On November 27, 2018, the Supreme Court heard oral argument in Nutraceutical Corp. v. Lambert, No. 17-1094, to determine whether Federal Rule of Civil Procedure 23(f)’s 14-day deadline to file for permission to appeal an order granting or denying a class-action certification is subject to equitable exceptions.
Rule 23(f) provides that the court of appeals may hear an appeal from an order granting or denying class certification. To appeal the order, the party must petition the court of appeals for permission within 14 days after the order is entered.
In Lambert, Respondent Troy Lambert filed a class action alleging violations of California’s false advertising and unfair competition laws arising out of Nutraceutical’s sale of dietary supplements. After initially certifying the class in 2014, the District Court decertified the class on February 20, 2015. Pursuant to Rule 23(f), Lambert had fourteen days to ask the court of appeals for permission to appeal the decertification order. During a status conference on March 2, 2015, Lambert requested the District Court to recertify the class; the court instructed Lambert to file a motion for reconsideration within ten days. Lambert timely moved for reconsideration on March 12, 2015, which the District Court denied on June 14, 2015.
Fourteen days after the District Court denied Lambert’s motion, he petitioned the Ninth Circuit Court of Appeals for leave to appeal the decertification order. Nutraceutical opposed the petition as untimely because it was filed more than fourteen days after the February 20, 2015 decertification order. The Ninth Circuit held that Lambert’s motion for reconsideration tolled Rule 23(f)’s fourteen-day deadline for petitioning the appealed court to appeal the trail court’s decertification order.
The Ninth Circuit reasoned that Rule 23(f)’s deadline should be tolled under the circumstances because Lambert diligently complied with the trial court’s instructions to file a motion for reconsideration. The court found that Rule 23(f) is a non-jurisdictional claim processing rule and, as such, the prescribed filing deadlines could be altered due to equitable considerations to avoid or soften the statute of limitations. Moreover, courts analyzing the issue that have held that the filing of a motion for consideration generally tolls deadlines for filing an appeal, provided that the motion is made within time for appeal.
On appeal Nutraceutical argues that the Ninth Circuit erred by making a judge-created to a mandatory deadline provided by Rule 23(f). The deadlines provided by claims processing rules like Rule 23(f) do not allow the court to alter explicit deadlines because to do so would undermine the purpose of those rules in the first place. Meanwhile, Lambert argues where a rule is non-jurisdictional, courts have the inherent power to modify deadlines to further the interests of justice, including when a litigant abides by other instructions from the court.
This case is important because parties to class action lawsuits frequently seek review under Rule 23(f) and, if the Supreme Court chooses to recognize equitable exceptions to the Rule, both plaintiffs and defendants may benefit from additional flexibility. Recognizing equitable exceptions would also present additional challenges for businesses seeking to dismiss class actions on procedural grounds. The Supreme Court will be forced to confront what to do when lower courts attempt to modify the Federal Rules though local rules or practice when the express language of the rules prescribes seemingly mandatory guidelines.