(CN) - The Supreme Court heard oral arguments Tuesday on whether parties in a multidistrict antitrust case have the right to immediately appeal the dismissal of their claims even as the broader case goes on.
Ellen Gelboim and Linda Zacher sued Bank of America, Credit Suisse Group and others for allegedly manipulating the London Interbank Offered Rate (LIBOR).
Loosely defined, LIBOR is an estimate, promulgated by the leading banks in London, of the interest rate one bank should pay when borrowing from others.
The plaintiffs describe it as nothing less than the "most important benchmark for short-term interest rates in the United States and around the world."
"LIBOR ostensibly identifies banks' short-term borrowing costs. It is an essential financial term in countless financial instruments," the plaintiffs' petition says.
Their lawsuit was consolidated with similar lawsuits for pretrial purposes, but a federal judge in Manhattan dismissed Gelboim and Zacher's sole claim for relief -- and therefore their complaint -- with prejudice.
When Gelboim and Zacher tried to appeal, the 2nd Circuit concluded it lacked jurisdiction because all of the other consolidated complaints had not also been dismissed.
Gelboim and Zacher the petitioned the Supreme Court to answer "whether consolidated cases retain their separate identity or become one case for purposes of appellate jurisdiction has divided the courts of appeals."
They claim that they should be allowed to appeal the dismissal now, rather than potentially waiting years while the MDL proceedings carry on.
At oral argument this morning, the Supreme Court initially appeared to be skeptical of plaintiffs' argument.
"We have a group of federal judges ... [who] tell us if we agree with you, we are going to produce a mess," said Justice Stephen Breyer, referring to an amicus brief in which a group of federal judges suggest immediate appeals might raise issues on the appellate level before a lower court encounters them.
The petitioners' attorney, Thomas Goldstein, said that this problem could be avoided, because the district court judge could chose to delay entering a final judgment if immediate appeal would be improper.
He also said delay was unnecessary in this instance, where all MDL plaintiffs' anti-trust claims were dismissed together, and only other causes of action remain before the lower court.
But Justice Anthony Kennedy remained dubious.
"It seems to me you're asking the judge to be almost disingenuous," Kennedy said.
Goldstein responded by saying he was not asking the judiciary to be disingenuous, but to ensure dismissed parties have a genuine right to appeal.
"Imagine the district court dismisses complaint A, that will be my complaint, and then later on complaints B and C settle. So they are done. They are voluntarily dismissed. So there is no final judgment there. ... It is possible that the district court will just enter a notation in the main MDL docket saying the MDL is closed," Goldstein said. "But that is not an order or judgment from which we are appealing. It is not an order or judgment that affects us. It's not a judgment at all."
Goldstein said this scenario would leave petitioners without any final judgment to appeal.
He urged that the rules do not need to be changed, only clarified to allow plaintiffs to immediately appeal the dismissal of their claims.
"I have a lawsuit. It has a judgment. The district court judge decided to dismiss it. I'm supposed to appeal," the attorney said.
The justices applied this line of reasoning when questioning attorney Seth Waxman, who appeared on behalf of the respondents.
"The [MDL] statutes do not speak of consolidation of cases, they speak of consolidated proceedings. Where do you get the notion that the cases have been consolidated? And if that notion were true, surely the consolidation must terminate when one of the cases is dismissed, how can it still be consolidated when it's dismissed and the other, and the other cases are proceeding," Justice Anton Scalia asked Waxman.
Waxman stumbled on this question, admitting that the cases were not treated as one single entity, but were only consolidated for a period of time.
He also had difficulty answering Justice Breyer's question about the issue Goldstein raised - what does a dismissed party appeal from if the remaining parties settle the case?
"It is a feature of the rule against piecemeal litigation that individual litigants sometimes have to wait," Waxman said.
Chief Justice John Roberts replied, "That just kind of begs the question whether this is piecemeal or not for these people."
Waxman did not offer any clear answer to Justice Breyer's question, a point Goldstein drove home in his closing statement.
"What are we supposed to appeal from? Justice Breyer, if you know the answer to your question which you asked three times at the end of this argument, you are alone, I believe. I do not know what it is that I am supposed to appeal from, particularly if some of the cases settle," Goldstein said.
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