when, as a practical matter, the decision on certification is likely dispositive of the litigation." Not surprisingly, this language has led to the development of varying approaches in different circuits.
All circuits except for the Fifth and Eighth circuits follow the three core grounds for review first articulated by the Seventh Circuit in Blair v. Equifax Check Services, 181 F.3d 832 (1999). The court in Blair held that review of a certification decision is warranted if the decision is questionable and where: (1) denial of certification would effectively end the case (also known as the "death knell" doctrine); (2) certification would create undue pressure on the defendant to settle the case "even when the plaintiff's probability of success on the merits is slight"; or (3) the appeal would facilitate the resolution of a fundamental issue of law that would otherwise escape review.7
The First and Second circuits generally limit review of Rule 23(f) motions to the grounds articulated in Blair.8 The Third, Ninth, Tenth, and D.C. circuits will also grant review if the district court's decision is "manifestly erroneous,"9 while the Fourth, Sixth, and Eleventh circuits consider the "nature and status of the litigation," including discovery, and the likelihood and impact of future events such as settlement negotiations.10 The Fifth and Eighth circuits have not articulated criteria for considering Rule 23(f) petitions.
How to file a successful Rule 23(f) petition. Although the tests described above suggest that Rule 23(f) petitions should focus on matters other than the merits—settlement pressure and the like—in practice, the essential mission is to demonstrate that the district court's decision was erroneous. Most cases will share the same arguments about the likelihood that the district court's decision will mean the end of the case; it is difficult to innovate in this area most of the time. If your case has unusual facts that show a particular likelihood of settlement pressure—an unusually large class, for example, that threatens financial ruin for the employer—then by all means emphasize those. We have found, though, that in practice appellate courts are open to the argument that a certification decision requires interlocutory review merely because it is wrong.
That said, the petition should not just emphasize the merits of the particular case, but should argue that the district court's decision will set a questionable precedent that will lead the law in the wrong direction. The standards for class and collective certification are a dynamic area of the law. On the Rule 23 side, district courts vary widely in their interpretation of the Dukes decision; some acknowledge its breadth, while others seek to confine it (wrongly, we believe) to enormous classes or only to Title VII discrimination cases. Under the Fair Labor Standards Act (FLSA), courts disagree about what "similarly situated" means, and in particular whether to engraft the increasingly rigorous Rule 23(b)(3) jurisprudence onto FLSA cases. These debates, and the resulting uncertainty of the law, mean that individual district court decisions on class certification are being cited more frequently, and have broader precedential value, than the typical district court decision might. So, for now at least, there are credible arguments that appellate review of certification decisions is necessary to bring greater clarity to the governing law in these important cases.
How to oppose a Rule 23(f) petition for review. Notwithstanding the importance of appellate review described above, most appellate courts have articulated the standard for interlocutory review as narrow and demanding. The Second Circuit, for example, holds that the decision whether to grant interlocutory review "will be tempered by our longstanding view that the district court is often in the best position to assess the propriety of the class…."11 The standard often is described as requiring the petitioner to demonstrate that the district court abused its discretion—always a challenging test—and many courts hold that even greater deference is owed to decisions certifying classes than to those refusing to do so.
Parties opposing interlocutory review should defend the district court's reasoning.12 If the district court has failed to present the best arguments in support of its own decision, take advantage of the doctrine that an appellate court may affirm on any basis revealed by the record, even if not relied upon by the district court.
The opposing party also should argue that the legal issue is not of "fundamental importance to the development of the law of class actions" or that it is not likely to evade review if the petition is denied.13 Emphasize the idiosyncratic aspects of the case that make it unlikely to serve as a useful precedent.
Seeking Review of Collective Action Status
In collective actions, the losing party at certification may seek interlocutory review of the decision under 28 U.S.C. §1292(b). There is no timeframe specified within which a party must seek such an appeal.
Unlike Rule 23(f) petitions, requests for review under §1292(b) require initial certification from the district court to pursue the appeal. A district court may issue an order allowing interlocutory appeal of class or collective status when "there is substantial ground for difference of opinion and…an immediate appeal from the order may materially advance the ultimate termination of the litigation…."14 The appropriate court of appeals may then consider the appeal in its discretion. The interlocutory appeal process will not stay proceedings in the district court unless the district court judge or a judge of the court of appeals orders a stay.15
Because §1292(b) petitions similarly seek exception to the general rule against interlocutory review, courts grant such requests only in rare circumstances.16 The description of the test, however, leaves a lot of room for advocacy. As articulated by the U.S. District Court for the Eastern District of New York, a §1292(b) appeal may be appropriate where the case presents a controlling and "'pure question of law' which the appellate court 'could decide quickly and cleanly without having to study the record'"17; where there is "genuine doubt" as to whether the district court applied the correct legal standard;18 or where immediate appeal would "materially advance the litigation."19 If there are other district court cases raising the same issues, and few appellate decisions, that may indicate a broader issue worthy of circuit attention.
Naturally, the most significant barrier to §1292(b) appeals is that counsel must in effect tell the district court that the decision the judge has just considered, researched, and written was erroneous. That is a delicate matter. In most cases, rather than arguing directly that there is "genuine doubt" about the district court's reasoning, it is more effective to emphasize instead that the issue is an important one on which reasonable minds can differ, and that an appellate pronouncement on the governing legal standards will be beneficial in terminating the case in the district court sooner—an argument almost always of interest to busy district judges—or in clarifying the law for a range of cases.
In opposing motions for certification under §1292(b), consider whether the issues raised were appropriate for a petition under Rule 23(f). While there is little judicial guidance on the issue of whether a class certification decision can be appealed under §1292(b), the Seventh Circuit has explicitly stated that "we do not permit a party to circumvent the 14-day deadline in Rule 23(f) by appealing a denial of class certification under 28 U.S.C. §1292(b)."20
The availability of an immediate appeal from decisions granting or denying certification of class or collective actions is a potentially powerful procedural weapon that can be determinative in many employment cases. Practitioners need to understand the rigorous rules governing these appeals under both Rule 23(f) and §1292(b). Given the very short time frame for filing a petition for appeal under Rule 23(f), in particular, we recommend preparing for the possibility of an appeal even while awaiting a district court ruling.
Mark Harris and Mark Batten are partners at Proskauer Rose in New York and Boston, respectively. Edward Brill, a partner in New York, and Laura Deck, an associate in Boston, assisted in the preparation of this article.
1. Fed. R. Civ. P. 23(f):
Rule 23(f): Appeals. A court of appeals may permit an appeal from an order granting or denying class action certification under this rule if a petition for permission to appeal is filed with the circuit clerk within 14 days after the order is entered. An appeal does not stay proceedings in the district court unless the district judge or the court of appeals so orders.
2. McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, 672 F.3d 482, 484 (7th Cir. 2012) (discussing purpose of Rule 23(f) appeals).
3. Delta Airlines v. Butler, 383 F.3d 1143, 1144 (10th Cir. 2004) (collecting cases).
4. See id. (denying motion for lack of jurisdiction). But see McReynolds, 672 F.3d at 484-85 (declining to decide whether deadline is jurisdictional).
5. See McReynolds, 672 F.3d at 484-85 ("[I]t is easy to think up new arguments"); Asher v. Baxter Intern., 505 F.3d 736, 739 (7th Cir. 2007) (collecting cases).
6. Asher, 505 F.3d at 739 (7th Cir. 2007).
7. Blair, 181 F.3d at 834-35.
8. See, e.g., Sumitomo Copper Litig. v. Credit Lyonnais Rouse, 262 F.3d 134, 139 (2d Cir. 2001) (adopting approach in Blair); Waste Management Holdings v. Mowbray, 208 F.3d 288, 294 (1st Cir. 2000) (adopting approach in Blair and interpreting third category narrowly).
9. Vallario v. Vandehey, 554 F.3d 1259, 1263 (10th Cir. 2009); Chamberlain v. Ford Motor, 402 F.3d 952, 959 (9th Cir. 2005); In re Lorazepam & Clorazepate Antitrust Litig., 289 F.3d 98, 105 (D.C. Cir. 2002); Newton v. Merrill Lynch, Pierce, Fenner & Smith, 259 F.3d 154, 165 (3rd Cir. 2001).
10. In re Delta Airlines, 310 F.3d 953, 958 (6th Cir. 2002); Leinhart v. Dryvit Systems, 255 F.3d 138, 144 (4th Cir. 2001); Prado-Steinman ex. rel. Prado v. Bush, 221 F.3d 1266, 1276 (11th Cir. 2000).
11. Sumitomo, 262 F.3d at 139.
12. Id. at 140 ("Views expressed by the district court at the time of class certification, although not required, would be relevant to our determination of whether interlocutory appeal is warranted").
14. 28 U.S.C. §1292(b).
16. Santiago v. Pinello, 647 F. Supp. 2d 239, 243 (E.D.N.Y. 2009) (citation omitted).
17. Ofori v. Central Parking System of New York, 2010 WL 335498 at *2 (E.D.N.Y. Jan. 22, 2010) (citing Pinello, 647 F. Supp. 2d at 243).
18. Id.; see also Consub Delaware v. Schahin Engenharia Limitada, 476 F. Supp. 2d 305, 309 (S.D.N.Y. 2007) ("As to the second prong, the 'substantial ground for a difference of opinion' must arise out of a genuine doubt as to whether the district court applied the correct legal standard in its order").
19. Ofori v. Central Parking System of New York, 2010 WL 335498 at *2 (E.D.N.Y. Jan. 22, 2010) (citing 28 U.S.C. §1292(b)).
20. McReynolds, 672 F.3d at 486.