# United States Court of Appeals **for the Fifth Circuit**

No. 21-40720

Damonie Earl, individually and on behalf of all others similarly situated; Linda Rugg, individually and on behalf of

all others similarly situated; Alesa Beck,

individually and on behalf of all others similarly situated; Timothy Blakey, Jr.; Stephanie Blakey; Marisa Thompson, individually and on behalf of all others similarly situated; Muhamma d Muddasir Khan; John Rogers, individually and on behalf of all others similarly situated; Valerie Mortz-Rogers, individually and on behalf of all others similarly si tuated; James LaMorte; Brett Noble, individually and on behalf of all others similarly situated; Ruben Castro, individually and on behalf of all others similarly si tuated; Fritz Ringling,

individually and on behalf of all others similarly situated; Litaun Lewis, individually and on behalf of all
others similarly situat ed; Lance Hogue, Jr.,

individually and on behalf of all others similarly situated,
Plaintiffs—Appellees ,

versus

The Boeing Company; Southwest Airlines Company,

Defendants—Appellants

. United States Court of Appeals Fifth Circuit 

### FILED December 22, 2021 Lyle W. Cayce Clerk Case: 21-40720 Document: 00516141991 Page: 1 Date Filed: 12/22/2021No. 21-40720

2 Appeal from the United States District Court for the Eastern District of Texas USDC No. 4:19-cv-507

Before Elrod, Oldham, and Wilson, Circuit Judges

. Andrew S. Oldham , Circuit Judge :
The defendants in this class action lawsuit have move d for a stay of discovery while this court reviews thei r appeal under Federal Rule of Civil Procedure 23(f). We grant the defendants’ stay motion.

I.
This is a class action lawsuit against the Boeing Company and Southwest Airlines for allegedly conspi ring to conceal design defects in Boeing’s 737 MAX 8 aircraft (the “M AX”) and thereby defrauding airline ticket purchasers. Plaintiffs allege that Boeing and Southwest were able to inflate the prices of airline ticket s by concealing defects in the MAX. Widespread public knowledge of the MA X’s defects would have lowered the demand for air travel on airlines flyi ng the MAX, the theory goes, so prices would have decreased and plaintiffs woul d have paid less for their tickets. Plaintiffs seek damages under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) , 18 U.S.C. § 1962.
On September 3, 2021, the district court certified four classes of plaintiffs. These classes encompassed persons who purchased or otherwise
bore the economic burden for tickets on Southwest or American Airlines between August 29, 2017, and Marc h 13, 2019, for routes where MAX aircraft were in use. Boeing and Southw est petitioned for permission to bring an interlocutory appeal of the class-certification decision. See Fed. R. Civ.
P. 23(f). We granted Boeing and Southwest permission to appeal on September 30, 2021. Case: 21-40720 Document: 00516141991 Page: 2 Date Filed: 12/22/2021No. 21-40720

3 Boeing and Southwest then moved the district court to stay discovery pending the Rule 23(f) appeal. On No vember 19, 2021, the district court granted the motion in part and denied it in part. The district court stayed discovery pertaining to class membershi p during the pendency of the appeal. But the district court allowed all other discovery to proceed, including discovery on the merits. Boeing and Sout hwest then filed this motion in our court, asking us to stay all discovery until the Rule 23(f) appeal is resolved.

II.
We have authority to stay proceedings in the district court while a Rule 23(f) appeal is pending. See Fed. R. Civ. P . 23(f). To decide whether to grant a stay, we consider four fa ctors: (1) whether the movant makes a strong showing that it is likely to succeed on the merits; (2) whether the movant will be irreparably injured without a stay; (3) whether other interested parties will be irreparabl y injured by a stay; and (4) where the public interest lies. Nken v. Holder , 556 U.S. 418, 426 (2009).

Our court has not decided what defe rence is owed to district courts when considering whether to stay discovery pending a Rule 23(f) appeal. But
we note that several of our sister circui ts have concluded that district courts enjoy significant discretion in choosing whether and to what extent to stay discovery pending appeal. See, e.g. , Blair v. Equifax Check Servs., Inc. , 181 F.3d 832, 835 (7th Cir. 1999) (stating that “Rule 23(f) is drafted to avoid delay” and suggesting that stays of discovery should issue infrequently during Rule 23(f) appeals). We need not decide the specific level of deference owed to the district court here, because even under the deferential standard
articulated in cases like Blair , a stay is appropriate by virtue of Boeing and
Southwest’s “demonstration that the probability of erro r in the class certification decision is high enough that the costs of pressing ahead in the district court exceed the costs of waiting.” Ibid. Stated differently, even Case: 21-40720 Document: 00516141991 Page: 3 Date Filed: 12/22/2021No. 21-40720

4 under a deferential standard of review , Boeing and Southwest have shown
that all four Nken factors favor a stay of disc overy during the pendency of their Rule 23(f) appeal.

On the likelihood of success on the merits, Boeing and Southwest have made a strong showing that our court is likely to reve rse the class-certification
decision. Because the district court ce rtified the class action under Rule 23(b)(3), the court was required to fi nd “that the questions of law or fact common to class members predominate over any questions affecting only
individual members.” Fed. R. Civ. P . 23(b)(3). Here, it is likely that such predominance is lacking because “[ q]uestions of individual damage
calculations will . . . overwhelm questions common to the class.” Comcast Corp. v. Behrend , 569 U.S. 27, 34 (2013). Unde r plaintiffs’ theory of injury, they would be owed damages for the di fference between the ticket price they were charged and the ticket price they would have been charged if the MAX’s alleged defects had been widely known an d deflated ticket pr ices. In order to show Rule 23(b)(3) predominance on the question of damages, then, plaintiffs must show that the price-deflat ing effect of public knowledge of the MAX’s defects would have been fairly uniform across all the various routes and dates (over 18 months) involved in this lawsuit. But both the plaintiffs’ and the defendants’ expert testimony su ggest plaintiffs will not be able to make that showing. The substantial predominance questions raised by Boeing and Southwest’s Rule 23(f) peti tions thus give Bo eing and Southwest a significant likelihood of success on appeal.
On irreparable harm, Boeing and So uthwest again have made a strong showing. The district court recognized that the classes in this case contain thousands or millions of members, and disc overy for a class action suit of this magnitude will be very costly and ti me-consuming. Boeing and Southwest assert that they have already spent millions of dollars in defense costs and that plaintiffs’ escalating discovery demands will impose millions more in Case: 21-40720 Document: 00516141991 Page: 4 Date Filed: 12/22/2021No. 21-40720

5 unrecoverable costs absent a stay. The district court also recognized that discovery has become more contentious as this case has proceeded. And it is undisputed that Boeing and Sout hwest’s discover y costs will be
unrecoverable even if the class cert ification is revers ed on appeal.
In light of these concerns, the district court’s approach was to enter a partial stay. It stayed discovery “p ertaining to class membership,” but allowed all other discovery to proc eed. The district court’s primary justification for this approach was its conclusion that the named plaintiffs’
claims would remain even if class cert ification is reversed on appeal. Thus, on the district court’s view, discover y on the merits will eventually proceed anyway, so Boeing and Southwest would not be irreparably harmed by the denying a full stay.
There are at least three problems with that. First, Boeing and Southwest also challenge the plainti ffs’ standing. And if Boeing and Southwest succeed on their standing ch allenge, even the named plaintiffs will be unable to proceed with the suit. See Rivera v. Wyeth-Ayerst Lab’ys , 283 F.3d 315, 319 (5th Cir. 2002) (“St anding may—indeed must—be addressed
even under the limits of a ru le 23(f) appeal.”). Second , even if only the class certification is reversed on appeal, the proportionality requirement imposed by Federal Rule of Civil Procedure 26(b) would impose far different constraints on discovery by eleven named plaintiffs than it would for classes
of millions of air travelers. * Third and finally, the district court’s order

* The crux of our disagreement with Judge Elrod appears to be on this point. Judge Elrod claims that limiting discovery to liabilit y solves this problem because “defendants’ liability does not vary based on class si ze” and “discovery—at least on liability—is inevitable.” Post , at 10–11 (Elrod, J., dissenting). We respectfully disagree with both assertions. Plaintiffs seek to recover for airline ticket premiums they allegedly paid due to defendants’ fraud. Whether defendants are liable for eleven ticket premiums or millions of them depends on the class certificatio n question, so defendants’ liability does vary based on class size. And because of Rule 26(b)’s proportionality requirement, it is not Case: 21-40720 Document: 00516141991 Page: 5 Date Filed: 12/22/2021No. 21-40720

6 threatens to exacerbate rather than alleviate the contentious discovery disputes in this case because it fa ils to draw a workable line between permitted and non-permitted discovery. The parties have already engaged in voluminous motions practice disputin g the propriety of various discovery requests, and the district court’s a pproach would likely further litter the record with disputes over whether a given discovery request falls within the parameters of the district court’s partial stay. Boeing and Southwest have thus shown that denying a full stay w ill subject them to i rreparable harm.

We now consider the final two st ay factors: whether a stay would irreparably harm other interested partie s, and where the public interest lies. Plaintiffs have not plausibly alleged th at they or any other parties will be irreparably injured by delaying further discovery until the conclusion of the Rule 23(f) appeal. The district court cited generalized concerns about spoliation of evidence and avoiding si gnificant delay in the overall resolution of the case. And plaintiffs point to a lleged past discovery malfeasance by Southwest, including Southwest’s alle ged destruction or non-production of highly relevant text messages. But neithe r the district court nor the plaintiffs have identified any specific prospect ive threat of spoliation. And because plaintiffs only seek money damages, it is not apparent why plaintiffs would be prejudiced by waiting on merits disc overy until the end of the Rule 23(f)— especially since discovery related to cl ass membership is already stayed until the conclusion of that appeal . The upshot of a full stay here is that there will be one exhaustive round of discovery post-appeal, rather than two distinct rounds of discovery pending- and post -appeal. Finally, the public interest

“speculation,” id. at 10 n.3, to note that plaintif fs will not be able to proceed with multimillion-dollar merits discovery if the value of their suit is reduced to hundreds or a few thousand dollars. Merits discovery—at least on the scale plaintiffs currently propose— is thus hardly “inevitable.” Case: 21-40720 Document: 00516141991 Page: 6 Date Filed: 12/22/2021No. 21-40720

7 supports staying district court proceedin gs to avoid potentially wasteful and unnecessary litigation costs where, as here, the appellant has shown a substantial likelihood of success on appeal. See Weingarten Realty Invs. v.
Miller , 661 F.3d 904, 913 (5th Cir. 2011).

* * *

IT IS THEREFORE ORDERED that appellants’ motion to stay trial court proceedings pending disposition of this Rule 23(f) appeal is
GRANTED

. Case: 21-40720 Document: 00516141991 Page: 7 Date Filed: 12/22/2021No. 21-40720

8 Jennifer Walker Elrod , Circuit Judge , concurring in part and dissenting in part:
I respectfully dissent from the panel majority’s complete stay of all discovery in this case pending appeal. In staying all discovery, the panel flips Rule 23(f) on its head and places its bu rden on the wrong shoulders. I would instead allow discovery to proceed on the issue of defendants’ liability.
The district court has carefully sh epherded this case through two years of litigation. It did the same in it s order granting limited discovery. The district court acknowledged that the de fendants raise a substantial case on the merits about the propriety of class ce rtification and carefully balanced the equities based on the purpose of the di scovery at issue. The district court disallowed class discovery and allowe d merits discovery while the class certification appeal is pendin g. It also took into a ccount the potential loss of relevant evidence if discovery were not allowed to proceed. 1 In reaching its careful balance, the district court has heeded our guidance and can be trusted to do so again.
Rule 23(f) contemplates infrequent st ays and deference to the district court’s stay decision. Rule 23(f ) was “drafted to avoid delay.” Blair v. Equifax Check Servs., Inc. , 181 F.3d 832, 835 (7th Cir. 1999); Microsoft Corp.
v. Baker , 137 S. Ct. 1702, 1709 (2017) (“Ru le 23(f) was crafte d to balance the benefits of immediate review against the costs of interl ocutory appeals.” (quoting Brief for Civil Procedure Scholars as Amici Curiae at 6–7, 11–14)). To offset our broad discretion to gran t class-certification appeals, Rule 23(f)—together with the standard fo r stays pending appeal—provides that district court proceedings presumptively proceed. E.g. , Prado-Steiman ex rel.

1 In the district court and before us now the plaintiffs raise serious concerns about the preservation of relevant text messages, privilege logs, and third-party documents. Case: 21-40720 Document: 00516141991 Page: 8 Date Filed: 12/22/2021No. 21-40720

9 Prado v. Bush , 221 F.3d 1266, 1273 n.8 ( 11th Cir. 2000) (“Rule 23(f) contemplates that in most cases di scovery (at the very least, merits discovery) will continue [despite] an appe al of the class certification order.”). Accordingly, “[s]tays are not favored and should be issued only when the party seeking the stay demonstrates th at the probability of error in the class certification decision is high enough that the costs of pr essing ahead . . .
exceed the costs of wait ing.” 5 James W. Moore et al., Moore’s Federal Practice § 23.88[2][d] (3d ed. 2021). As Judge Easterbrook, writing for the Seventh Circuit, has explained: Stays should be infrequent and Rule 23(f) “should not unduly retard the pace of litigation.” Blair , 181 F.3d at 835; see also A.A. ex rel. P.A. v. Phillips , No. 19-00770-BAJ-SDJ, 2021 WL 2589180, at *1 (M.D. La. June 24, 2021) (Jackson, J.).
Rule 23(f) also contemplates defere nce to the district court’s stay
decision. The district court’s “action and any explanation of its views should weigh heavily with the court of appeals. ” Fed. R. Civ. P. 23(f) committee’s note to 1998 amendment; 2 see also 6A Federal Procedure, Lawyer’s Edition § 12:478 (2012); 32B Am. Jur. 2d Federal Courts § 1823 (2021). Deference in this context makes sense of the text and history of Rule 23(f), the district court’s knowledge of the record, partie s, and course of litigation, and the inherently limited nature of appellate review.
Accordingly, Rule 23(f) requires de fendants to carry a dual burden. First, defendants must meet the traditional Nken factors for a stay. Nken v.
Holder , 556 U.S. 418, 426 (2009). Second, defendants must carry this burden

2 Committee Notes are “of weight” when in terpreting the Federal Rules of Civil Procedure. Schiavone v. Fortune , 477 U.S. 21, 31 (1986) (quoting Miss. Pub. Corp. v. Murphree , 326 U.S. 438, 444 (1946)); Torres v. Oakland Scavenger Co. , 487 U.S. 312, 316 (1988). Case: 21-40720 Document: 00516141991 Page: 9 Date Filed: 12/22/2021No. 21-40720

10 so convincingly that we are justified not only in granting the full stay, but in disregarding the district cour t’s decision to the contrary.
Defendants have not carried this dual burden. Even assuming that class certification was improper, the na med plaintiffs will be able to pursue their claims on remand. Because discovery—at least on liability—is inevitable, defendants cannot show that they would be irreparably injured in the absence of a total stay. Discovery will occur either way; the only questions are when and ho w much. Defendants have not shown that having to conduct inevitable discovery now, ra ther than later, w ill cause irreparable
harm. See In re Cobalt Int’l Energy, Inc. Secs. Litig. , No. H-14-3428, 2017 WL 3620590, at *4 (S.D. Tex. Aug. 23, 2017 ) (Atlas, J.) (denying a stay pending a Rule 23(f) appeal because “the disc overy will be necessary whether or not the appeal is successful”); see also Sampson v. Murray , 415 U.S. 61, 90 (1974) (“Mere injuries, however substantial, in terms of money, time and energy necessarily expended in the absence of a stay, are not enough [for an irreparable injury.]” (quoting Va. Petroleum Jobbers Ass’n v. Fed. Power
Comm’n , 259 F.2d 921, 925 (D.C. Cir. 1958))); M.D. v. Perry , No. C-11-84, 2011 WL 7047039, at *2 (S.D. Tex. Ju ly 21, 2011) (Jack, J.) (“The prospect of burdensome or expensive discovery al one is not sufficient to demonstrate ‘irreparable injury’ . . . .”). 3
The panel majority identifies three problems with the district court’s partial stay, none of which are convincing. First, it notes that defendants “challenge the plaintiffs’ standing.” Ante at 5. But merely challenging plaintiffs’ standing is not en ough; defendants must make a strong showing that

3 Indeed, defendants appear to assume that pl aintiffs will drop their suits if classcertification is reversed. But there is no basi s for that in the record, and speculation about irreparable harm is not irreparable harm. Case: 21-40720 Document: 00516141991 Page: 10 Date Filed: 12/22/2021No. 21-40720

11 plaintiffs lack standing. Because defendants have not made this showing, they cannot show a strong likelihood of success against the named plaintiffs.
The panel majority’s second and th ird problems are solved by limiting discovery to liability. The panel majori ty observes that the district court’s stay would impose proportionality probl ems if class certification is reversed on appeal. Ante at 5. It further contends that the di strict court’s stay order is
unworkable and will exacerbate th e already-contentious discovery. Ante at 5–
6. Limiting discovery to liability solves both issues. First, defendants’ liability does not vary based on class size . And, as discusse d above, discovery on liability will occur anyw ay because defendants have not shown a strong likelihood of success agai nst the named plaintiffs. Because defendants’ liability will be determined in any event, they have not justified postponing it. Second, liability is a clear and enforceable line. There is hard ly a brighter line than that between damages and liability. We trust district courts to enforce, and parties to respect, li nes much duller than this. 4

As to the final two Nken factors, the panel majority continues to fault plaintiffs for failing to carry a burden that is defend ants’ to bear. Whether plaintiffs have plausibly alleged irrepa rable injury, spoliation of evidence, significant delay, or discovery ma lfeasance is beside the point. The defendants must prove these factors and they fail to do so. Tex. League of United Latin Am. Citizens v. Hughs , 978 F.3d 136, 143 (5th Cir. 2020); Nken , 556 U.S. at

4 To the extent that discovery on liability would vary based on class size under Rule 26(b), the district court is well aware of Rule 26(b)’s proportionality requirement and can enforce it ably on remand. The crux of the panel’s disagreement is the relevant baseline for defendants’ motion to stay all discovery. We must measure defendants’ motion against the baseline of allowing district court pr oceedings to continue. Measured accordingly, defendants have not carried their burden to postpone inevitable discovery. Case: 21-40720 Document: 00516141991 Page: 11 Date Filed: 12/22/2021No. 21-40720

12 433–34. Where discovery on liability is inevitable, its unjustified delay irreparably harms the plaintiffs and upends the public interest.
Simply put, the panel majority gets it exactly backwards. Because some discovery will proceed regardless of cl ass certification, defendants have not shown—as they must—an entitlement to staying all discovery. Nor have they lifted—again, as they must—the “heavy weight” we accord to the district court’s discovery rulings. I wo uld instead limit di scovery to liability and rely upon the very capable district court to manage it while the appeal proceeds. Case: 21-40720 Document: 00516141991 Page: 12 Date Filed: 12/22/2021