Some Thoughts on Microsoft v. Baker

By Professor Adam Zimmerman

The big story in Microsoft v. Baker -- the Supreme Court's latest decision involving class actions -- is the question it did not reach today: Do lead plaintiffs have standing to continue pursuing a class action after their individual claims go away?

By way of background, there were two issues in Microsoft v. Baker. The one most people are familiar with is a highly technical question. Whether the plaintiff's strategy in the case--which was to voluntarily dismiss the case with prejudice in order to appeal the denial of class certification--is an impermissible end-run around Rule 23(f)? Rule 23(f) was created nearly two decades ago to permit appellate courts to review whether or not a district court properly certified a class action. Because the decision to certify a class action -- or not -- was so momentous, before Rule 23(f), a grant often would result in a quick settlement, while a denial would often spell the "death knell" of the case. The class action rules were amended in 1998 to give the appellate courts power to hear class action cases in their discretion, even though the appellate courts usually won't hear a case until after the lower court issues a final judgment. Microsoft involved what the Court felt was an improper workaround that process. Rather than rely on 23(f), plaintiffs could voluntary dismiss their claims, receive a final judgment and then appeal the denial of class certification.

A unanimous court today ruled that plaintiffs cannot do that. Doing so, said Justice Ginsburg writing for a majority of the Court, undermined the "careful deliberation" that went into drafting Rule 23(f). Slip Op. at 6. The Court even cited an amicus brief joined by a law professor who served on the Advisory Committee on Rules of Civil Procedure for the Judicial Conference of the United States during the period when Federal Rule of Civil Procedure 23(f) was considered and adopted:

By “[r]emoving the power of the district court to defeat any opportunity to appeal,” the drafters of Rule 23(f ) sought to provide “significantly greater protection against improvident certification decisions than §1292(b)” alone offered. Judicial Conference of the United States, Advisory Committee on Civil Rules, Minutes of November 9–10, 1995. But the drafters declined to go further and provide for appeal as a matter of right. “[A] right to appeal would lead to abuse” on the part of plaintiffs and defendants alike, the drafters apprehended, “increas[ing] delay and expense” over “routine class certification decisions” unworthy of immediate appeal. Ibid. (internal quotation marks omitted). See also Brief for Civil Procedure Scholars as Amici Curiae 6–7, 11–14 (“Rule 23(f ) was crafted to balance the benefits of immediate review against the costs of interlocutory appeals.” (capitalization omitted)).

Slip Op. at 7.

But there was a second issue in Microsoft that may return very soon. The second issue is whether the class representatives remained justiciable under Article III. In the second half of it's brief, Microsoft argued that class representatives lack power to assert claims on behalf of the class after their own are voluntarily dismissed. This position departs from the Court's approach to class actions and justiciability. Long ago, in two cases decided on the same day, Roper and Geraghty, the Supreme Court said that class representatives still retain "a ‘personal stake’ in obtaining class certification sufficient to assure that Art. III values are not undermined” even after their own claims expire. U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 404 (1980); Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326 (1980). The Court reasoned that if defendants could avoid class actions by mooting a class representative's claim, the practice could undermine the whole purpose of the class action--"a convenient and economical means for disposing of similar lawsuits, and the facilitation of the spreading of litigation costs among numerous litigants with similar claims." Geraghty, 445 U.S. at 402-03 (1980). However, a recent, non-class action case, Genesis Healthcare Corp. v. Symczyk, the Court questioned in a footnote the viability of Roper. 133 S. Ct. 1523, 1532 n.5 (2013). Defendants have relied on that language to argue that plaintiffs lack Article III standing in other cases, most notably Campbell-Ewald and Spokeo.*

The majority opinion did not address this argument at all. But Thomas' concurring opinion, along with Chief Justice Roberts and Justice Alito would have found the lead plaintiff was not justiciable under Article III. Citing an opinion some believe cut back on Roper and Geraghty, Justice Thomas said: “Article III denies federal courts the power to decide questions that cannot affect the rights of litigants in the case before them, and confines them to resolving real and substantial controversies admitting of specific relief through a decree of a conclusive character.”

Although Kennedy did not join the opinion concurring-in-judgment, it's important to remember that the case was argued without Gorsuch and took almost a full term after briefing to hear the case. Thus, a reason the court put off hearing the case could have been that there were enough votes to lead the court to split 4-4 on this question. Accordingly, with a nine-member court and a conservative majority, it's entirely possible that, should the Court could reach this question again, it may adopt Thomas' position that class representatives lack Article III standing to pursue class claims after their own cases become moot or are dismissed.

The reason why all of this matters is because if the Supreme Court reaches the Article III question, and adopts the position staked out by Thomas, Alito and Roberts, it could reverse nearly thirty years of precedent and undermine many other kinds of meritorious class action lawsuits, like cases seeking declaratory or injunctive relief. Roper was a consumer class action case. But Geraghty was a habeas class action brought on behalf of prisoners, who just like many other injunctive relief plaintiffs, rely on class actions to ensure their claims aren't mooted when the government or a private party resolves a claim that impacts a lot of people. For example, were the Court to hold that a government entity could moot a class action by offering the class representative money or releasing him or her from prison, it could someday mean that Custom and Border Protection (CBP) could similarly avoid liability by releasing anyone before a plaintiff could enjoin their practice of detaining or deporting legal permanent residents, visa holders or refugees. Class actions also are a way to ensure that the government and private organizations consistently respond to claims for relief. Unlike the controversy over "nationwide injunctions," most recently in the travel ban litigation, courts can order broad, even nationwide relief for an injunction in a class action.

It's important to note that this is speculative. I could be wrong about the vote count. And the Supreme Court may not reach this issue at all. Finally, if it reaches the Article III question again, it could limit its holding to voluntary dismissals or damage class actions, without upsetting injunctive relief class actions. But were the Court to narrow or reverse it's approach to Article III standing in class action cases, it's impact could extend far beyond the narrow procedural question decided today.