943 F.3d 434
9th Cir.2019Background
- Plaintiffs Melissia Henson and Keith Turner filed a putative class action under RESPA against Fidelity; the district court dismissed most claims and denied class certification for Turner.
- Plaintiffs and Fidelity entered a negotiated stipulation to dismiss the action with prejudice so plaintiffs could immediately appeal the district court’s dismissal and class-certification orders, relying on Ninth Circuit precedent allowing that tactic.
- While the appeals were pending, the Supreme Court decided Microsoft Corp. v. Baker, holding that plaintiffs in putative class actions cannot manufacture a final, appealable judgment simply by stipulating to dismiss with prejudice to appeal a class-cert denial.
- The Ninth Circuit remanded the appeals to the district court for further proceedings; on remand plaintiffs moved under Fed. R. Civ. P. 60(b)(6) to vacate the stipulated dismissal because Microsoft changed the governing law.
- The district court denied Rule 60(b)(6) relief after applying the Phelps factors (developed in the habeas context). The Ninth Circuit panel reversed, holding the denial was an abuse of discretion and directing the district court to grant relief and proceed further.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Phelps v. Alameida factors (developed for habeas cases) apply to Rule 60(b)(6) motions based on an intervening change in law in non-habeas cases | Phelps factors are useful and applicable; district should consider them plus all case-specific equities | Phelps is limited to habeas; district properly limited its inquiry | Many Phelps factors are relevant in non-habeas contexts but courts must consider all circumstances; Phelps is not a rigid checklist |
| Whether Microsoft’s intervening change in law constitutes "extraordinary circumstances" justifying Rule 60(b)(6) relief | Microsoft materially and unfavorably altered the effect of the parties’ stipulation, depriving plaintiffs of appellate review and final relief; equitable relief is warranted | Plaintiffs knowingly risked this outcome by voluntarily dismissing and thus should bear the consequences | Microsoft’s change in law is neutral-to-slightly favorable to plaintiffs; given reliance on settled Ninth Circuit precedent and other equities, it supports vacatur |
| Whether the district court properly weighed Phelps factors (diligence, reliance on finality, delay, relationship of decisions, comity) | District misapplied several factors—particularly reliance and comity—by overvaluing Fidelity’s interest in finality and faulting plaintiffs for relying on circuit precedent | Fidelity argued plaintiffs assumed the risk and the stipulation evidenced intent for finality | The district court abused its discretion: reliance and comity were misanalyzed (reliance favors plaintiffs; comity inapplicable); diligence and delay do not defeat relief; close relation of Microsoft to the dismissal favors relief |
| Appropriate remedy after finding abuse of discretion | Vacatur of the stipulated dismissal to restore parties to status quo so Plaintiffs can pursue merits and appellate review | Treat the dismissal as final and deny relief | Reversed and remanded with directions to grant Rule 60(b)(6) relief and for further proceedings |
Key Cases Cited
- Microsoft Corp. v. Baker, 137 S. Ct. 1702 (U.S. 2017) (plaintiffs cannot convert an interlocutory order into a final appealable judgment by stipulating to dismiss with prejudice to appeal a class-cert denial)
- Phelps v. Alameida, 569 F.3d 1120 (9th Cir. 2009) (articulated multi-factor framework for Rule 60(b)(6) relief based on intervening change in law in habeas context)
- Gonzalez v. Crosby, 545 U.S. 524 (U.S. 2005) (Rule 60(b)(6) requires extraordinary circumstances to reopen final judgments)
- Omstead v. Dell, Inc., 594 F.3d 1081 (9th Cir. 2010) (Ninth Circuit precedent permitting stipulated dismissals to facilitate immediate appeal of certain interlocutory orders)
- Berger v. Home Depot USA, Inc., 741 F.3d 1061 (9th Cir. 2014) (a dismissal with prejudice via stipulation can be an appealable final decision under prior Ninth Circuit law)
- Jones v. Ryan, 733 F.3d 825 (9th Cir. 2013) (interpreting Phelps factors and Rule 60(b)(6) standards)