The Seventh Circuit recently addressed an interesting issue regarding the types of appeals permitted by Rule 23(f).  In Matz v. Household International Tax Reduction Investment Plan, No. 12-8010, 2012 U.S. App. LEXIS 14771 (7th Cir. July 19, 2012), the district court had modified a previously-certified class to eliminate between 57% and 71% of the class membership.  The plaintiff sought leave to appeal this order under Rule 23(f), and the defendant argued that such an order was not appealable.  The rule does not directly answer this question, providing simply that “[a] court of appeals may permit an appeal from an order granting or denying class-action certification . . . .”  The Seventh Circuit held that an order modifying the membership of a certified class is appealable.

The opinion by Judge Posner explained 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.”  Id. at *4.  The court reasoned that where a trial court initially certifies a class that is narrower than proposed by the plaintiff, that order is clearly appealable, so the same result should follow if the trial court achieves that result through two separate orders, one defining a broader class and a second order narrowing the class.  Id. at *4-5.  The court, however, in exercising its discretion chose not to hear the merits of this appeal.

The practice pointer here for class action defense counsel is to be sure to consider whether a Rule 23(f) appeal may be warranted not only if class certification is initially granted, but if a subsequent order modifies the class.