Appellate: The Landscape of Pretrial Appeals Is Changing Rapidly

Berman points to the 9th Circuit’s May 2024 rejection of Apple’s attempt to appeal the certification of a class of app purchasers bringing antitrust claims against the tech behemoth. The circuit court’s order denying permission to appeal—without any explanation of the court’s reasoning beyond a simple citation to Rule 23(f) and a case identifying the relevant factors—set the stage for a $7 billion-plus class action accusing Apple of antitrust violations in its App Store. “This is just one example where a gigantic class was certified and the Court of Appeals refused to disturb the certification,” she says.

The 9th Circuit is no outlier in this regard. “The rates of acceptance for appeals of Rule 23(f) certifications vary substantially across circuits, but it’s well under 50 percent in pretty much every one,” Berman says. “And an actual reversal is of course a subset of that, so in most circuits the ‘success rate’ for these appeals is 20 percent or less.” It is thus imperative, she says, that litigants bring their best arguments on the certification issue before the district court—because they cannot count on getting a second chance to prevail on certification at the appeals stage.

Harder To Win on Rule 12

Meanwhile, Rule 12 early dismissals for failing to state a claim—a traditional tactic of choice for class action defendants—are becoming harder to defend on appeal. That, in turn, has made district courts less inclined to dismiss class actions under Rule 12 in the first instance, fearing reversal on appeal and heeding the call of the Courts of Appeals to apply the pleading standards more liberally.

 Over the course of several decades, says Berman, “Rule 12 had become an increasingly high bar, with the courts scrutinizing allegations very closely and being very inclined to dismiss cases where there was any basis to say that the allegations didn’t state a viable claim.” That held true in the class action context, where district courts had an extra incentive to avoid allowing complex multiparty matters to proceed to discovery and trial.

More recently, however, appeals courts have been taking a closer look at that trend. “They have generally been reversing that course, and they are now more willing to overturn class action dismissals,” says Berman. “It’s getting harder for defendants to win on Rule 12.” As a result, she adds, “we’ve been seeing some very big class actions get further than they probably would have a while ago.”

In light of this trend, says Berman, class action defendants should keep in mind that they can also or alternatively move to strike allegations—including class allegations—as insufficient. That more tailored approach may succeed where a comprehensive Rule 12 motion may fail either before the district court or on appeal. And it can help position the defendant to succeed at the summary judgment stage—after which the appeals court may be less inclined to reverse, knowing that the class plaintiffs were given the opportunity to develop their claims through discovery. 

“There is a lot of push and pull around appellate review of class action dismissals right now, and the Courts of Appeals are struggling with how closely to scrutinize class allegations at the Rule 12 stage and how much grace to give class plaintiffs,” says Berman. The current trend toward loosening pleading standards may make disposing of meritless claims harder for class action defendants—at least at the earliest stages. But a savvy class action defense lawyer may be able to prevail through a more tailored approach and thereby narrow the claims or the class.