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January 03, 2018 Top Story

Ninth Circuit Splits from Others in Tolling Deadline for Class Action Appeals

An appeal filed after the Rule 23 deadline may be timely where the plaintiff “acts diligently”

By Anthony R. McClure

The Ninth Circuit Court of Appeals has held, in a case of first impression, that where a class-action plaintiff misses a deadline to file a petition for interlocutory appeal—and even where the plaintiff misses the same deadline to file a motion for reconsideration—the court may still allow the appeal to go forward.

Despite filing the appeals outside the 14-day deadline, the court deemed it timely under the doctrine of equitable tolling

Despite filing the appeals outside the 14-day deadline, the court deemed it timely under the doctrine of equitable tolling

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In Lambert v. Nutraceutical Corp., the Ninth Circuit held that the deadline under Rule 23(f) of the Federal Rules of Civil Procedure is subject to equitable tolling under these same circumstances—where the plaintiff "acted diligently" in pursuing his rights. In so holding, the Ninth Circuit split from other circuits, including the Third, Tenth, and Eleventh Circuits.

The plaintiff, a consumer, sued defendant corporation after purchasing a product called "Cobra Sexual Energy." Dissatisfied, the consumer brought a class-action lawsuit alleging violations of several state consumer protection laws. The U.S. District Court for the Central District of California initially granted class certification under Rule 23(b)(3). However, when the original judge retired and the case was reassigned, the defendant successfully moved to decertify the class.

Under Rule 23(f), which governs interlocutory appeals of "order[s] granting or denying class-action certification," the plaintiff had 14 days after the order decertifying the class to file a petition for permission to appeal. Ten days after the decertification order, during a status conference, the plaintiff's attorney told the district court he intended to move for reconsideration. The court instructed the plaintiff to file the motion within 10 days. This made the motion due 20 days after the decertification order—and outside Rule 23(f)'s 14-day period for requesting an interlocutory appeal. The plaintiff moved for reconsideration in line with the district court's schedule. Three months later, the court denied the plaintiff's motion. Within 14 days of that order, the plaintiff filed a Rule 23(f) petition.

The Ninth Circuit deemed the appeal timely under the doctrine of equitable tolling. The Ninth Circuit equitably tolled the time to appeal even though the plaintiff did not move for reconsideration within 14 days after the decertification order. Applying general equitable factors, the court held that the plaintiff was entitled to equitable tolling because the plaintiff's counsel orally notified the district court of his intent to seek reconsideration within 10 days, the district court set a deadline for that motion outside the Rule 23(f) deadline, and the plaintiff otherwise "acted diligently."

The court acknowledged a circuit split on this issue, but found unpersuasive the other circuits' reasons for limiting equitable tolling to cases in which the appellant moved for reconsideration within 14 days. The court then turned to the merits of the plaintiff's appeal and reversed, finding that the district court abused its discretion in decertifying the class.

The case "deals with a distinction between filing a notice of appeal vs. a request for reconsideration," says Louis F. Burke, New York, cochair of the ABA Section of Litigation's Class Action & Derivative Suits Committee. "Although the plaintiff's motion for reconsideration was filed 20 days after the decision, the plaintiff provided notice of the intent to file that motion within 14 days, and "that was ok within the court's rule," he adds.

"The Ninth Circuit here explicitly parted ways with some other courts that had said you can toll [the deadline] if there's a motion for reconsideration filed, but only if it's filed within the 14 days that Rule 23 usually gives you to appeal," says Anna-Rose Mathieson, San Francisco, co-Editor-in-Chief of the ABA's Appellate Practice Journal. The Ninth Circuit determined that "we should look at what is essentially fair in this case, and this litigant did everything he was supposed to do in the district court," she adds. No matter what the outcome, says Mathieson, "I think the take away is always, when in doubt, file a notice of appeal."

 

Anthony R. McClure is an associate editor for Litigation News.


Hashtags: #classaction, #tolling

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