February 03, 2015
On January 21, the Supreme Court issued its unanimous decision in Gelboim v. Bank of America, 574 U.S. __ (2015), setting a bright-line rule of procedure in multidistrict litigations. In a decision authored by Justice Ginsburg, the Court held that when a district court dismisses the only claim in a case that has been consolidated with other actions for pretrial proceedings in multidistrict litigation (“MDL”), the district court’s order is a final order and the right to appeal has ripened, even though live claims may remain in the MDL’s other actions.
Gelboim came to the Supreme Court after the Second Circuit, sua sponte, declined to hear the petitioner’s appeal for want of a final order by the district court. The district court had granted respondent Bank of America’s motion to dismiss the federal antitrust claims raised by many plaintiffs in the MDL, the only claims alleged by petitioners (“Gelboim”). The MDL continued with other plaintiffs’ non-antitrust claims while Gelboim’s action was fully disposed of. Gelboim moved to amend her complaint, a motion that the district court denied, before bringing her appeal to the Second Circuit.
This case asked the Court to consider, and to reconcile, two potentially competing procedural provisions of federal civil practice:
- the right to appeal a final order granted in 28 U.S.C. § 1291;
- the ability of district courts to transfer actions into an MDL for coordinated or consolidated pretrial proceedings as provided in 28 U.S.C. § 1407.
In holding for Gelboim, the Court noted that the district court’s order “had the hallmarks of a final decision.”1 The Court looked to the language of §1291: circuit courts have the jurisdiction to hear appeals from “all final decisions of the district courts of the United States.” Case-law clarifies that a “final decision” is one that “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.”2 As a result of the MDL district court dismissal of the antitrust claims, Gelboim was no longer a participant in the consolidated proceedings, and her right to appeal had ripened:
The sensible solution to the appeal-clock trigger is evident: When the transferee court overseeing pretrial proceedings in multidistrict litigation grants a defendant’s dispositive motion on all issues in some transferred cases, those cases become immediately appealable while cases where other issues remain would not be appealable at that time.3
The Court noted that this does not render Rule 54(b) certifications obsolete. Rule 54(b) retains its utility in allowing for immediate appeal of certain claims in an action involving multiple claims, when the court determines there is “no just reason for delay.”4
The Gelboim decision creates a clear rule of procedure that will inform MDL practice, an increasingly common tool for large complex litigations. While it takes some procedural discretion out of the hands of the district court managing an MDL, it creates a flash of certainty in the often complicated procedures of complex litigations.