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Coopers & Lybrand v. Livesay

Supreme Court of the United States

March 22, 1978, Argued ; June 21, 1978, Decided

No. 76-1836


 [*464]   [***355]   [**2456]  MR. JUSTICE STEVENS delivered the opinion of the Court.

 The question in this case is whether a district court's determination that an action may not be maintained as a class action pursuant to Fed. Rule Civ. Proc. 23 is a "final decision"  [*465]  within the meaning of 28 U. S. C. § 1291 [****5] 1 and therefore appealable as a matter of right. Because there is a conflict in the Circuits over this issue, 2 we granted certiorari and now hold that such an order is not appealable under § 1291.

 [****6]  Petitioner, Coopers & Lybrand, is an accounting firm that certified the financial statements in a prospectus  [***356]  issued in connection with a 1972 public offering of securities in Punta Gorda Isles for an aggregate price of over $ 18 million. Respondents purchased securities in reliance on that prospectus. In its next annual report to shareholders, Punta Gorda restated the earnings that had been reported in the prospectus for 1970 and 1971 by writing down its net income for each year by over $ 1 million. Thereafter, respondents sold their Punta Gorda securities and sustained a loss of $ 2,650 on their investment.

 Respondents filed this action on behalf of themselves and a class of similarly situated purchasers. They alleged that petitioner and other defendants 3 [****7]  had violated various sections of  [*466]  the Securities Act of 1933 and the Securities Exchange Act of 1934. 4 The District Court first certified, and then, after further proceedings, decertified the class.

Respondents did not request the District Court to certify its order for interlocutory review under 28 U. S. C. § 1292 (b). 5 [****8]  Rather,  [**2457]  they filed a notice of appeal pursuant to § 1291. 6 The Court of Appeals regarded its appellate jurisdiction as depending on whether the decertification order had sounded the "death knell" of the action.  After examining the amount of respondents' claims in relation to their financial resources and the probable cost of the litigation, the court concluded that they would not pursue their claims individually. 7 The Court  [*467]  of Appeals therefore held that it had  [***357]  jurisdiction to hear the appeal and, on the merits, reversed the order decertifying the class. Livesay v. Punta Gorda Isles, Inc., 550 F.2d 1106.

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437 U.S. 463 *; 98 S. Ct. 2454 **; 57 L. Ed. 2d 351 ***; 1978 U.S. LEXIS 117 ****; Fed. Sec. L. Rep. (CCH) P96,475; 25 Fed. R. Serv. 2d (Callaghan) 565



Disposition:  550 F.2d 1106, reversed.


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Civil Procedure, Appeals, Appellate Jurisdiction, Final Judgment Rule, Interlocutory Orders, Special Proceedings, Class Actions, Certification of Classes, Judicial Discretion, Prerequisites for Class Action, General Overview, Typicality, Summary Judgment Review, Appealability, Preliminary Considerations, Venue, Collateral Order Doctrine