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Gelboim v. Bank of America - U.S. Supreme Court Allows Immediate Appeals in MDL Cases

In the recent unanimous opinion in Gelboim v. Bank of America Corp., the U.S. Supreme Court ruled that a plaintiff in a consolidated federal multi-district litigation (MDL) case had the right to immediately appeal the dismissal to the U.S. Court of Appeals, despite the fact that other MDL claims were still pending. This opinion, written by Justice Ginsburg, resolved a circuit split, provided some much needed clarity to MDL plaintiffs on the timing of appeals, and helped guarantee some mass tort plaintiffs a speedy appeal.

Generally, outside of a few narrow circumstances that are defined by statute, a party may not appeal a trial court's ruling until the judgment is final, and there is only a final judgment once all claims of all parties are resolved. In a case with multiple plaintiffs, this means that even if all of one plaintiff's claims are disposed, that plaintiff cannot appeal until all of the other plaintiffs' claims are also resolved. Also, there is a 30-day deadline to file an appeal in federal court that is triggered by the entry of a final judgment, so it is important to know when the court's judgment is final.

This creates some confusion in multi-district litigation. In an MDL case, numerous cases brought by different plaintiffs in different federal courts that involve common issues, such as in a mass products liability situation, are transferred to one court (the "transferee court") and temporarily consolidated for the purpose of conducting discovery and pre-trial motions. If a case is not settled or dismissed through pre-trial motions, it is ultimately transferred back to the original court (the "transferor court") for a separate trial.

While MDL cases are consolidated for pre-trial purposes, they are still separate lawsuits brought by separate plaintiffs. The confusion arises from the situation where the transferee court enters an order that dismisses all of the claims of some plaintiffs while allowing claims belonging to other plaintiffs to go forward. Essentially, for purposes of determining whether there is a final judgment allowing an appeal, the courts are divided on whether a consolidated MDL case is treated as a bunch of separate cases or one big case. The Ninth, Tenth, and Federal Circuits have followed the "one big case" approach and held that a transferee court's ruling disposing of only some plaintiffs' cases is not a final judgment because it does not dispose of all of the claims in the MDL. The Third, Fifth, Seventh, Eighth, Eleventh, and D.C. Circuits, on the other hand, have treated each transferred case as a separate case, holding that any ruling disposing of all of a given plaintiff's claims is a final, appealable judgment as to that plaintiff.

In Gelboim, which came out of an MDL dealing with the LIBOR banking scandal, the trial court entered an order dismissing an entire class of claims from the MDL, which had the effect of dismissing the entire cases of a number of plaintiffs. The Second Circuit, from which the Gelboim case was appealed, followed the Ninth, Tenth, and Federal Circuits' approach and dismissed the plaintiffs' appeal, holding that there was no final judgment. A unanimous Supreme Court reversed the Second Circuit and held that the more sensible approach was to treat each transferred case as separate and hold that each transferred case is appealable once all of the claims in that transferred case are disposed. Writing for the Court, Justice Ginsburg noted the "quandary" that plaintiffs were placed in under the Second Circuit approach, wherein they would either have to file an immediate appeal which could be dismissed for lack of a final judgment, or could wait until the entire MDL case is over, which could result in missing the 30-day deadline and the permanent loss of their right to appeal.

The Supreme Court's sensible ruling has cleared up a great deal of confusion and properly allows plaintiffs whose claims are dismissed by the MDL transferor court to appeal immediately rather than wait for their day in court.

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