Microsoft v. Baker

A voluntary dismissal of a putative class action lawsuit in which the parties have stipulated to renew the claim if an appellate court reverses the denial of class certification is not a final judgment under Federal Rule of Civil Procedure 23(f).

Respondents are consumers of a video game console produced by Petitioner. Respondents brought a putative class action suit against Petitioner, claiming that the console destroyed game discs used under normal gaming conditions. Respondents' case was dismissed by the district court, because the district court previously denied a putative class certification with different plaintiffs, but with the same allegations. The district court held that the doctrine of comity prevented re-litigation of the issue. The Ninth Circuit denied Respondents Rule 23(f) petition for interlocutory review. Respondents then moved to dismiss their case with prejudice on the condition that they were permitted to appeal the class certification denial upon final judgment. In review of the denial, the Ninth Circuit concluded that the order was final and granted appellate jurisdiction. The Ninth Circuit reversed the district court and held that Respondents putative class certification was not foreclosed by the order in the prior case. On appeal, the U.S. Supreme Court determined that Respondents’ voluntary motion for dismissal undermined the finality rule, because it may allow meritless claims to assume a risk that individual claimants with meritorious claims would not. The Court also determined that Respondents’ strategy undermined the Rule 23(f) interlocutory process, because it was an attempt to transform the interlocutory order into a final order in a manner that conflicted with the intermediate design of the rule. REVERSED and REMANDED.