The U.S. Supreme Court has agreed to hear the appeal of a case in which plaintiff lawyers resuscitated a class action over XBox 360 game consoles by the unusual tactic of agreeing to dismiss their claims.
The Ninth Circuit Court of Appeals allowed lawyers to use that tactic to press an appeal of a lower court's rejection of a class composed of millions of XBox buyers, a tiny number of whom may have suffered scratched disks from an alleged design defect. Normally such interlocutory appeals are denied and several other circuits have refused to allow lawyers to challenge a judge's order on class certification in this way, but the Ninth, as is its fashion, decided differently.
Microsoft says the case, Microsoft v. Baker, "is immensely important to the proper administration of the class device." If plaintiff lawyers can appeal every ruling by a lower court rejecting class certification, they will greatly increase the pressure on defendant companies to settle and pay them a fee to go away.
The Ninth Circuit's ruling is a backdoor attempt to revive the "death knell" doctrine the Supreme Court killed with Coopers & Lybrand v. Livesay in 1977, Microsoft said. In that case, the court rejected an emerging idea that plaintiff lawyers could appeal lower-court rulings that made their cases unsustainable for the simple reason that individual claimants wouldn't sue over small amounts.
In this case, lawyers have made a twist on the tactic by voluntarily dismissing their cases to create a final judgment which they then seek to appeal. It was actually the second time the class action came back from the dead, since lawyers at Keller Rohrback in Seattle had lost a previous class certification motion in 2008 after 16 months of pretrial action. The judge in that case held that less than one percent of XBox customers actually experienced disk scratching, which Microsoft says is caused by moving the unit while a disk is spinning, and it was inappropriate to group those plaintiffs together with the rest who had no specific damage claim. The Ninth Circuit refused to intervene.
The lawyers revived the case in 2011 and a different judge rejected class cert for the same reasons, and again the Ninth refused to accept an appeal. Then the lawyers dismissed the cases of the representative plaintiffs and the Ninth, relying on a 2014 ruling of its own, agreed to hear an appeal.
