- Supreme Court Holds Dismissal of Individual Case in MDL Proceedings Is Immediately Appealable
- February 13, 2015 | Authors: James R. McGibbon; Robert D. Owen; Phillip E. Stano; Steuart H. Thomsen; Lewis S. Wiener
- Law Firms: Sutherland Asbill & Brennan LLP - Atlanta Office ; Sutherland Asbill & Brennan LLP - New York Office ; Sutherland Asbill & Brennan LLP - Washington Office
The U.S. Supreme Court unanimously held today in Gelboim v. Bank of America Corp., No. 13-1174, that an order disposing of an individual case previously consolidated with other cases for multidistrict litigation (MDL) pretrial proceedings is a final appealable decision under 28 U.S.C. § 1291.
In Gelboim, Petitioners filed a putative class action complaint asserting a single antitrust claim against several banks in the U.S. District Court for the Southern District of New York. Their case was consolidated for pretrial proceedings with approximately 60 other cases found to raise common questions of fact, pursuant to the MDL procedure authorized under 28 U.S.C. § 1407. Respondents moved to dismiss the complaint with prejudice on the ground that Petitioners had suffered no antitrust injury. The District Court granted Respondents’ motion and dismissed Petitioners’ complaint in its entirety. Other cases that were part of the MDL pretrial proceedings, however, remained pending. When Petitioners appealed the District Court’s order to the U.S. Court of Appeals for the Second Circuit, the Second Circuit dismissed the appeal sua sponte on the ground that it lacked appellate jurisdiction because the District Court’s order did not dispose of all claims in the consolidated action and therefore was not an appealable “final decision” under 28 U.S.C. § 1291. Petitioners sought U.S. Supreme Court review of the Second Circuit’s dismissal, noting that the majority of circuits would have permitted Petitioners’ appeal.
Petitioners argued that the dismissal of their complaint was an immediately appealable “final decision” under § 1291 because it terminated their individual action. Respondents, on the other hand, analogized a consolidated MDL proceeding to a single action involving multiple claims and multiple parties and argued that there would be no final decision until the consolidation ended. Respondents also argued that Petitioners’ approach would result in seriatim appeals and would cause appellate courts to first hear appeals of weaker cases that were dismissed entirely while delaying appeals of stronger cases in which only some claims were dismissed.
Agreeing with Petitioners, the Supreme Court held that Petitioners’ case retained its separate identity even after MDL consolidation and that the District Court’s order dismissing Petitioners’ complaint terminated their action, thereby triggering the right to appeal under § 1291. The Court noted that § 1407 refers to individual “actions” transferrable to a single district court, not to a monolithic multidistrict “action” created by transfer; provides for transfer and possible consolidation of actions for pretrial proceedings; and further provides that an individual action is to be transferred back to the original district court in which it was filed at or before the conclusion of pretrial proceedings, unless it has been previously terminated, thus recognizing that transferred actions may be terminated while consolidated. The Court stated that Respondents’ concern that appeals of stronger cases involving multiple claims would be heard behind weaker cases involving only one claim could be addressed under Rule 54(b), which authorizes district courts to certify for interlocutory appeal rulings on discrete claims that are part of multiple-claim complaints. The Court appeared to limit its ruling to the MDL context, stating that it was not ruling on “whether an order deciding one of multiple cases combined in an all-purpose consolidation qualifies under § 1291 as a final decision appealable as of right.”