983 F.3d 1115
9th Cir.2020Background
- Plaintiff Damian Langere bought Verizon’s extended warranty, sued Verizon in a putative class action alleging consumer-protection violations, and sought class relief.
- Verizon moved to compel arbitration and to stay the district-court proceedings under the Federal Arbitration Act; the district court granted the motion and denied reconsideration.
- Langere, claiming arbitration was economically infeasible, voluntarily dismissed his claims with prejudice under Fed. R. Civ. P. 41(a)(1) (Verizon had not yet answered or moved for summary judgment).
- Langere then appealed the district court’s arbitration order and his own dismissal; Verizon moved to dismiss the appeal for lack of appellate jurisdiction.
- The Ninth Circuit panel concluded Omstead v. Dell (which had allowed appellate jurisdiction after voluntary dismissal) was effectively overruled by the Supreme Court’s Microsoft v. Baker decision and dismissed Langere’s appeal for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a plaintiff's voluntary dismissal with prejudice after a district court orders arbitration creates appellate jurisdiction under 28 U.S.C. § 1291 | Langere: a voluntary dismissal with prejudice converts an interlocutory order (compelling arbitration) into a final appealable order, allowing immediate appeal (per Omstead) | Verizon: voluntary dismissal does not create a final, appealable judgment; FAA and § 16(b)/§1292(b) provide the exclusive discretionary route for interlocutory appeals of arbitration orders | Held: No. Voluntary dismissal with prejudice does not create appellate jurisdiction; appeal dismissed for lack of jurisdiction. |
| Whether Omstead v. Dell remains controlling after Microsoft v. Baker | Langere: Omstead permits review after voluntary dismissal and should govern here | Verizon: Microsoft’s reasoning (preventing plaintiffs from manufacturing appeals by voluntary dismissal) is clearly irreconcilable with Omstead and thus Omstead is effectively overruled | Held: Omstead is effectively overruled by Microsoft; Ninth Circuit abandons Omstead’s rule. |
Key Cases Cited
- Microsoft v. Baker, 137 S. Ct. 1702 (2017) (plaintiffs cannot manufacture final appellate jurisdiction by voluntarily dismissing claims to evade discretionary review regimes)
- Omstead v. Dell, Inc., 594 F.3d 1081 (9th Cir. 2010) (previous Ninth Circuit rule permitting appeal after voluntary dismissal following an order compelling arbitration)
- Johnson v. Consumerinfo.com, Inc., 745 F.3d 1019 (9th Cir. 2014) (§16(b) and §1292(b) provide the sole route for immediate appeal of orders compelling arbitration)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (FAA favors rapid enforcement of arbitration agreements; limits preliminary litigation)
- Keena v. Groupon, Inc., 886 F.3d 360 (4th Cir. 2018) (applying Microsoft to hold plaintiffs cannot create appellate jurisdiction by voluntary dismissal after an arbitration order)
- Dorman v. Charles Schwab Corp., 934 F.3d 1107 (9th Cir. 2019) (illustrating Ninth Circuit practice of treating incompatible Supreme Court reasoning as effectively overruling prior circuit precedent)