There’s No Jurisdiction to Appeal Orders Concerning Class Certification Unless You Obtain Court’s Permission First

Bates v. Bankers Life and Casualty, 2/24/17, 9th Cir.

After the district court struck their class allegations, Plaintiffs appealed without first getting permission from the district court or from the Ninth Circuit.  Held: Appeal dismissed for lack of jurisdiction.

Bankers Life sells long term health insurance policies to the elderly. Unhappy with how their policies were being administered, Plaintiffs sued Bankers Life asserting individual claims (e.g., breach of contract) as well as various class action claims that policyholders’ claims were being mishandled and benefits were therefore being denied.  On Defendant’s motion, the class allegations were stricken.  Striking class allegations is the functional equivalent to denying a motion for class certification. Plaintiffs did not ask the district court to certify its order striking class allegations for interlocutory appellate review under 12 U.S.C. 1292(b); nor did plaintiff’s petition for the Ninth Cir.’s permission to appeal under FRCP 23(f).  Plaintiff instead relied on FRCP 54(b), the rule concerning judgments.  

Pursuant to section 54(b), plaintiff asked the district court to enter final judgment on its decision to strike class allegations, which the court did.  That determination would seem to satisfy the prerequisite for appellate jurisdiction – Section 1291 grants appellate jurisdiction over final decisions.  The problem is that a judgment is final when it ends the litigation between the parties (plaintiffs still had their individual breach of contract claims), and a district court does not have the discretion to convert a non-final judgment into a final judgment.   Finally, while defendant had not raised the issue of lack of appellate jurisdiction with the district court, that didn’t change the result: A defect in jurisdiction can be raised for the first time on appeal.