As regular class action litigators are aware, Rule 23(f) provides a potential safety valve in case of an adverse class certification order:  within 14 days, a party may file a petition to the applicable court of appeals seeking interlocutory appeal of the order.  However, if a litigant first files a motion for reconsideration after the 14-day time limit, and then – after the motion is denied months later – files a Rule 23(f) petition, is the appellate court without jurisdiction to consider the petition?  In Lambert v. Nutraceutical Corp., the Ninth Circuit answered that question in the negative, finding that the 14-day deadline is not jurisdictional, and therefore may be equitably tolled by such a motion.  Practitioners are advised, however, not to assume that other courts (particularly the Third Circuit, and likely the Tenth and Eleventh Circuits as well) would allow the Rule 23(f) deadline to be so tolled.

The case concerns a product known as “Cobra Sexual Energy,” which is an aphrodisiac dietary supplement that its manufacturer Nutraceutical marketed as enhancing sexual performance.  Cobra Sexual Energy had not, however, received approval from the Food and Drug Administration (“FDA”), and thus the plaintiff Lambert alleged that the product’s label violated several FDA rules.  Lambert brought a consumer class action for violations of California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act.

The lower district court initially certified the class, but then granted Nutraceutical’s motion to decertify on the basis that Lambert failed to provide key evidence necessary to apply his classwide model for damages.  Ten days after the order, Lambert informed the district court during a status conference that he intended to file a motion for reconsideration of the decertification order.  The district court instructed Lambert to file his motion ten days later, which he did.  Three months later, the district court denied Lambert’s motion for reconsideration, which prompted Lambert to file his Rule 23(f) petition 14 days afterwards.  Thus, from the time of the district court’s decertification order to the time of Lambert’s Rule 23(f) petition, more than 4 months had passed – far exceeding the 14-day time limit of Rule 23(f).

The Ninth Circuit acknowledged that Lambert’s petition would be time-barred according to the plain language of Rule 23(f), but then concluded that the rule’s time limit is not jurisdictional.  Rather, because the time limit is contained in a rule promulgated by the Supreme Court, rather than in a Congressional statute, the time limit is merely a matter of procedural “claims-processing.”  A deadline contained in a statute, on the other hand, “delineates the classes of cases or persons within a court’s adjudicatory authority,” and a party’s failure to adhere to such a deadline removes a court’s authority over the subject matter.  The Court primarily relied on the Supreme Court’s decision in Eberhart v. U.S., 545 U.S. 12 (2005), in arriving at its conclusion.

The non-jurisdictional nature of the Rule 23(f) deadline means that equitable exceptions, such as tolling, may apply to avoid or soften the deadline.  Such equitable exceptions are meant to allow a “good faith litigant” to have his day in court, and depend on whether the litigant “pursued his rights diligently” and whether external circumstances (such as a deadline imposed by the district court) affected the litigant.  Accordingly, “[a]ll circuits to consider tolling the Rule 23(f) deadline have held that the deadline may be tolled when a litigant files a motion for reconsideration within the fourteen-day deadline.”  This exception did not apply to Lambert, however, because he filed his motion for reconsideration 20 days after the district court’s decertification order.

The Ninth Circuit nonetheless held that the equitable factors weighed in plaintiff’s favor:  “because Lambert informed the court orally of his intention to seek reconsideration of the decertification order and the basis for his intended filing within fourteen days of the decertification order and otherwise acted diligently, and because the district court set the deadline for filing a motion for reconsideration with which Lambert complied, the Rule 23(f) deadline should be tolled.”  The Court acknowledged that the Third Circuit in Gutierrez v. Johnson & Johnson, 523 F.3d 187 (3d Cir. 2008), reached the opposite conclusion, and that the Tenth and Eleventh Circuits would likely not allow a district court’s scheduling order to affect or toll the Rule 23(f) deadline.

Accordingly, litigants should continue to adhere to the 14-day Rule 23(f) deadline, but should also be aware that failure to do so under certain circumstances may not preclude the Ninth Circuit from considering the petition.

http://cdn.ca9.uscourts.gov/datastore/opinions/2017/09/15/15-56423.pdf