Keena v. Groupon, Inc.

• Decision Date: 27 March 2018
• Docket Number: No. 16-1873,16-1873
• Citation: 886 F.3d 360
• Parties: Erin KEENA, for herself and all others similarly situated, Plaintiff–Appellant, v. GROUPON, INC., a Delaware Corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

886 F.3d 360

Erin KEENA, for herself and all others similarly situated, Plaintiff–Appellant,

v.GROUPON, INC., a Delaware Corporation, Defendant–Appellee.

No. 16-1873

United States Court of Appeals, Fourth Circuit.

Argued: January 24, 2018

Decided: March 27, 2018

ARGUED: Daniel Chappell Flint, LAW OFFICES OF DANIEL C. FLINT, PC, Southfield, Michigan, for Appellant. Scott Thomas Schutte, MORGAN LEWIS & BOCKIUS, LLP, Chicago, Illinois, for Appellee. ON BRIEF: Jonathan A. Berry, Washington, D.C., Gregory T. Fouts, MORGAN, LEWIS & BOCKIUS LLP, Chicago, Illinois, for Appellee.

Before GREGORY, Chief Judge, and KING and HARRIS, Circuit Judges.

Dismissed by published opinion. Judge King wrote the opinion, in which Chief Judge Gregory and Judge Harris joined.

KING, Circuit Judge:

Erin Keena desires relief from a district court ruling in the Western District of North Carolina that requires her to arbitrate claims alleged in her complaint against Groupon, Inc. After the court ordered the parties to arbitrate, Keena moved to amend the arbitration order to include, inter alia, a provision dismissing her complaint with prejudice. The court acceded to that aspect of Keena’s motion and dismissed with prejudice. Keena has appealed from the dismissal. As explained below, because the voluntary dismissal of her complaint is not an appealable final decision under 28 U.S.C. § 1291, we lack jurisdiction and must dismiss Keena’s appeal.

I.

A.

In February 2015, plaintiff Keena purchased a voucher for massage services from Groupon, a web-based entity that partners with other businesses to provide discount products and services to customers.

In making her purchase, Keena entered into a form agreement that required her to resolve any disputes with Groupon through arbitration. When Keena was unable to redeem her Groupon voucher, she sought reimbursement and received an electronic certificate called "Groupon Bucks." The certificate, however, could only be used to purchase goods and services on Groupon’s website.

Nearly a year later, Keena—individually and on behalf of a putative class of similarly-situated plaintiffs—filed this civil action against Groupon. The complaint alleged claims against Groupon on the basis of its reimbursement policy. Groupon responded by invoking the arbitration clause in its agreement with Keena and moved to enforce that clause. The district court agreed with Groupon and ordered the parties to arbitrate. See Keena v. Groupon, Inc. , 3:15-cv-00520 (W.D.N.C. June 21, 2016), ECF No. 32 (the "Arbitration Order"). The court did not reach or address any class certification issues, but instead stayed all further proceedings in Keena’s lawsuit pending arbitration. Id. at 4-14.

A few weeks later, in July 2016, Keena moved to amend the Arbitration Order, requesting the district court to dismiss her complaint with prejudice. In making her dismissal request, Keena advised the court that she would not pursue arbitration because the costs of that process outweighed the potential recovery. In the alternative, Keena sought the court’s approval for an interlocutory appeal of the Arbitration Order.

In disposing of Keena’s motion to amend the Arbitration Order, the district court first declined to certify an interlocutory appeal under 28 U.S.C. § 1292(b).¹ The court agreed to amend the Arbitration Order, however, and granted Keena’s request that her complaint be dismissed with prejudice. See Keena v. Groupon, Inc. , 3:15-cv-00520 (W.D.N.C. July 22, 2016), ECF No. 34 (the "Dismissal Order"). The court explained that "continuing to stay the proceedings serves no useful purpose," in view of Keena’s decision not to engage in arbitration. Id. at 3. Having failed to garner the district court’s approval for an interlocutory appeal, but having secured the dismissal of her complaint with prejudice, Keena noted an appeal from the Dismissal Order. She contends that we possess final order jurisdiction pursuant to 28 U.S.C. § 1291.

B.

There are three theories of appellate jurisdiction that assist our analysis of the jurisdiction issue in this appeal. First, § 1291 vests the courts of appeals with jurisdiction in appeals "from all final decisions of the district courts of the United States." See 28 U.S.C. § 1291 (emphasis added). Put simply, absent a final decision of a district court, there is no jurisdiction in the court of appeals under § 1291.

As mentioned, Keena was denied an interlocutory appeal from the Arbitration Order under 28 U.S.C. § 1292(b). Section 1292(b) authorizes a district court to certify an otherwise non-appealable interlocutory order for immediate appellate review if two criteria are satisfied. First, the court must certify that the interlocutory order involves a "controlling question of law as to which there is substantial ground for difference of opinion." See 28 U.S.C. § 1292(b). Second, the court must also certify that "an immediate appeal from the order may materially advance the ultimate termination of the litigation." Id. If a district court has agreed to certify a § 1292(b) appeal, the appropriate court of appeals may thereafter exercise its discretion and approve a proper petition for appeal. With those criteria satisfied, the court of appeals can exercise its jurisdiction and review the question that is certified. Id .

In a third type of appeal that warrants a brief explanation, a litigant seeking appellate review of an order granting or denying class certification can invoke Rule 23(f) of the Federal Rules of Civil Procedure and seek permission to appeal from the appropriate court of appeals. See Fed. R. Civ. P. 23(f). In contrast to parties who are resisting arbitration, however—such as Keena in this case—a Rule 23(f) petitioner does not need a district court certification before petitioning for appeal in the court of appeals. Id.

C.

In May 2017, we briefly placed this appeal in abeyance pending the Supreme Court’s resolution of an issue that potentially impacted Keena’s assertion of § 1291 appellate jurisdiction. See Baker v. Microsoft Corp. , 797 F.3d 607 (9th Cir. 2015), cert. granted , ––– U.S. ––––, 136 S.Ct. 890, 193 L.Ed.2d 783 (2016). Some background of that litigation and its resolution is pertinent here. Plaintiff Baker had filed a putative class action against Microsoft on behalf of owners of the Xbox 360. When the district court denied class certification, Baker sought appellate review pursuant to Rule 23(f). The court of appeals, however, denied Baker’s Rule 23(f) petition for appeal. Baker’s innovative lawyer then stipulated to a voluntary dismissal of his complaint with prejudice.

After the district court in Washington dismissed his complaint with prejudice, Baker pursued a final order appeal to the Ninth Circuit under 28 U.S.C. § 1291, seeking reversal of the district court’s denial of class certification. Microsoft contested appellate jurisdiction, however, maintaining that Baker was—in the circumstances—not appealing from a final decision under § 1291. The court of appeals disagreed with Microsoft, ruling that Baker’s voluntary dismissal was nevertheless an appealable final decision. The Ninth Circuit vacated the district court’s denial of Baker’s class certification request and remanded for further proceedings.

The Supreme Court granted certiorari in Microsoft to address whether the Ninth Circuit had jurisdiction to review the district court’s denial of class certification after Baker voluntarily dismissed his claims with prejudice. See Microsoft Corp. v. Baker , ––– U.S. ––––, 137 S.Ct. 1702, 198 L.Ed.2d 132 (2017). Justice Ginsburg—for a five-justice majority—explained that the order approving Baker’s voluntary dismissal did not qualify as a final decision under § 1291. Id. at 1712-15. That is, the Court ruled that " § 1291 ’s firm final-judgment rule is not satisfied whenever a litigant persuades the district court to issue an order purporting to end the litigation." Id. at 1715. Justice Thomas, in a three-justice concurrence, agreed that the Ninth Circuit lacked jurisdiction, but would have directed a dismissal of the appeal for lack of Article III standing. Id. at 1715-17.

II.

A.

After the Microsoft decision was rendered, we secured supplemental briefing concerning its possible impact on Keena’s appeal. In response, Groupon argued that Microsoft controls, and that we lack final decision jurisdiction under 28 U.S.C. § 1291. Keena countered, on the other hand, by arguing that the Microsoft case is distinguishable, and asserted that we possess § 1291 jurisdiction.

Like the plaintiff in Microsoft , Keena secured a voluntary dismissal of her complaint in order to seek an immediate appeal from an otherwise interlocutory order.² Justice Ginsburg’s opinion in Microsoft rejected the nearly identical effort made in that case, characterizing Baker’s appeal to the court of appeals as arising from a "voluntary-dismissal tactic" that contravenes the final-judgment rule embodied in 28 U.S.C. § 1291. See Microsoft Corp. v. Baker , ––– U.S. ––––, 137 S.Ct. 1702, 1712-15, 198 L.Ed.2d 132 (2017). Under the final-judgment rule, "the whole case and every matter in controversy in it must be decided in a single appeal." Id. at 1712 (quoting McLish v. Roff , 141 U.S. 661, 665-66, 12 S.Ct. 118, 35 L.Ed. 893 (1891) ). Justice Ginsburg’s rationale is instructive here, and provides an apt description of what occurred in Keena’s effort to secure an immediate appeal.

B.

The Microsoft decision thoroughly explained how the voluntary-dismissal tactic deprived the court of appeals of § 1291 jurisdiction. For example, the Supreme Court recognized that Baker had usurped the Ninth Circuit’s authority to decide whether to authorize an appeal from a class certification order. See Microsoft , 137 S.Ct. at 1714. Rule 23(f) of the civil rules vests the courts of appeals with discretion over when and whether to hear appeals from class certification orders. See Fed. R. Civ. P. 23(f). Under Baker’s theory, however, a class plaintiff can ignore a court...