When a class certification decision overlaps with merits issues, can a court of appeals deciding an interlocutory appeal from a class certification order also review an earlier decision on a motion to dismiss if it was integral to the class certification order? Yes, according to a new Fourth Circuit decision.

Elegant Massage, LLC v. State Farm Mutual Automobile Insurance Company, No. 22-1853, – F.4th –, 2024 WL 995480 (4th Cir. Mar. 8, 2024), is one of many cases brought against property insurers seeking coverage for business income losses arising from the COVID-19 pandemic. With near unanimity, these lawsuits have been dismissed on Rule 12 motions and almost all those dismissals have been affirmed on appeal. But here the district court denied a motion to dismiss and declined to certify that ruling for interlocutory appeal under 28 U.S.C. § 1292(b). It later certified a class of the defendant’s commercial property insurance policyholders in Virginia that were affected by COVID-19 government orders and whose insurance claims were denied. The Fourth Circuit granted the insurer permission to appeal the class certification order under Rule 23(f).

When the case reached the Fourth Circuit, that court had previously affirmed the dismissal of a similar case under West Virginia law. The insurer asked the Fourth Circuit to review the earlier ruling on its motion to dismiss in addition to the class certification order. The Fourth Circuit majority held that it could review the motion to dismiss decision under its pendent appellate jurisdiction. Under that circuit’s jurisprudence, it can exercise pendent appellate jurisdiction if the rulings are ”so interconnected” that “either (1) an issue is inextricably intertwined with a question that is the proper subject of an immediate appeal, or (2) review of a jurisdictionally sufficient issue is necessary to ensure meaningful review of an immediately appealable issue.” (Cleaned up.) The second of those two alternative prongs applied here.  The district court’s ruling on the motion to dismiss was relied upon in its class certification decision, and “was integral to the district court’s later conclusion that the class members could prove their claims through evidence common to the class.” Because the court of appeals could not “meaningfully review the class certification order” while ignoring its own recent decision on the insurance coverage issues that were the subject of the motion to dismiss ruling, pendent appellate jurisdiction was appropriate. The Fourth Circuit then applied its recent decision on the merits issues, finding Virginia law functionally the same as West Virginia law. It therefore reversed both the motion to dismiss and class certification orders, remanding with direction to dismiss the entire case.

Judge Wynn concurred in the reversal of the class certification order, but otherwise dissented. He disagreed with the majority’s finding of pendent appellate jurisdiction, concluding that such jurisdiction should be exercised only in “exceedingly rare circumstances.” He would have reversed the class certification order because, even assuming the district court correctly found the possibility of coverage for the claimed losses, this “would require an individual review of each denied claim to determine whether the loss of business income claimed was due to the [COVID-19] executive orders or to another cause.” He noted that the named plaintiff had “business troubles [that] long predated COVID-19” and had closed before the government orders took effect.  His opinion suggests that he would exercise pendent appellate jurisdiction in this procedural posture only if it would be “impossible” to review the class certification order without reviewing a motion to dismiss decision. He expressed concerns that the majority opinion might unduly open the door to defendants seeking review of merits issues on class certification appeals.

The majority’s opinion puts the Fourth Circuit in line with other circuits. Often courts of appeals have ruled on a merits issue simply because it formed part of the analysis of the class certification issues, without finding it necessary to rely on pendent appellate jurisdiction. See, e.g., Van v. LLR, Inc., 61 F.4th 1053, 1065 (9th Cir. 2023); In re State Farm Fire & Cas. Co., 872 F.3d 567, 572-73 (8th Cir. 2017); Regents of the Univ. of Cal. v. Credit Suisse First Boston, 482 F.3d 372, 381 (5th Cir. 2007).

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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.