Court Opinion

ID: 4258575
Source: CourtListenerOpinion
Date Created: 2018-03-27 19:00:20.636016+00
Date Added: 2024-06-11T14:28:25.533005
License: Public Domain

PUBLISHED

                      UNITED STATES COURT OF APPEALS
                          FOR THE FOURTH CIRCUIT

                                      No. 16-1873

ERIN KEENA, for herself and all others similarly situated,

                    Plaintiff – Appellant,

             v.

GROUPON, INC., a Delaware Corporation,

                    Defendant – Appellee.

Appeal from the United States District Court for the Western District of North Carolina,
at Charlotte. Graham C. Mullen, Senior District Judge. (3:15-cv-00520-GCM)

Argued: January 24, 2018                                      Decided: March 27, 2018

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.

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.
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

                                           2
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

       1
         Keena’s motion to amend sought permission for an interlocutory appeal from the
Arbitration Order pursuant to the “collateral order doctrine.” The district court correctly
recognized that doctrine as inapplicable, and was aware that an interlocutory appeal could
only be taken from an order “granting a stay of [an arbitration] action” pursuant to 28
U.S.C. § 1292(b). See 9 U.S.C. § 16(b)(1). The court thus evaluated Keena’s request for
an interlocutory appeal under § 1292(b).

                                             3
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.

                                               4
       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 Microsoft Corp. v. Baker, 797 F.3d 607 (9th Cir. 2015), cert.

granted, 84 U.S.L.W. 3214 (U.S. Jan. 15, 2016) (No. 15-457). 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

                                             5
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, 137

S. Ct. 1703 (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.

                                              6
       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, 137 S. Ct. 1703, 1712-15 (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 (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 of appeals’ denial of a Rule

       2
          Of note, Keena contends that she did not really dismiss her complaint
voluntarily. Instead, she simply asked the district court, in the alternative, to amend its
Arbitration Order to include a dismissal with prejudice. This is a distinction without a
difference. On this record, Keena sought a dismissal with prejudice and her dismissal
request was granted.

                                            7
23(f) petition and voluntarily dismiss his complaint in the district court with prejudice in

order to manufacture an immediate § 1291 final order appeal. See Microsoft 137 S. Ct. at

1714. Justice Ginsburg rejected Baker’s effort to sidestep the “careful calibration” of

Rule 23(f), explaining that plaintiffs in “putative class actions cannot transform a

tentative interlocutory order into a final judgment within the meaning of § 1291 simply

by dismissing their claims with prejudice.” Id. at 1714-15.

       In this situation, Keena also seeks to transform an otherwise interlocutory order

into a § 1291 final decision. Under the arbitration statutes, a party seeking to appeal an

order staying the action and compelling arbitration must first secure permission from both

the district court and the court of appeals under 28 U.S.C. § 1292(b). See 9 U.S.C.

§ 16(b)(1), (3).   Keena unsuccessfully sought the district court’s certification of an

interlocutory appeal. Then, in another creative “voluntary-dismissal tactic,” Keena’s

lawyer sought to preempt the denial of interlocutory review by voluntarily dismissing

Keena’s complaint with prejudice.       As Microsoft emphasizes, however, the final-

judgment rule will not tolerate that effort. To appeal from the Arbitration Order, Keena

was obliged to participate in the arbitration proceedings and then secure a final judgment.

In that circumstance, “§ 1291’s firm final-judgment rule” would have been satisfied. See

Microsoft, 137 S. Ct. at 1715.

       Keena’s voluntary-dismissal tactic also fails to account for the longstanding

principle that a party is not entitled to appeal from a consensual dismissal of her claims.

See, e.g., Evans v. Phillips, 17 U.S. 73, 73 (1819) (dismissing writ of error on ground that

plaintiff had “submitted to a nonsuit in the circuit court”); United States v. Babbitt, 104

                                             8
U.S. 767, 768 (1881) (explaining that “consent to the judgment below” waived right to

appeal). Put succinctly, in seeking to create final order § 1291 jurisdiction, Keena has,

like the plaintiff in Microsoft, pursued her own version of the voluntary-dismissal tactic

that the Supreme Court soundly repudiated. Our approval of such a tactic — by agreeing

that final order § 1291 jurisdiction is present here — would thus contravene Microsoft

and the long-settled principle that, in the wise words of our former Chief Judge John J.

Parker, “no appeal lies from a judgment of voluntary nonsuit.” See Kelly v. Great Atl. &

Pac. Tea Co., 86 F.2d 296, 297 (4th Cir. 1936).

                                             C.

       Finally, Keena maintains that we should recognize appellate jurisdiction under

Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79 (2000). In that case, plaintiff

Randolph, as a borrower, sued his lender Green Tree. Id. at 83. Green Tree moved to

compel arbitration and stay the proceedings or, in the alternative, to dismiss the

complaint. Id. The district court agreed to compel arbitration, declined to stay the

litigation, and dismissed Randolph’s complaint with prejudice. Id. The Supreme Court

granted certiorari to address whether “an order compelling arbitration and dismissing a

party’s underlying claims is a ‘final decision with respect to an arbitration’ . . . and thus

. . . immediately appealable.” Id. at 82. The Court ruled that the district court’s dismissal

of Randolph’s complaint with prejudice on Green Tree’s motion was an appealable final

order under § 1291. Id. at 85-89. By an important qualifying footnote, however, the

Court explained that “[h]ad the District Court entered a stay instead of a dismissal in this

case, that order would not be appealable.” Id. at 87 n.2.

                                             9
      Keena’s effort to appeal in this case is readily distinguishable from Green Tree.

First, the district court’s Arbitration Order directed Keena and Groupon to arbitrate and

stayed the proceedings. Second, Keena’s complaint was dismissed with prejudice after

she voluntarily sought the dismissal. In the Green Tree case, on the other hand, the

defendant Green Tree — not the plaintiff Randolph — had sought the dismissal. The

Green Tree decision thus does not present or address the propriety of the voluntary-

dismissal tactic employed by Keena and that the Supreme Court squarely rejected in

Microsoft.

                                          III.

      In these circumstances, the Dismissal Order secured by Keena is not an appealable

final decision under 28 U.S.C. § 1291. Appellate jurisdiction is therefore lacking and

Keena’s appeal must be dismissed.

                                                                            DISMISSED

                                           10