Ninth Circuit: No Appeal from Order Denying Issuance of Notice of FLSA Collective Action

The collateral order exception to the final judgment rule allows a circuit court to exercise its jurisdiction, even in the absence of an appealable final judgment, if the order appealed from meets certain prerequisites.  Providing a good lesson in the Ninth Circuit’s application of the exception is today’s opinion in McElmurry v. U.S. Bank Nat’l Assoc., case no. 05-36407 (August 8, 2007), in which the plaintiffs, seeking unpaid overtime pay, appealed from an order denying their motion to issue notice of a collective action under the FLSA.

The Ninth Circuit explains the prerequisites for application of the exception (citations omitted):

Jurisdiction exists in only a “small class” of cases that are deemed “too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.”  To qualify as a collateral order suitable for appellate review, an order must: 1) “conclusively determine the disputed question”; 2) “resolve an important issue completely separate from the merits of the action”; and 3) “be effectively unreviewable on appeal from a final judgment.”

The court finds that the order denying the motion to issue a notice of collective action would not be “unreviewable on appeal.”  This standard is met only where “the legal and practical value of [the right at stake will] be destroyed if [ ] not vindicated before trial.”  (Citations omitted.)  The court rejects plaintiffs’ claims that some employees may lose their chance to litigate:

Appellants argue that the statute of limitations will continue to run, and that some employees may lose their opportunity to participate in a collective action if they wait until after an appeal from final judgment. Although employees who may be similarly situated but have not opted in to the action are not bound by its conclusion, and may pursue their actions individually, [citation], we understand Appellants’ concern. However, these arguments have been made in the context of class action suits as well, and it is well established that there is no collateral order jurisdiction over a district court decision to certify or not to certify a class action under Rule 23.  [Citations.]  Although, as we have pointed out, there are differences between a collective action brought pursuant to § 216(b) and a class action brought under Rule 23, those differences are not relevant to whether we may exercise collateral order jurisdiction.

Another interesting point about the case is that the plaintiffs filed an appeal and a writ petition — a practical tactic when the appealability of the order is in doubt.  Here, however, it doesn’t pay off.  The same factors that defeat appellate jurisdiction also defeat the writ petition.