In Costello v. Beavex, Inc., Nos. 15-1109 & 15-1110 (7th Cir. Jan. 19, 2016), the Seventh Circuit held that the one-way intervention rule does not bar a district court from revisiting a decision on class certification after it grants partial summary judgment for the plaintiffs. After the district court ruled on the plaintiffs' contemporaneous motions for partial summary judgment and class certification, Beavex appealed its grant of partial summary judgment for the plaintiffs, and the plaintiffs cross-appealed the district court's denial of class certification. Beavex cited the one-way intervention rule in response to the plaintiffs' cross-appeal. The rule, which requires trial courts to decide class action issues before addressing the substantive merits of a case, aims to prevent the "strikingly unfair" scenario in which plaintiffs cherry-pick favorable decisions by deciding to join a class only after acquiring an advantageous ruling on the merits. Beavex argued the rule barred the court from revisiting its denial of class certification because the plaintiffs had already obtained a favorable ruling on their motion for partial summary judgment.
In an opaquely-reasoned opinion, the Seventh Circuit concluded that the one-way intervention rule did not apply, citing the fact that "the district court properly ruled on class certification before granting partial summary judgment in Plaintiffs' favor." Strangely, the Seventh Circuit then vacated the district court's order denying class certification on the ground that it had incorrectly interpreted the predominance requirement of Rule 23(b)(3), and remanded the case for reconsideration of the certification issue—despite the fact that the district court had already issued a ruling on the merits. As Beavex argued in its petition for rehearing and rehearing en banc, Costello creates an unfair playing field for defendants involved in class action litigation, who may now be confronted with plaintiffs whose decisions whether to opt out of a class are framed by prior rulings on the merits.