Getting an appeals court to focus on class decisions- certification, refusal to certify, and decertification - can be crucial to litigants on both sides of proposed class actions. The Third Circuit recently addressed one tactic in this field, finding that putative class members cannot appeal a district court’s class decertification order after having voluntarily dropped their individual claims in the same court. The court thus dismissed two appeals brought by employees making wage and hour claims against the University of Pittsburgh Medical Center and West Penn Allegheny Health System. See Karen Camesi et al. v. University of Pittsburgh Medical Center et al., No. 12-1446, and Andrew Kuznyetsov et al. v. West Penn Allegheny Health System Inc. et al., No. 12-1903 (3rd Cir. Sept. 4, 2013).
The complaints similarly alleged that proposed class members were not compensated for work performed during meal breaks in violation of the FLSA. The district court eventually decertifed the collective action. The named plaintiffs did not ask the District Court to certify its interlocutory order for appeal, but, instead, moved under Federal Rule of Civil Procedure 41(a) for “voluntary dismissal of their claims with prejudice in order to secure a final judgment for purposes of appeal.” The district court granted the unopposed motion on January 30, 2012, stating that “Plaintiffs’ remaining claim are hereby dismissed with prejudice in order to allow Plaintiffs to seek appellate review.”
The court of appeals began by considering whether appellants’ voluntary dismissal of their claims with prejudice under Rule 41(a) left them with a final order appealable under 28 U.S.C. § 1291. This question of first impression required the panel to consider the scope of two strands of Third Circuit authority: Sullivan v. Pacific Indemnity Co., 566 F.2d 444 (3d Cir. 1977), in which the court held that a plaintiff may not obtain appellate review after incurring a dismissal for failure to prosecute for the purpose of seeking to appeal an interlocutory class-certification order, and Fassett v. Delta Kappa Epsilon, 807 F.2d 1150 (3d Cir. 1986), in which the court ostensibly permitted plaintiffs to voluntarily dismiss a portion of their case in order to appeal an order of the district court terminating the remainder of their case. In considering the significance of these cases, the court seemed impacted most by the fact that appellants here sought review of only the orders decertifying their collective actions, and did not complain of the “final” orders that dismissed their cases.
Generally, a dismissal with prejudice constitutes an appealable final order under § 1291. See, e.g., In re Merck & Co. Sec., Derivative & ERISA Litig., 493 F.3d 393, 399 (3d Cir. 2007). Furthermore, “[u]nder the ‘merger rule,’ prior interlocutory orders [such as class-certification decisions] merge with the final judgment in a case, and the interlocutory orders (to the extent that they affect the final judgment) may be reviewed on appeal from the final order.” In re Westinghouse Sec. Litig., 90 F.3d 696, 706 (3d Cir. 1996).
But here defendants argued that appellants’ voluntary dismissals of their claims constituted impermissible attempts to manufacture finality, and the Third Circuit agreed. In Sullivan, the court had noted that a class certification decision, per se, is not an appealable final order under 28 U.S.C. § 1291, but rather is an interlocutory order. Dismissal for failure to prosecute, as an attempt to avoid the court's firm position against interlocutory appeals of class certification determinations, was an impermissible strategy there, because if a litigant could refuse to proceed whenever a trial judge ruled against him, simply wait for the court to enter a dismissal for failure to prosecute, and then obtain review of the judge’s interlocutory decision, the policy against piecemeal litigation and review would be severely weakened. Allowing such a practice would risk inundating appellate dockets with requests for review of interlocutory orders and undermine the ability of trial judges to achieve the orderly and expeditious disposition of cases.
Appellants here had attempted to short-circuit the procedure for appealing an interlocutory district court order that is separate from, and unrelated to, the merits of their case. Appellants could have obtained appellate review of the decertification order by proceeding to final judgment on the merits of their individual claims. Or, appellants could have asked the District Courts to certify their interlocutory orders for appeal. But appellants instead sought to convert an interlocutory order into a final appealable order by obtaining dismissal under Rule 41. If the courts were to allow such a "procedural sleight-of-hand" to bring about finality here, said the court of appeals, there was nothing to prevent litigants from employing such a tactic to obtain review of discovery orders, evidentiary rulings, or any of the myriad decisions a district court makes before it reaches the merits of an action. This would greatly undermine the policy against piecemeal litigation embodied by § 1291, concluded the panel.
Both appeals dismissed for failure of jurisdiction.