Document: 57 L.Ed.2d 351 98 S.Ct. 2454 437 U.S. 463 COOPERS & LYBRAND, Petitioner,v.Cecil LIVESAY and Dorothy Livesay, etc., et al. No. 76-1836. Argued March 22, 1978. Decided June 21, Syllabus Respondents, who had purchased securities in reliance on a prospectus, brought this action behalf of themselves class similarly situated purchasers, alleging that petitioner accounting firm violated the federal laws. The District Court first certified as under Fed.Rule Civ.Proc. 23, then, after further proceedings, decertified class. Respondents then filed notice appeal pursuant to 28 U.S.C. § 1291, which courts appeals have jurisdiction from all "final decisions" district except where direct review may be Supreme Court. After examining amount respondents' claims relation their financial resources probable cost litigation, Appeals concluded they would not pursue individually. On basis "death knell" doctrine (which assumes without incentive possible group recovery individual plaintiff find it economically imprudent his lawsuit final judgment seek appellate an adverse determination), held hear appeal, reversed Court's order decertifying contend denying certification is appealable both "collateral order" exception articulated Cohen v. Beneficial Industrial Loan Corp., 337 541, 69 1221, 93 L.Ed. 1528. Held: 1. does apply prejudgment because such subject revision Court, 23(c)(1); involves considerations are "enmeshed factual legal issues comprising plaintiff's cause action," Mercantile Nat. Bank Langdeau, 371 555, 558, 83 520, 522, 9 523; effective at behest named or intervening members. United Airlines, Inc. McDonald, 432 385, 97 2464, 53 423. Pp. 468-469. 2. Nor support certification. 469-476. (a) formulation appealability rule turns claim plainly legislative, judicial, function. 472-473. (b) alternative approach based thorough study impact fate litigation seriously debilitating effect administration justice. court take evidence, entertain argument, make findings, simply determine whether discretionary determination review, with possibility remand for development. Further rulings other grounds could likewise anticipated. 473-474. (c) Perhaps principal vice authorizes indiscriminate interlocutory trial judge's decisions, circumventing restrictions imposed by Interlocutory Act 1958. 474-475. (d) favors only plaintiffs even though issue will often critically important defendants well. P. 476. (e) Allowing matter right nonfinal orders turn facts particular case thrusts indiscriminately into process, thus defeating vital purpose final-judgment maintaining appropriate relationship between respective courts. 550 F.2d 1106, reversed. Thomas C. Walsh, St. Louis, Mo., petitioner. Melvyn I. Weiss, New York City, respondents. Mr. Justice STEVENS delivered opinion 1 question court's maintained 23 decision" within meaning 12911 therefore right. Because there conflict Circuits over issue,2 we granted certiorari now hold 1291. 2 Petitioner, Coopers Lybrand, statements prospectus issued connection 1972 public offering Punta Gorda Isles aggregate price $18 million. prospectus. In its next annual report shareholders, restated earnings been reported 1970 1971 writing down net income each year $1 Thereafter, respondents sold sustained loss $2,650 investment. 3 purchasers. They alleged defendants3 various sections Securities 1933 Exchange 1934.4 certified, 4 did request certify 1292(b).5 Rather, 1291.6 regarded depend ng decertification sounded action. individually.7 and, merits, Livesay Isles, Inc., 1106. 5 Federal generally depends existence decision "ends merits leaves nothing do but execute judgment." Catlin States, 324 229, 233, 65 631, 633, 89 911.8 An refusing certify, decertifying, own force terminate entire free proceed claim. Such appealable, therefore, if comes rule. rely 1528, adopted several 6 * Cohen, refused stockholder's derivative post security costs required Jersey statute. defendant sought immediate state statute applied suits court. This noted finality requirement "is combine one stages proceeding effectively reviewed corrected when results." Id., 546, S.Ct., 1225. was consistent purpose, ruling "settled conclusively corporation's entitled law require shareholder . [and] concerned collateral judgment."9 7 To come "small class" decisions excepted must disputed question, resolve completely separate action, unreviewable judgment.10 Abney 431 651, 658, 2034, 2039, 52 651; States MacDonald, 435 850, 855, 1547, 1549, 56 18. passing fall category. First, 23(c)(1).11 Second, action." 523.12 Finally, For these reasons, Courts consistently recognized,13 collateral-order applicable kind involved case. II 8 Several Circuits, including case, likely sound litigation.14 determination. Without questioning assumption, relating independently 1291 prior judgment. addressing supports mandatory actions, parties devoted portion argument desirability small-claim Petitioner's opposition part criticism vexatious litigation. hand, argue serves interest special rules necessary ensure judges adequate supervision control. policy arguments, proper legislative consideration, irrelevant decide. 10 There actions extent, Those not, however, contain any unique provisions governing appeals. entered determined same standards govern types Thus, has merit, equally many ordinary litigation—rulings discovery, venue, summary judgment—that tactical economic significance defeat tantamount 11 Though refusal inherently interlocutory, induce abandon survive What disincentives created variety factors.15 Under doctrine, perception believes continue, considered interlocutory; concludes ruling, practical matter, makes improbable, decision. 12 evinces "[r]estricting 'final decisions' prevents judicial caused piecemeal disposition what is, consequence, single controversy." Eisen Carlisle Jacquelin, 417 156, 170, 94 2140, 2149, 40 732. Although rigid insistence tec nical sometimes purposes statute, adherents acknowledge limited category which, nonfinal, appealed undermining policies served general It undisputed allowing run "directly contrary embodied reasons ."16 Yet identify case-by-case those few viewed standpoint prudence, These orders, become 13 administering rule, used two quite different methods identifying ruling. Some comparing arbitrarily selected jurisdictional amount;17 others undertaken before determining jurisdiction. Especially consideration given consequences applying tests pretrial non-class-action becomes apparent neither provides acceptable exercise 14 While Congress grant whose below specific controversy, done so. made "finality" test appealability. prescription, amount-in-controversy necessarily arbitrary measure ignores variables inform litigant's proceed, face ruling.18 Moreover, measured aggregated plaintiffs, joinder counsel rather than order.19 15 slightly less arbitrary, serious admin stration requires class-action build record contains evidence factors deemed relevant findings.20 And inquiry extended members against can easily circumvented joining "only warrant litigation";21 avoid possibility, prove no member purported warrants 16 A threshold may, true, some truly end judgment; enhance quality justice afforded litigants. But incremental benefit outweighed individualized system's overall capacity administer 17 potential waste plain. findings; findings review. inadequate determination, development required.22 finding reviews class-designation assurance process again disrupted adequately represent still refuse ground that, example, common questions fact predominate. theory, since kinds also create risk premature demise, multiple every complex serious. 18 judge. 1958, 1292(b),23 enacted meet recognized need prompt certain orders. However, carefully confined availability Nonfinal never power permit instance, vested appeals.24 party seeking obtain consent screening procedure dual ensuring cases avoiding time-consuming determinations appeals.25 judge certifies 1292(b), appellant "has burden persuading exceptional circumstances justify departure basic postponing until entry Fisons, Ltd. 458 1241, 1248 (CA7 1972). deny reason, docket congestion.26 By permitting fact, "d ath circumvents restrictions.27 19 Additional reinforce our conclusion operates favor issue—whether so, how large should be—will critical importance Certification so increase defendant's damages liability he prudent settle meritorious defense. correctly granting interlocutory. Whatever similarities differences context involve Congress.28 defeats rule—"that goal, absence most compelling o contrary, very much worth preserving."29 20 Accordingly, sufficient reason considering 1291.30 directions dismiss appeal. 21 ordered. "The shall Court." Compare Hackett General Host 455 618 (CA3 1972), cert. denied, 407 925, 92 2460, 32 812; King Kansas City Southern Industries, 479 1259 1973) (holding immediately 1291), Hartmann Scott, 488 1215 (CA8 1973); Ott Speedwriting Pub. Co., 518 1143 (CA6 1975); 370 119 (CA2 1966), 386 1035, 87 1487, 598 1291). defendants, officers directors, petition writ 76-1837. 76-1837, 434 954, 478, 54 312, tentative settlement agreement. petitioners 76-1837 agreed petition; stipulate dismissal petition. view nature settlement, moot. §§ 11, 12(2) 17(b) 1933, 77k, 77l (2), 77q(b) (1976 ed.), 10(b) 1934, 78j(b) ed.). Section 1292(b) provides: "When judge, making civil otherwise section, controlling substantial difference materially advance ultimate termination order. thereupon, discretion, taken order, application ten days order: Provided, That hereunder stay proceedings unless thereof order." petitioned mandamus directing recertify Since accepted jurisdiction, dismissed mandamus. "Plaintiffs, whom employed, yearly gross $26,000. Their total approximately $75,000, $4,000 sum cash. remainder consists equity home investments. "As December 1974 already incurred expenses excess $1,200 lawsuit. Plaintiffs' new estimated $15,000. extensive place Florida, reside. allegations regarding expert testimony trial. "After information record, convinced showing stands. plaintiffs' absorb 'it [takes] great understanding mysteries high finance obvious futility spending thousand dollars get dollars—or less.' Douglas, Protective Committees Railroad Reorganizations, 47 Harv.L.Rev. 565, 567 (1934). We conclude appeal." 1109-1110. unanimous Cobbledick 309 323, 325, 60 540, 84 783, Frankfurter wrote: "Since more grace ingredient justice, beginning has, forbidding set itself enfeebling administration. Thereby avoided obstruction just harassment succession give rise, initiation effective, leaden-footed. Its momentum arrested component elements unified cause." 171, As summarized Cohen: "This appears small finally separable from, to, rights asserted too denied independent deferred whole adjudicated." U.S., Rule involving status "altered amended merits." tentative. "Evaluation entering intimately claims. typicality representative's defenses, adequacy representative, presence aw examples. 23(b)(3) entail greater entanglement ." Wright, A. Miller, E. Cooper, Practice Procedure 3911, p. 485 n. 45 (1976). See, e. g., Williams Mumford, 167 U.S.App.D.C. 125, 511 363 (1975), 423 828, 96 47, 46 46. See n.2, supra. resources; size subjective willingness prosecution claim; share cost; prospect prevailing reversing Korn Franchard 443 1301, 1305 1971). nonappealable $3,000-$8,000 range. Shayne Madison Square Garden, 491 397 1974); supra; Gosa Inv. 449 1330 (CA5 1971); Domaco Venture Capital Fund Teltronics Services, 551 508 1977). Smaller claims, cases. Green Wolf 406 291 1968), 395 977, 2131, 766. 15, clear recovering $3,000 provide sustain corporate $1,000. allows latter former. supra, 295 6, arbitrariness exacerbated settled amount; rather, ad hoc prosecution. Cf. Milberg Western Pacific R. 1301 Hooley Red Carpet 549 643 (CA9 1977); 1975). 645. 22 Jelfo Hickok Mfg. 531 680, 681 1976). 5, 24 rejected notion whenever, appeared unfairness H.R.Rep.No.1667, 85th Cong., 2d Sess., 4-6 (1958); Note, 88 607, 610 (1975). 25 H.R.Rep. 1667, 5-6: "We recognize savings nullified practice indulgent extension amendment inappropriate enforced ill-founded applications problem, procedural screen through desired pass, wastage multitude fruitless invoke purpose. " Requirement Trial double providing Appellate best informed value, once protects dockets flood petitions [A]voidance concern. If consequence change crowded well number unjustified delays benefits expected lost motion preparation, rejection unwarranted benefits." 26 Hearings H.R. 6238 7260 Subcommittee House Committee Judiciary, (1958). 27 heard 1292(b). Lukenas Bryce's Mountain Resort, 538 594 (CA4 1976); Susman Lincoln American 561 86 Samuel University Pittsburgh, 506 355 1974). Judge Friendly noted: "[T]he solution denial designation provided preferable attempts formulate vague rise undesirable concomitant expense delay." Parkinson April 520 650, 660 1975) (concurring opinion). position weigh competing interests courts, consider practicability time expense, weight authorized approve declare modification. responsibility see unauthorized reduction indirect, occurs system. Any disorganize encouraging secure oppose consequent money. choices domain." Baltimore Contractors Bodinger, 348 176, 181-182, 75 249, 252-53, 99 233. 29 F.2d, 654. 30 suggest Gillespie Steel 379 148, 85 308, 199, disagree. Gillespie, upheld marginally disposed unsettled national unquestionably "implemented promote 1292(b)," id., 154, arguable presented thereby none economy achieved were sent back undecided. contrast, tentatively resolved case; above, allowance inconsistent promoted beyond stripped significance.

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