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Robert J. MATZ, individually and on behalf of all others similarly situated, Petitioner/Cross-Respondent, v. HOUSEHOLD INTERNATIONAL TAX REDUCTION INVESTMENT PLAN, Respondent/Cross-Petitioner

United States Court of Appeals for the Seventh Circuit2012-07-19No. No. 12-8010
687 F.3d 824

Summary

Holding. An order that materially alters a previous certification decision is within the scope of Rule 23(f) and thus appealable by interlocutory review, even if it does not completely reverse the grant-or-deny status of the original order. The plaintiff's petition for leave to appeal was denied because the challenge did not satisfy the criteria for a Rule 23(f) appeal.

A plaintiff in an ERISA class action sought permission to appeal a district court order that partially decertified the class by removing approximately 3,000 to 3,500 members, representing 57 to 71 percent of the class. The defendant cross-petitioned to appeal for complete decertification, but that petition was dismissed as untimely. The threshold question was whether Rule 23(f), which permits appeals from orders granting or denying class certification, extends to orders that modify the scope of a previously certified class.

The court concluded that Rule 23(f) does encompass orders that materially alter prior class certification decisions, even if they do not completely reverse the certification or decertification status. The court reasoned that permitting such appeals serves the same practical purpose as allowing appeals from initial certification orders of different scope. However, although the court found it had jurisdiction to hear the plaintiff's petition, the petition failed to satisfy the substantive criteria necessary for a Rule 23(f) appeal and was therefore denied.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether Rule 23(f) permits interlocutory appeals from orders modifying, rather than granting or denying, class certification
  • The scope of 'appeal-worthy certification issues' under Rule 23(f)
  • Whether a material alteration of class scope triggers appellate jurisdiction

Procedural posture

The plaintiff petitioned for leave to appeal under Federal Rule of Civil Procedure 23(f) from a district court order partially decertifying a previously certified ERISA class action.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

POSNER, Circuit Judge.

The plaintiff in this long-running class action suit under ERISA asks us for leave to appeal under Fed.R.Civ.P. 23(f) from an order by the district court partially decertifying the class by eliminating some 3000 to 3500 members — a reduction of between 57 and 71 percent of the membership (we are not given data that would permit a more precise estimation). The defendant has cross-petitioned for leave to appeal; it wants to argue that the entire class should have been decertified; but its appeal is untimely and is therefore dismissed.

The defendant questions our authority to entertain the plaintiffs petition. Rule 23(f) authorizes a court of appeals to “permit an appeal from an order granting or denying class-action certification.” The rule doesn’t mention modifications of the scope of a previously certified class. The committee note to the 1998 amendment that added subsection (f) to Rule 23, after stating that “appeal from an order granting or denying class certification is permitted in the sole discretion of the court of appeals,” adds that “no other type of Rule 23 order is covered by this provision” — but then fogs the issue by stating that the rule confers on the court of appeals “a discretionary power to grant interlocutory review in cases that show appeal-worthy certification issues.”

We cannot find a case that discusses whether the modification of an order certifying a class is appealable under the rule. But our decision in Gary v. Sheahan, 188 F.3d 891, 893 (7th Cir.1999) (citations omitted), hints at an affirmative answer. We said that “if in response to a belated motion for reconsideration [of an order certifying or refusing to certify a class] the judge materially alters the decision, then the party aggrieved by the alteration may appeal within the normal time. Thus, had the district judge granted defendant’s motion and decertified the class, plaintiffs would have had ten [now 14] days under Rule 23(f) to seek permission to appeal. Instead, however, the judge denied the motion and left the class definition in place.” But the order sought to be appealed from in that case denied decertification rather than, as in this case, granting it in part.

Citing Gary and amplifying its hint, the Tenth Circuit in Carpenter v. Boeing Co., 456 F.3d 1183, 1191 (10th Cir.2006), said that “an order that leaves class-action status unchanged from what was determined by a prior order is not an order ‘granting or denying class action certification.’ Of course, when the district court accepts a suggestion and the certification decision is changed, the new order, to the extent it modifies the prior order, is indeed such an order and an interlocutory appeal under Rule 23(f) is permitted ” (emphasis added). Finally, several opinions imply that an order granting reconsideration of, or allowing an amendment to, an order granting or denying certification is appealable under Rule 23(f) if it changes the “status quo.” See Fleischman v. Albany Medical Center, 639 F.3d 28, 31-32 (2d Cir.2011) (per curiam), and cases cited there. But it is unclear whether the courts in those cases would consider a change short of reversing the previous order a change in the status quo.

We think, borrowing the language of the Gary case, that an order materially altering a previous order granting or denying class certification is within the scope of Rule 23(f) even if it doesn’t alter the previous order to the extent of changing a grant into a denial or a denial into a grant. This is best seen by imagining that rather than altering a class that the court had already certified the district judge had at the outset certified a narrower class than proposed by the plaintiff. That order would have been appealable by either party, or so at least the cases assume, see Kartman v. State Farm Mutual Automobile Ins. Co., 634 F.3d 883, 888 (7th Cir.2011); Jefferson v. Ingersoll Int’l Inc., 195 F.3d 894, 896-97 (7th Cir.1999); Hohider v. United Parcel Service, Inc., 574 F.3d 169, 174-75 (3d Cir.2009); Lozano v. AT & T Wireless Services, Inc., 504 F.3d 718, 721 (9th Cir. 2007); Gunnells v. Healthplan Services, Inc., 348 F.3d 417, 423 (4th Cir.2003); Parker v. Time Warner Entertainment Co., L.P., 331 F.3d 13, 17-18 (2d Cir.2003), albeit without discussion of the issue — yet the assumption seems obviously correct. We don’t see why it should make a difference that the order modifying the class requested by the plaintiff came later. The difference is between one order and two orders that accomplish the same thing.

Although we thus have jurisdiction over the plaintiffs petition for leave to appeal, his challenge to the judge’s ruling altering the class — the challenge that he asks us to address by allowing the appeal — does not satisfy the criteria for a Rule 23(f) appeal. The petition is therefore

Denied.