Wednesday, March 25, 2020

Walker v. Life Ins. Co. (9th Cir. - March 23, 2020)

Judge Tallman says at the end of this 25-page opinion:

"Plaintiffs . . . gambled their ability to appeal on the possibility that the district court would materially change its original certification decision on reconsideration. The subsequent reconsideration order maintained the status quo, and so it is not appealable. Plaintiffs lost their bet. Rule 23(f) cannot hedge it."

I appreciate that sentiment.  And agree with it in a plethora of cases.  When people make strategic decisions, that's their call.  They live or die with the resulting consequences.  No whining when the bet doesn't work out.

But, in truth, and with respect, I don't think that's what actually happened here.

The plaintiffs filed a motion to certify their class action, and proposed two different versions of the class definition; one broad, one narrow.  The district court certified the class with the narrower class definition.

So a win.  But only a partial win.

Now, normally, both sides then have 14 days to seek to appeal pursuant to Rule 23(f).  Though that deadline can be extended by a timely (i.e., within-the-14-days) motion for reconsideration.

Defendants went ahead and just filed their request to appeal (on the 14th day).  Plaintiffs, by contrast, filed a motion for reconsideration (again, on the 14th day).  All this is on August 14.

So far, so good.  Both sides did what they were required to do in order to seek relief from the Ninth Circuit.

But when plaintiffs filed their motion, they neglected to meet and confer in advance, which the local district court rules required.  So on September 10, the district court denied their motion, without prejudice, on this basis.

So the plaintiffs did what you might fully expect them to do:  they promptly met and conferred with the other side and then immediately (on September 18) refiled the same motion.  Which ultimately was denied (on October 22), and then plaintiffs promptly (14 days later) asked permission to appeal after that denial.  After all, plaintiffs timely filed a motion for reconsideration, which tolled the deadline, and now, once it's denied, they ask permission to appeal.  Right?

Technically, no.  That's wrong.  As Judge Tallman and the rest of the panel rightly conclude.

Yes, you filed a motion for reconsideration.  But that one -- the one filed within the 14 days (on August 14) -- was denied.  Denied on September 10.  So you had 14 days from then to file your request for permission to appeal.

Yes, I know, the district court denied it without prejudice, for a procedural technicality.  But that's still a denial.  The fact that it's without prejudice doesn't matter, if only because the district court doesn't get to extend statutory deadlines in the Court of Appeals.  So you've got to file 14 days from then.  Even though, yes, I can well see why you might think that makes very little sense.  Why require a party to immediately file their request for an appeal when (1) a motion for reconsideration tolls the deadline, and (2) the district court might still elect to grant the motion and hence moot the appeal?

I know.  But, as the Ninth Circuit holds, that's nonetheless the way the rules technically work.  You have to file your appeal early.  Even before your "second" motion for reconsideration (which is just the refiling of your first, this time after a meet and confer) is heard.  Perhaps silly, but that's what the hypertechnical rules require.

Since the plaintiff didn't do it that way, their appeal gets dismissed.  They had 14 days from the first (procedural) denial on September 10 to ask to appeal, but since they only filed 14 days after the second (substantive) denial on October 22, the request -- and hence the appeal -- is untimely.  Tough luck.

Judge Tallman says that the above facts demonstrate that "Plaintiffs . . . gambled their ability to appeal on the possibility that the district court would materially change its original certification decision on reconsideration."  And I see why he might think that.  Yes, if the district court had decided (on the second, renewed, motion for reconsideration) to change its certification order, then the 14 days would indeed run from that event.  So it was at least possible that a plaintiff could make such a timeliness gamble.  (Though, in truth, that'd make little sense, since if the district court changed its order, that's what plaintiffs wanted, so it would moot their appeal.  It would make little sense to "gamble" the timing of your appellate rights on the hopes that you'd get an order that would moot your appeal entirely if it were granted.)

But I feel very confident that that's not what, in fact, went down here.  Plaintiffs and their counsel almost certainly did not think "Yeah, we could appeal now, but you know what; I'm going to bet that we'll win our reconsideration order, and after that, then we'll file our appeal."  For one thing, it's unlikely they thought their reconsideration motion had a huge chance of success (since such motions almost invariably get denied); for another, such a strategy for a mooted appeal would make no sense, and finally, because there'd be little reason to make such a gamble when you could file permission to appeal in the first place -- delay doesn't really get you anything.

No, what I'm instead fairly confident actually transpired was just that plaintiffs and their counsel thought that what they were doing was the way the rules worked.  They weren't making a bet on their motion for reconsideration succeeding.  They just thought "Hey, the district court denied our motion without prejudice, for a procedural mistake, so we'll just correct that tiny little error forthwith and then appeal once it gets denied.  That's the way the rules work."

Now, look:  They were wrong.  That's not, in fact, the way the rules work.  And just like you're typically stuck (as Judge Tallman notes) with your bad bets, so too are you typically stuck with your bad reading of a statute.  At least as one as hypertechnical and strict as the one here.

So I don't disagree with the outcome.  I just think that it's more accurate (and -- perhaps -- less pejorative) to say that the plaintiffs are stuck with their "decision" not to appeal after the first denial.  It wasn't a bet.  It was, much more likely, simply a mistake.  Not a strategic mistake.  Just a regular old mistake.  (And I get that perhaps many lawyers would think it more pejorative to hoist them on the consequences of a mistake than on a strategic election.)

Reading and interpreting the rules is tough.  Even for fancy lawyers in big-ticket cases.

Sometimes people make bad choices.  Strategic or otherwise.  This is one of those events.

(Shed no tears for the plaintiffs and their counsel, however.  Remember that they still got part of their class certified.  And with respect to that issue, the Ninth Circuit affirms, so that's a win.  Plaintiffs just get their cross-appeal dismissed, so the class stays limited.)