Duane Morris Class Action Review - 2023 - Report - Page 61
In the last of the Sixth Circuit’s June 2022 decisions on Rule 23(f) petitions, In Re
Ascent Resources-Utica, LLC, 2022 U.S. App. LEXIS 17437 (6th Cir. June 23, 2022),
the Sixth Circuit elaborated further on the standard and four factors described in
Arends and Macy’s. The defendant argued that its Rule 23(f) petition should be granted
based on the death-knell factor because the risk of $90 million in damages threatened
its “entire business model” and created undue settlement pressure. The Sixth Circuit
rejected the argument because the defendant’s statements were devoid of any context.
“[T]he discussion of this factor must go beyond a general assertion,” the Sixth Circuit
explained. Because “[t]he magnitude of damages is relative to the size of the
defendant,” the defendant “should provide the court insight into potential expenses and
liabilities.” Id. at *3. The defendant’s remaining arguments focused on the novelty of
issues raised and alleged abuses of discretion by the district court. The Sixth Circuit
rejected each argument and denied the Rule 23(f) petition.
B.
Rulings Involving Class Action Appeals Under 28 U.S.C. § 1292(b)
The text of 28 U.S.C. § 1292(b) grants appellate courts discretion to hear an order
certified for interlocutory appeal by the district court if three elements are met: (i) the
order involves a controlling question of law; (ii) an immediate appeal may materially
advance the ultimate conclusion of the litigation; and (iii) a substantial difference of
opinion exists regarding the correctness of the decision. While litigants typically appeal
class certification-specific orders under Rule 23(f), litigants can attempt an interlocutory
appeal under § 1292(b) for a broader range of orders that a district court may issue in
class action lawsuits.
In 2022 courts largely continued the trend of granting § 1292(b) appeals in only limited
circumstances. For instance, in Won, et al. v. Amazon.com Inc., Case No. 21-CV-2867
(E.D.N.Y. Nov. 30, 2022), the defendant challenged the court’s August 19, 2022 ruling
in the plaintiff’s proposed class action brought under the Uniformed Services
Employment and Reemployment Rights Act (USERRA). The plaintiff alleged that the
defendant violated the military service anti-bias law by paying workers who take military
leave only the difference between their usual pay and what they are paid by the armed
services for their military duty, while providing full pay to employees who miss work for
jury duty and other similar short-term leaves. The August 19, 2022 ruling held that the
plaintiff, a former warehouse worker in New York, can proceed with claims for money
damages on behalf of herself and other employees nationwide. In partly denying the
defendant’s motion to dismiss, the court ruled that the defendant was wrong that paid
leave for military service is not a right or benefit guaranteed under the USERRA. The
court rejected the defendant’s request for an immediate appeal on the issue of whether
paid leave is a “benefit” protected by the USERRA. It opined that the issue of first
impression in the Second Circuit was not enough to speed up the appeal. The court
noted that while the defendant met some of the criteria for interlocutory review, the
defendant failed to show that substantial grounds exist for a difference of opinion on the
issue because “the entire body of active case law supports” the conclusion that the
USERRA treats paid leave as a job benefit – meaning the company must wait until the
case concludes at the district court level to appeal this issue.
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© Duane Morris LLP 2023
Duane Morris Class Action Review – 2023
