Matz v. Household International Tax Reduction Investment Plan

In the

United States Court of Appeals
For the Seventh Circuit

No. 12-8010

R OBERT J. M ATZ, individually and on behalf of
all others similarly situated,

Petitioner/Cross-Respondent,
v.

H OUSEHOLD INTERNATIONAL T AX R EDUCTION
INVESTMENT P LAN,
Respondent/Cross-Petitioner.

Petition and Cross-Petition for Leave to Appeal
from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 96 C 1095—Joan B. Gottschall, Judge.

S UBMITTED M AY 4, 2012—D ECIDED JULY 19, 2012

Before P OSNER, R IPPLE, and W OOD , Circuit Judges.
P OSNER, Circuit Judge. The plaintiff in this long-running
class action suit under ERISA asks us for leave to appeal
under Fed. R. Civ. P. 23(f) from an order by the district
court partially decertifying the class by eliminating some
3000 to 3500 members—a reduction of between 57 and
2 No. 12-8010

71 percent of the membership (we are not given data
that would permit a more precise estimation). The defen-
dant has cross-petitioned for leave to appeal; it wants
to argue that the entire class should have been decertified;
but its appeal is untimely and is therefore dismissed.
The defendant questions our authority to entertain
the plaintiff’s petition. Rule 23(f) authorizes a court of
appeals to “permit an appeal from an order granting or
denying class-action certification.” The rule doesn’t
mention modifications of the scope of a previously
certified class. The committee note to the 1998 amendment
that added subsection (f) to Rule 23, after stating that
“appeal from an order granting or denying class certif-
ication is permitted in the sole discretion of the court
of appeals,” adds that “no other type of Rule 23 order
is covered by this provision”—but then fogs the issue by
stating that the rule confers on the court of appeals “a
discretionary power to grant interlocutory review in
cases that show appeal-worthy certification issues.”
We cannot find a case that discusses whether the modifi-
cation of an order certifying a class is appealable under
the rule. But our decision in Gary v. Sheahan, 188 F.3d
891, 893 (7th Cir. 1999) (citations omitted), hints at
an affirmative answer. We said that “if in response to
a belated motion for reconsideration [of an order cer-
tifying or refusing to certify a class] the judge ma-
terially alters the decision, then the party aggrieved by
the alteration may appeal within the normal time. Thus,
had the district judge granted defendant’s motion and
decertified the class, plaintiffs would have had ten [now
No. 12-8010 3

14] days under Rule 23(f) to seek permission to appeal.
Instead, however, the judge denied the motion and left
the class definition in place.” But the order sought to
be appealed from in that case denied decertification
rather than, as in this case, granting it in part.
Citing Gary and amplifying its hint, the Tenth Circuit
in Carpenter v. Boeing Co., 456 F.3d 1183, 1191 (10th Cir.
2006), said that “an order that leaves class-action status
unchanged from what was determined by a prior order
is not an order ‘granting or denying class action certif-
ication.’ Of course, when the district court accepts a
suggestion and the certification decision is changed, the
new order, to the extent it modifies the prior order, is indeed
such an order and an interlocutory appeal under Rule 23(f) is
permitted” (emphasis added). Finally, several opinions
imply that an order granting reconsideration of, or al-
lowing an amendment to, an order granting or denying
certification is appealable under Rule 23(f) if it changes
the “status quo.” See Fleischman v. Albany Medical Center,
639 F.3d 28, 31-32 (2d Cir. 2011) (per curiam), and cases
cited there. But it is unclear whether the courts in those
cases would consider a change short of reversing the
previous order a change in the status quo.
We think, borrowing the language of the Gary case, that
an order materially altering a previous order granting or
denying class certification is within the scope of Rule 23(f)
even if it doesn’t alter the previous order to the extent of
changing a grant into a denial or a denial into a grant.
This is best seen by imagining that rather than altering
a class that the court had already certified the district
4 No. 12-8010

judge had at the outset certified a narrower class than
proposed by the plaintiff. That order would have been
appealable by either party, or so at least the cases assume,
see Kartman v. State Farm Mutual Automobile Ins. Co., 634
F.3d 883, 888 (7th Cir. 2011); Jefferson v. Ingersoll Int’l Inc.,
195 F.3d 894, 896-97 (7th Cir. 1999); Hohider v. United
Parcel Service, Inc., 574 F.3d 169, 174-75 (3d Cir. 2009);
Lozano v. AT & T Wireless Services, Inc., 504 F.3d 718, 721
(9th Cir. 2007); Gunnells v. Healthplan Services, Inc., 348
F.3d 417, 423 (4th Cir. 2003); Parker v. Time Warner Enter-
tainment Co., L.P., 331 F.3d 13, 17-18 (2d Cir. 2003), albeit
without discussion of the issue—yet the assumption
seems obviously correct. We don’t see why it should
make a difference that the order modifying the class
requested by the plaintiff came later. The difference is
between one order and two orders that accomplish the
same thing.
Although we thus have jurisdiction over the plaintiff’s
petition for leave to appeal, his challenge to the judge’s
ruling altering the class—the challenge that he asks us
to address by allowing the appeal—does not satisfy the
criteria for a Rule 23(f) appeal. The petition is therefore
D ENIED.

7-19-12