January 22, 2015

Supreme Court Clarifies Timing of Appeals in MDL Cases

On January 21, 2015, the U.S. Supreme Court announced the definitive rule governing the timing of appeals from a multidistrict litigation proceeding (MDL). The Court held that plaintiffs in actions centralized in an MDL whose entire cases are dismissed have an immediate right of appeal, even if other cases in the MDL remain pending. Because the Court’s decision likely will affect pending cases as well as future ones, it is also possible that some now-pending MDL appeals will be deemed untimely under the Court’s decision.

In Gelboim, the petitioners were one of several groups of plaintiffs whose cases had been coordinated together in an MDL. When their case was dismissed in its entirety, the petitioners appealed even though many other cases in the MDL remained pending. The Court of Appeals for the Second Circuit dismissed this appeal for lack of jurisdiction, ruling that cases coordinated in an MDL may not be appealed while the MDL remains pending, unless the appellant first obtains a certification from the district court (under Federal Rule of Civil Procedure 54(b)) “that there is no just reason for delay” of the appeal. The Court of Appeals concluded that the district judge is in the best position to assess when the common issues in an MDL have been developed sufficiently such that an appeal would not be premature or inefficient. Rule 54(b) addresses situations where “an action presents more than one claim for relief” and permits district courts to certify for appeal “one or more, but fewer than all, claims” where “there is no just reason for delay.”

In a unanimous decision, the Supreme Court reversed the Second Circuit. The Court reasoned that “[c]ases consolidated for MDL pretrial proceedings ordinarily retain their separate identities, so an order disposing of one of the discrete cases in its entirety should qualify . . . as an appealable final decision.” The Court rejected the respondents’ position that the MDL proceeding constituted an “action” for purposes of Federal Rule 54(b) – rather, each of the cases coordinated in the MDL remained “actions” within the meaning of Rule 54(b), and upon dismissal could be immediately appealed.

Accordingly, the Gelboim decision makes clear that when a district court resolves all claims of one case within an MDL, the losing party in that constituent case must appeal at that time, or else lose the right to appeal. The losing party may not simply wait to file its appeal until the MDL concludes, as the appeal may by then have become untimely. Because the time limit to appeal is jurisdictional, the Supreme Court’s ruling in Gelboim may cause the Courts of Appeals to dismiss as untimely some appeals that had previously been thought timely.

The Supreme Court left open the question of when parties must appeal orders dismissing in their entirety cases that have been fully consolidated for all purposes with other cases under Federal Rule of Civil Procedure 42, rather than just consolidated for pretrial purposes as in an MDL. The standard applied in determining when an appeal must be taken in cases consolidated under Rule 42 differs from circuit to circuit, with some following a bright-line rule and others performing a more case-specific analysis. The Gelboim ruling did not decide which of those positions is correct.

The Gelboim ruling was purely a matter of procedure, and so the Court expressed no view on the merits of the underlying claims in the MDL or the merits of the individual case that had been dismissed. The effect of the ruling is to allow the appeal of that dismissed case to proceed, to be decided in the ordinary course by the Second Circuit Court of Appeals.

Goodwin Procter represented a group of seven retired federal judges as amici curiae before the Supreme Court in the Gelboim case.