Friday, April 10, 2015

SCOTUS Clarifies When a District Court Order is Final and Appealable in Consolidated, Multidistrict Litigation

By Charles E. Harper 
Partner, Quarles & Brady LLP

In Gelboim v. Bank of America Corp., 573 U.S. ---, 135 S. Ct. 897 (2015), the United States Supreme Court held that a district court order dismissing the sole claim in a single-claim action is a final and appealable order, even when that claim is consolidated with other actions in multidistrict litigation.

The petitioners—Ellen Gelboim and Linda Zacher—filed a class action suit in the United States District Court for the Southern District of New York that was consolidated for pretrial proceedings with 60 other cases. The other cases were proceeding in various jurisdictions that included California, Iowa, Illinois, Texas, and Virginia, among others. The Judicial Panel on Multidistrict Litigation (JPML) consolidated these cases because they all involved allegations that the defendant-banks understated their borrowing costs, which depressed the London InterBank Offered Rate (LIBOR), a benchmark interest rate disseminated by the British Bankers Association. Understating their borrowing costs allegedly enabled the banks to pay lower interest rates. The petitioners raised a single claim that the banks, acting in concert, had violated federal antitrust law. However, once the district court determined that no plaintiff could assert a cognizable antitrust injury, it dismissed the Gelboim-Zacher case in its entirety. 

Gelboim and Zacher appealed the district court’s order. The district court assumed that the petitioners were entitled to an immediate appeal under 28 U.S.C. § 1291 and granted other plaintiffs Rule 54(b) certifications authorizing them to appeal the dismissal of their antitrust claims—even when the other plaintiffs still had separate claims pending in the district court. The United States Court of Appeals for the Second Circuit dismissed the petitioners’ appeal for lack of jurisdiction, however, because the order appealed from did not dispose of all claims from all cases in the consolidated action. 

The Supreme Court, in a unanimous decision, reversed and held that the order dismissing Gelboim and Zacher’s case removed them from the consolidated proceedings, thereby triggering their right to appeal under 28 U.S.C. § 1291. Justice Ginsburg, writing for the Court, reasoned that the petitioners’ right to appeal ripened when the district court dismissed their case, not upon the eventual completion of multidistrict proceedings in all of the consolidated cases. 

The Court emphasized the language and purpose of 28 U.S.C. § 1291 and Federal Rule of Civil Procedure 54(b). Section 1291 gives the courts of appeals jurisdiction over appeals from “all final decisions of the district courts.” Therefore, the statute’s core application is to rulings that terminate an action, such as the ruling against Gelboim and Zacher. Rule 54(b), though, permits district courts to authorize immediate appeal of dispositive rulings on separate claims in a civil action raising multiple claims. This rule, Justice Ginsburg explained, “relaxes the former general practice that, in multiple claim actions, all the claims had to be finally decided before an appeal could be entertained from a final decision upon any of them.” Thus, Rule 54(b) aimed to expand, not diminish, appeal opportunity. 

The specific question before the Court, then, was whether the right to appeal secured by § 1291 is affected when a case is consolidated for pretrial proceedings in multidistrict litigation. To this, the Court soundly answered no—consolidation offers convenience for the parties and promotes judicial efficiency, but it does not meld the petitioners’ action and others into a single unit. The major practical effect of taking the banks’ position—that plaintiffs whose actions have been dismissed must await the termination of all pretrial proceedings in each consolidated case before appealing—would be uncertainty as to which event triggers the plaintiffs’ 30-day appeal clock. Therefore, the “sensible solution to the appeals-clock trigger” was, according to the Court, “evident.”  That is, when a transferee court overseeing pretrial proceedings in a multidistrict litigation grants a defendant’s dispositive motion on all issues in some transferred cases, those cases become immediately appealable. However, cases in the multidistrict litigation that have unresolved issues would not be appealable at that time.

(The author would like to thank his colleague, Thomas McDonell, for his assistance in preparing this post.)

Recommended Citation: Charles E. Harper, SCOTUS Clarifies When a District Court Order is Final and Appealable in Consolidated, Multidistrict Litigation, The Brief, (April 10, 2015),

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