United States: Game Over: Supreme Court Delivers Win For Class Action Defendants In Microsoft

In Short

The Decision: The United States Supreme Court held that class action plaintiffs cannot obtain an immediate appeal as of right from the denial of class certification by voluntarily dismissing their individual claims.

The Reasoning: The "dismissal device" undermines the final-judgment rule, undermines the discretion given to the courts of appeals by Rule 23(f), and violates principles of fairness because it is available only to class action plaintiffs.

The Implications: Class action plaintiffs cannot use this "dismissal device" to obtain early review "as of right" of the denial of class certification. Given the Court's recognition of the heavy burdens class certification can impose on defendants, the decision may also help class action defendants obtain discretionary appellate review under Rule 23(f). The Court's decision provides courts with a reminder to treat class action defendants evenhandedly.

In a victory for class action defendants, the United States Supreme Court's decision in Microsoft Corp. v. Baker puts an end to plaintiffs' manufactured appeals as of right from denials of class certification. The Court's holding reaffirms that class certification decisions are interlocutory and subject to immediate appeal only within the discretion of the courts of appeals under Rule 23(f). In addition to narrowing when plaintiffs can appeal, the Court emphasized that class action rules must be evenhanded; class certification is "just as important to defendants" as it is to plaintiffs.

The Background

In 2011, a group of console owners sued Microsoft Corporation in a putative nationwide class action, claiming the popular Xbox 360 console was defectively designed because, plaintiffs alleged, it scratched game discs during normal operations. Microsoft Corp. v. Baker, ___ U.S. ___, No. 15-457, slip op. at 8 (June 12, 2017). The District Court struck the class allegations, an act that is "functional[ly] equivalent to an order denying class certification." The court determined that nothing undermined a previous court's denial of class certification in a similar case in 2009. Id. at 8-9 & n.7 (citing In re Microsoft Xbox 360 Scratched Disc Litig., 2009 WL 10219350, at *6-7 (W.D. Wash. Oct. 5, 2009)).

Although the order striking class allegations was not immediately appealable as of right under 28 U.S.C. § 1291 (because it was not a final judgment), Federal Rule of Civil Procedure 23(f) grants an immediate appeal of the grant or denial of class certification. That appeal, however, lies solely within the discretion of the court of appeals. The Microsoft plaintiffs petitioned the Ninth Circuit for discretionary review of the order striking the class allegations under Rule 23(f). Microsoft, ___ U.S. ___, slip op. at 9. The Ninth Circuit denied that petition. Id.

The plaintiffs chose not to proceed with their individual claims on the merits and litigate to final judgment. Instead, in an effort to obtain immediate review by the Ninth Circuit, the plaintiffs stipulated to a voluntarily dismissal of their individual claims. The plaintiffs then appealed to the Ninth Circuit, arguing that voluntary dismissal created a final judgment from which they could appeal as of right the order striking class allegations. Microsoft, ___ U.S. ___, slip op. at 10. The Ninth Circuit rejected Microsoft's argument that the plaintiffs had "no right to appeal" and were "impermissibly circumvent[ing] Rule 23(f)" and held that the plaintiffs' voluntary dismissal made the case appealable under § 1291 as a final judgment. Id. at 10-11. The Ninth Circuit also reversed the District Court's order striking the plaintiffs' class allegations. Id. at 11. Microsoft then petitioned the U.S. Supreme Court for certiorari. Id.

The Issue

In Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978), the U.S. Supreme Court rejected the "death knell" doctrine, which allowed a plaintiff who was denied class certification to appeal immediately if the denial "would end [the] lawsuit for all practical purposes." Microsoft, ___ U.S. ___, slip op. at 2. The U.S. Supreme Court agreed to hear the Microsoft case to "resolve a Circuit conflict" as to whether "federal courts of appeals have jurisdiction under § 1291 and Article III of the Constitution to review an order denying class certification (or, as here, an order striking class allegations) after the named plaintiffs have voluntarily dismissed their claims with prejudice[.]" Microsoft, ___ U.S. ___, slip op. at 11.

The Outcome

The U.S. Supreme Court reversed the Ninth Circuit. Justice Ginsburg wrote the majority opinion, which Justices Kennedy, Breyer, Sotomayor, and Kagan joined. Justice Thomas wrote a concurring opinion, which the Chief Justice and Justice Alito joined. Justice Gorsuch did not participate. The majority held that "Plaintiffs in putative class actions cannot transform a tentative interlocutory order into a final judgment within the meaning of § 1291 simply by dismissing their claims with prejudice—subject, no less, to the right to 'revive' those claims if the denial of class certification is reversed on appeal." Microsoft, ___ U.S. ___, slip op. at 16.

The Court reached this conclusion for the same three reasons that supported its rejection of the "death knell" doctrine in Coopers & Lybrand.

First, the plaintiffs' "dismissal device subverts the final-judgment rule" by creating the opportunity for repeated, piecemeal appeals. Microsoft, ___ U.S. ___, slip op. at 12-13. The final-judgment rule is designed to funnel all issues into a single appeal at the end of the case, whereas the "dismissal device" in Microsoft, like the "death knell" doctrine, gives a plaintiff the opportunity to file repeated appeals. Id. at 3, 12-14. The risk of repeat appeals "is greater" here because the plaintiffs could dismiss as of right at any time, whereas under the "death knell" doctrine, the court of appeals had to approve each appeal. Id. at 14.

Second, the plaintiffs' dismissal device both "disturb[s] the appropriate relationship between respective courts" and "undercuts Rule 23(f)'s discretionary regime." Microsoft, ___ U.S. ___, slip op. at 14. Rule 23(f) sets out the proper balance for determining whether to allow an interlocutory appeal of a class certification decision and leaves that decision to the discretion of the court of appeals. Id. at 14-16. That discretion "would be severely undermined," the Court held, by allowing the plaintiffs to invoke an appeal of as right by dismissing their individual claims. Id. at 12, 14-16.

Finally, it was fundamentally unfair that the dismissal device would be available only to plaintiffs, not defendants. That "one-sidedness" "reinforce[d]" the Court's conclusion that the voluntary dismissal here "does not support appellate jurisdiction of prejudgment orders denying class certification." Microsoft, ___ U.S. ___, slip op. at 17. Instead, "Rule 23(f)'s evenhanded prescription" applies. Id.

The three concurring Justices agreed with the majority that the Ninth Circuit lacked jurisdiction here, but based on the lack of an Article III case-or-controversy: The plaintiffs voluntarily dismissed their claims against Microsoft, so the parties were no longer adverse. Microsoft, ___ U.S. ___, slip op. at 1, 3-4 (Thomas J., concurring in the judgment). The concurrence further explained that a class action claim is merely "a procedural mechanism that enables a plaintiff to litigate his individual claims on behalf of a class," not a separate, independent claim. Id. at 4.

Lesson from Microsoft

  • Microsoft—the U.S. Supreme Court's first decision substantively interpreting Rule 23(f)—confirms that class certification rules cannot be one-sided and unevenly favorable to plaintiffs. Despite the Ninth Circuit's sympathy for plaintiffs who are denied class certification, the U.S. Supreme Court recognized that class certification can have the "reverse death knell" effect—"'[a]n order granting certification ... may force a defendant to settle rather than ... run the risk of potentially ruinous liability.'" Microsoft, ___ U.S. ___, slip op. at 17 (citations omitted). As other courts have explained, "certifying the class may place unwarranted or hydraulic pressure to settle on defendants." Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 165 (3d Cir. 2001).

    The Court's acknowledgment of the "reverse death knell" effect provides class action defendants with another basis to persuade courts of appeals to allow Rule 23(f) petitions for interlocutory appeal from the grant of class certification. To date, Rule 23(f) petitions from defendants have been granted at lower rates than those from plaintiffs.

  • Microsoft reaffirms that Rule 23(f) is the appropriate mechanism for plaintiffs to seek an immediate appeal of a denial of class certification. Rule 23(f) provides a balanced approach to meet the needs of both parties in putative class actions and leaves the decision whether to allow an interlocutory appeal within the sole discretion of the courts of appeals.
  • The three-Justice concurrence provides a reminder that class action claims should not be divorced from named plaintiffs' individual claims. Named plaintiffs' individual claims are the foundation for satisfying the Article III case-or-controversy requirement, without which there can be no class claims.
  • Class action parties should continue to monitor relevant pending legislation. The Fairness in Class Action Litigation Act of 2017 (H.R. 985) passed the House of Representatives in March 2017 with a provision that allows appeal as of right by both plaintiffs and defendants from the grant or denial of class certification (see § 1723). Passage of that legislation would moot the specific holding in Microsoft but would further reinforce principles of equal treatment for plaintiffs and defendants in class actions.

Three Key Takeaways

  1. Class action plaintiffs cannot manufacture immediate appellate review of the denial of class certification by voluntarily dismissing their individual claims.
  2. Any immediate appeal from the denial or grant of class certification should be sought under Rule 23(f) and is within the discretion of the courts of appeals.
  3. Courts are reminded to treat class action plaintiffs and defendants evenhandedly, given the heavy burdens that class certification places on class action defendants.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.