Chantal Attias v. CareFirst, Inc. ( 2020 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 6, 2019 Decided August 11, 2020
No. 19-7020
CHANTAL ATTIAS, INDIVIDUALLY AND ON BEHALF OF ALL
OTHERS SIMILARLY SITUATED, ET AL.,
APPELLANTS
v.
CAREFIRST, INC., DOING BUSINESS AS GROUP
HOSPITALIZATION AND MEDICAL SERVICES, INC., DOING
BUSINESS AS CAREFIRST OF MARYLAND, INC., DOING BUSINESS
AS CAREFIRST BLUECROSS BLUESHIELD, DOING BUSINESS AS
CAREFIRST BLUECHOICE, INC., ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:15-cv-00882)
Matthew Wayne Stonestreet argued the cause for
appellants. With him on the briefs were Jonathan B. Nace,
Christopher T. Nace, and Troy N. Giatras.
Marc Rotenberg and Alan Butler were on the brief for
amicus curiae Electronic Privacy Information Center in
support of appellants.
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Matthew O. Gatewood argued the cause for appellees.
With him on the briefs was Robert D. Owen.
Before: SRINIVASAN, Chief Judge, and GRIFFITH and
KATSAS, Circuit Judges.
Opinion for the Court filed by Circuit Judge KATSAS.
KATSAS, Circuit Judge: After hackers allegedly stole
sensitive customer information from a health insurer’s data
system, seven customers brought a litany of tort, contract, and
statutory claims against the company. The district court
dismissed all claims of five plaintiffs and most claims of two
plaintiffs. We must decide whether the court permissibly
certified the dismissed claims under Federal Rule of Civil
Procedure 54(b), so as to make the dismissal order final and
immediately appealable.
I
The plaintiffs’ complaint alleges the following. CareFirst,
Inc. and its subsidiaries provide health insurance to customers
in the District of Columbia, Maryland, and Virginia. In June
2014, hackers penetrated CareFirst’s servers and stole or
accessed customers’ names, birthdates, e-mail addresses,
subscriber numbers, and possibly social security and credit
card numbers. Seven customers from the District, Maryland,
and Virginia sued CareFirst on behalf of all similarly situated
insureds. The customers collectively raised eleven state-law
claims: five tort claims (negligence, negligence per se, fraud,
constructive fraud, and breach of a duty of confidentiality); two
contract claims (breach and unjust enrichment); and four
statutory claims (D.C., Maryland, and Virginia consumer
protection laws and the D.C. data breach notification statute).
All told, the seven plaintiffs raised fifty-four claims stemming
from the data breach.
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CareFirst moved to dismiss for lack of standing and failure
to state a claim. The district court dismissed the case on
standing grounds, Attias v. CareFirst, Inc., 199 F. Supp. 3d 193
(D.D.C. 2016), but we reversed, 865 F.3d 620 (D.C. Cir. 2017).
On remand, CareFirst renewed its motion to dismiss for
failure to state a claim. The district court granted the motion in
substantial part; it dismissed every claim made by five of the
seven plaintiffs and all but two claims made by the two other
plaintiffs, Curt and Connie Tringler of Maryland. Attias v.
CareFirst, Inc., 365 F. Supp. 3d 1 (D.D.C. 2019). First, the
court held that state law required actual damages for nine of the
eleven claims (all but the unjust enrichment and D.C. consumer
protection claims). Id. at 9–11. Because only the Tringlers
alleged actual damages, the court dismissed the relevant nine
claims of the other five plaintiffs. Id. at 17. The court also
dismissed the unjust enrichment claims for failure to plead a
necessary element. Id. at 25. Finally, it dismissed the tort
claims and the D.C. consumer protection claims as duplicative
of the breach-of-contract claims. Id. at 17–26. In sum, the
court dismissed every claim except the Tringlers’ claims for
breach of contract and for violation of the Maryland consumer
protection statute. Id. at 27.
The district court directed the parties “to advise the court
of whether it should issue an order under Federal Rule of Civil
Procedure 54(b) as opposed to certifying questions for
interlocutory appeal under 28 U.S.C. § 1292(b).” J.A. 14.
With no explanation, the parties agreed that Rule 54(b) was the
better route for generating an appealable order. The plaintiffs
also moved to stay the Tringlers’ surviving claims during any
appeal. They explained that this Court’s “ultimate ruling will
substantially impact the progress of those claims.” Resp. to
Feb. 14, 2019 Min. Order & Mot. for Stay of Remaining
Claims, ECF No. 59, at 1.
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In a brief order, the district court entered final judgment on
all the dismissed claims under Rule 54(b). Tracking the Rule’s
language, the court expressly found “‘no just reason for delay’
of entry of final judgment.” J.A. 158. But the court provided
no reasoning for its conclusion, and it stayed the case pending
resolution of this appeal.
In this Court, neither party questioned the validity of the
Rule 54(b) certification, but we ordered the parties to address
the issue at oral argument and in supplemental briefs.
II
Under Article III of the Constitution, the “judicial Power
of the United States” is limited to resolving specified categories
of “Cases” or “Controversies.” U.S. Const. art. III, §§ 1 & 2.
Moreover, as an “inferior” court created by statute, id. § 1, this
Court “can have no jurisdiction but such as the statute confers,”
Sheldon v. Sill, 49 U.S. 441, 449 (1850). Before passing on the
merits of any dispute, we must therefore determine whether we
have both Article III and statutory jurisdiction. Steel Co. v.
Citizens for a Better Env’t, 523 U.S. 83, 94–96 (1998). And
we must raise those issues ourselves, even if no party has done
so. Id. at 94.
For review of district-court decisions, our statutory
jurisdiction comes primarily from 28 U.S.C. § 1291. That
section gives the courts of appeals “jurisdiction of appeals from
all final decisions of the district courts of the United States,”
except those directly appealable to the Supreme Court. A
“final decision” under section 1291 ordinarily must resolve
every claim of every party in a case. Ritzen Grp., Inc. v.
Jackson Masonry, LLC, 140 S. Ct. 582, 586 (2020); Sears,
Roebuck & Co. v. Mackey, 351 U.S. 427, 431–32 (1956).
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Federal Rule of Civil Procedure 54(b) builds on that
baseline principle. The adoption of the Federal Rules of Civil
Procedure increased the opportunity for litigants to join
multiple claims and parties in one lawsuit. See Sears, 351 U.S.
at 432. To complement that change, Rule 54(b) offered the
chance for earlier appellate review of some claims in a multi-
claim or multi-party action. See id. at 433–34. The Rule “does
not relax the finality required of each decision” by
section 1291. Id. at 435. But it “provide[s] a practical means
of permitting an appeal to be taken from one or more final
decisions on individual claims, in multiple claims actions,
without waiting for final decisions to be rendered on all the
claims in the case.” Id.; accord Cold Metal Process Co. v.
United Eng’g & Foundry Co., 351 U.S. 445, 453 (1956).
Rule 54(b) provides:
When an action presents more than one claim
for relief—whether as a claim, counterclaim,
crossclaim, or third-party claim—or when
multiple parties are involved, the court may
direct entry of a final judgment as to one or
more, but fewer than all, claims or parties only
if the court expressly determines that there is no
just reason for delay. Otherwise, any order or
other decision, however designated, that
adjudicates fewer than all the claims or the
rights and liabilities of fewer than all the parties
does not end the action as to any of the claims
or parties and may be revised at any time before
the entry of a judgment adjudicating all the
claims and all the parties’ rights and liabilities.
The Rule establishes three requirements for an otherwise
interlocutory order to be certified as a final judgment: (1) the
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order must resolve a distinct “claim for relief”; (2) the order
must be “final” with respect to that claim; and (3) the district
court must permissibly determine that there is “no just reason
for delay” in entering judgment. See Bldg. Indus. Ass’n of
Superior Cal. v. Babbitt, 161 F.3d 740, 743 (D.C. Cir. 1998).
The first two elements—whether the district court finally
resolved one or more distinct claims for relief—plainly
implicate our jurisdiction. An interlocutory order that does not
resolve a distinct “claim for relief” is not a “decision” in the
sense required by section 1291. See Swint v. Chambers Cnty.
Comm’n, 514 U.S. 35, 41–42 (1995). And if a disposition is
not “final” under Rule 54(b), then it likewise cannot qualify as
a “final decision” under section 1291. See Sears, 351 U.S. at
437. Thus, if a district court certifies a matter that does not
involve the “final” disposition of an entire “claim,” we must
raise the problem ourselves and must dismiss “for want of a
final judgment.” Tolson v. United States, 732 F.2d 998, 1001–
03 (D.C. Cir. 1984).
The third element—whether the district court permissibly
found that there is “no just reason for delay” of an appeal—has
two components. First, the court must expressly determine that
there is no just reason for delay. This is a “bright-line
requirement” for establishing appellate jurisdiction on a Rule
54(b) certification. Bldg. Indus. Ass’n, 161 F.3d at 743.
Second, we must decide whether the district court’s
determination was an abuse of discretion. See Curtiss-Wright
Corp. v. Gen. Elec. Co., 446 U.S. 1, 10 (1980). To do that, we
assess whether the district court reasonably considered the
“judicial administrative interests as well as the equities
involved,” including the relationship between the certified and
uncertified claims and the potential for multiple appeals on the
same issues. Id. at 8; see Bldg. Indus. Ass’n, 161 F.3d at 744–
45. If the district court failed to explain why it found “no just
7
reason for delay,” we must “do the best we can” to discern its
reasoning. See Bldg. Indus. Ass’n, 161 F.3d at 745. And we
must dismiss the appeal if we conclude that the district court
unreasonably weighed the relevant equities, Brooks v. Dist.
Hosp. Partners, 606 F.3d 800, 806 (D.C. Cir. 2006), or if we
cannot discern whether it reasonably did so, Bldg. Indus. Ass’n,
161 F.3d at 745.
The permissibility of a Rule 54(b) certification depends in
significant part on the relationship between the certified claims
finally resolved by the district court and the uncertified claims
that remain pending before it. In Tolson, we addressed when
different claims are distinct enough to justify the entry of final
judgment on only some of them. We established this “rule of
thumb” on that question: “When alleged claims are so closely
related that they would fall afoul of the rule against splitting
claims if brought separately, they do not qualify as ‘separate’
claims within the meaning of Rule 54(b).” 732 F.2d at 1001
(cleaned up). We then applied that principle to dismiss an
appeal from an order resolving one of three transactionally
related negligence claims. See id. at 1002–03.
III
Under this framework, we lack appellate jurisdiction over
the certified claims of the Tringlers and of the other plaintiffs.
Start with the Tringlers’ claims. The Tringlers raise
contract, tort, and statutory claims arising out of the same
event—the June 2014 cyberattack on CareFirst. Their pending
breach of contract and Maryland consumer protection claims
arise from the same transaction and occurrence as their
dismissed tort and unjust enrichment claims. Under basic
principles of claim preclusion, the Tringlers could not have
litigated to judgment one action involving the claims still
pending before the district court and another involving the
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claims already dismissed. See, e.g., Taylor v. Sturgell, 553
U.S. 880, 892 (2008); Smith v. Jenkins, 562 A.2d 610, 613
(D.C. 1989); Restatement (Second) of Judgments § 24 (Am.
Law Inst., 1982). So under Tolson, they likewise cannot sever
the latter claims for an immediate appeal under Rule 54(b). See
732 F.2d at 1002.
That leaves us with the other plaintiffs’ claims. Tolson
does not resolve whether the district court could have certified
their claims despite the pendency of certain claims by the
Tringlers. For purposes of claim preclusion, different plaintiffs
may litigate parallel claims in different lawsuits. See, e.g.,
Smith, 562 A.2d at 613; 18 C. Wright & A. Miller, Federal
Practice & Procedure § 4406 (3d ed. 2017). Nonetheless, any
such certification would raise concerns, for the claims of any
one plaintiff in this case overlap substantially with the claims
of every other plaintiff. The claims of each plaintiff arise from
the same computer hacking and data breach. They involve the
same form contracts used by CareFirst. They involve the same
alleged misrepresentations made by the company on the
internet and in its promises to comply with federal privacy law.
And, given the parties’ decision to litigate the common-law
claims under D.C. law, they involve almost entirely the same
governing law. All of this explains why the plaintiffs seek class
certification under Federal Rule of Civil Procedure 23(b)(3),
which requires “common” questions to predominate over
“individual” ones. It also explains why the plaintiffs moved to
stay the claims pending in the district court on the ground that
our disposition of the appeal would “substantially impact the
progress of those claims.” ECF No. 59, at 1. This suggests that
a Rule 54(b) certification would generate “piecemeal appeals”
in a case that “should be reviewed only as [a] single unit[].”
Curtiss-Wright Corp., 446 U.S. at 10.
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In any event, we need not decide whether the district court
could have certified the non-Tringler claims alone, because we
lack jurisdiction over them for a separate reason: It is unclear
whether the district court would have certified these claims for
immediate appeal had it properly declined to certify the claims
of the Tringlers. The district certified a very different subset of
claims—all claims minus the two pending Tringler claims—
and it failed to explain its reasons for doing so. We are thus
left much as we were in Building Industry Association: We
confront certified claims that appear highly “intertwined” with
claims still pending below (and with other dismissed claims
that cannot be certified). 161 F.3d at 745. And we have no
“assistance” in the form of an explanation from the district
court. See id. As a result, we cannot determine whether the
district court would have certified only the non-Tringler
claims, much less whether it could have come up with a
permissible justification for doing so. As in Building Industry
Association, we must therefore dismiss the appeal for lack of
jurisdiction.
So ordered.