Plaintiffs Run Out 150-Day Fail Safe Limit Under Fed. R. Civ. P. 58(c) to Appeal From MDL, Holds Seventh Circuit

In Bell v. Albertson Cos., Inc., No. 19-2581 (7th Cir. Dec. 7, 2020), a two-judge panel of the Seventh Circuit (after Judge Barrett’s elevation to the Supreme Court) reverses the district court’s dismissal of unfair business practice claims, but holds that two of the appeals are time-barred under Fed. R. Civ. P 58(c) and Fed. R. App. P. 4(a)(7).

The case challenged a label that advertised a grocery product as “100% Grated Parmesan Cheese,” despite that “these products are not 100 percent cheese, but rather contain between four and nine percent added cellulose powder and potassium sorbate, as is evident to a consumer who takes the time to read the fine print of an ingredient list on the back of the package …. The Judicial Panel on Multidistrict Litigation transferred numerous similar actions to the Northern District of Illinois for consolidated pretrial proceedings under 28 U.S.C. § 1407.”

The district court dismissed “the plaintiffs’ deceptive labeling claims (‘the 100% claims’) with prejudice for failure to state a claim …. First, the court found that the prominent ‘100%’ claims on the front labels are ambiguous and that a consumer who seeks clarity can find it by reading the ingredient list on the back label. Second, the court found that common sense would tell a reasonable consumer that, despite the 100% claims, these cheese products must contain added ingredients because they are sold unrefrigerated in the main grocery aisles, alongside dried pastas and canned sauces.”

The Seventh Circuit reverses on the merits of three of the complaints (those against Kraft Heinz Co., Albertsons Co., Albertsons LLC, SuperValu Inc., Wal-Mart Stores, Inc. and ICCO-Cheese Co.). The panel holds that the complaints made plausible allegations that the “100%” label could mislead reasonable consumers and that “[h]ow reasonable consumers actually understand defendants’ ‘100% Grated Parmesan Cheese’ labels is a question of fact that cannot be resolved on the pleadings.”

Nevertheless, the panel holds that it “lack[s] appellate jurisdiction to review the district court’s dismissal of the 100% claims in two of the plaintiffs’ consolidated complaints (against Publix and Target/ICCO) because the appeals were filed too late.” The difference between these two complaints and the three that were remanded was that the latter were not fully dismissed. Other deception claims concerning those products “remain pending in the district court in those cases, but the district court invoked Federal Rule of Civil Procedure 54(b) to enter partial final judgments on those claims on the ground that there was no just reason for delay” appeal of the 100% claims.

But for the two complaints against Publix and Target, the order “effectively resolved all claims asserted in those two consolidated complaints” and “did not expressly grant leave to amend. Most important, it said Publix and Target/ICCO were ‘dismissed from this litigation’ …. The order therefore qualified under Rule 54(a) as a judgment in these two cases, and separate Rule 58(a) judgments should have been entered at that time.” Because no separate judgments were entered, entry of judgment is thus determined under the 150-day provision of Fed. R. Civ. P. 58(c) and Fed. R. App. P. 4(a)(7). That period ran long before the plaintiff filed notices of appeal.

The panel rejects two other arguments for rescuing appellate jurisdiction.

First, plaintiffs argued that a motion to amend that they filed tolled the limitations period. The panel holds that only Rule 59 and 60 motions toll under Fed. R. App. P. 4(a)(4)(A)(iv–vi), while “plaintiffs filed their motion under Rule 15(b), and the district court did not hold it was anything different, so it could not stop the clock.”

Second, “[p]laintiffs argue that we should not enforce the 150-day provision because defendants waived their right to insist on it …. There was no waiver here. As soon as plaintiffs filed their Rule 15(b) motion to amend in November 2018, Publix and Target/ICCO signaled their opposition and their view that the court’s November 1, 2018 order amounted to a final judgment in their cases. At that point, defendants teed up the uncertainty posed by the ‘dismissed from this litigation’ term of that order and the court’s failure to enter separate judgments. Any party or the court could have acted promptly—long before the 150 days had run—to clarify the situation, but no one did. Sophisticated counsel on both sides apparently preferred to live with, and perhaps even to gamble on, the uncertainty.”

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