On January 21, 2015, the United States Supreme Court reversed and remanded a Second Circuit ruling that denied plaintiffs the right to immediately appeal the district court’s dismissal of their class action, which was included in the In re Libor-Based Financial Instruments Anti-Trust Litigation multidistrict litigation (LIBOR MDL). Gelboim v. Bank of America Corp., Case. No. 13-1174, 574 U.S. ___ (2015). Authoring a unanimous Court opinion, Justice Ginsburg reasoned that the dismissal of a sole claim effects a release from the MDL proceedings and enables the dismissed plaintiffs the right to an immediate appeal under 28 U.S.C. §1291. Slip Op. at *6–10.
Plaintiffs Gelboim and Zacher had filed a class action complaint (the “Gelboim-Zacher action”) against several banks alleging an antitrust claim under §1 of the Sherman Act, 15 U.S.C. §1. The Gelboim-Zacher action was one of 60 complaints lodged against the banks alleging that they had manipulated the London Interchange Bank Official Rate (LIBOR) through the systematic understatement of borrowing costs. Whereas other actions alleged numerous causes of action, the Gelboim-Zacher action was distinct in that it alleged a single antitrust claim. Under 20 U.S.C. §1407, the Joint Panel of Multidistrict Litigation (JPML) transferred all the actions to the United States District Court for the Southern District of New York for coordination and consolidation. In re Libor-Based Financial Instruments Anti-Trust Litigation, 802 F. Supp. 2d 1380.
In June 2012, the district court granted the banks’ motion to dismiss all of the plaintiffs’ antitrust claims on the basis that no plaintiff could state an antitrust injury. The ruling had the effect of disposing of the single antitrust claim in the Gelboim-Zacher action. The district court recognized the Gelboim-Zacher plaintiffs’ immediate right to appeal under 28 U.S.C §1291 and granted certification under Fed. R. Civ. P. 54(b) to effect the right to appeal the decision. On its own initiative, the Second Circuit dismissed the Gelboim-Zacher appeal, reasoning that other claims in the LIBOR MDL had not been adjudicated. In response to Second Circuit’s dismissal of the appeal, the district court withdrew its Rule 54(b) certification.
In her opinion for the Court, Justice Ruth Bader Ginsburg ruled that the dispositive effect of the order granting the banks’ motion to dismiss triggered the Gelboim-Zacher plaintiffs’ right to immediately appeal under §1291. Slip Op. at *6. Regardless of whether other claims in other actions in the MDL were still being litigated, the Gelboim-Zacher action’s participation in the MDL had ceased as a result of the dismissal of their sole cause of action. Slip Op. at *7–8. Justice Ginsburg emphasized that the purpose of coordination and consolidation under 28 U.S.C. § 1407 was to create judicial and litigation efficiencies but not to needlessly handcuff all the coordinated and consolidated individual actions to the extent where said efficiencies are eradicated. Id at *8.
While inapplicable to the Gelboim-Zacher plaintiffs, who only pled a single claim, Justice Ginsburg noted, in dicta,that plaintiffs in an MDL who have certain claims dismissed but other claims pending maintain their right to appeal the dismissals under Rule 54(b). Slip Op. at *9. Rule 54(b) allows parties to appeal dispositive rulings on the causes of actions affected by such rulings while other non-affected causes of actions in the same complaint can continue to be actively litigated. Fed. R. Civ. P. 54(b). Justice Ginsburg also addressed that such plaintiffs may be able to utilize an interlocutory appeal via 28 U.S.C. §1292(b), which may be accepted or rejected at the discretion of the appellate court. Slip. Op. at *10.
While it is rare for a complex class action complaint to state a single cause of action, this opinion serves as a practical reminder that a §1291 right of appeal does exist in such a scenario to compliment the more ubiquitous Rule 54(b) avenue of appeals commonly observed in federal class action litigation.