## Facts

- Purchasers of securities brought a federal securities-fraud action against an accounting firm and others, alleging violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 based on a prospectus they relied upon.
- The plaintiffs sought to litigate on behalf of themselves and a proposed class under Federal Rule of Civil Procedure 23.
- The district court initially certified a class, then later decertified it before any final merits judgment.
- The plaintiffs appealed the decertification order to the court of appeals under 28 U.S.C. § 1291.
- The court of appeals asserted jurisdiction under a “death knell” theory, reasoning that the plaintiffs likely would not proceed individually due to the costs of litigation relative to their claims, and it reversed the decertification order.
- The Supreme Court granted review to decide whether such an order is immediately appealable under § 1291, including under the collateral order doctrine or the “death knell” doctrine.

## Issues

1. Whether a prejudgment order denying or decertifying class certification is a “final decision” appealable as of right under 28 U.S.C. § 1291.
2. Whether such an order is immediately appealable under the collateral order doctrine.
3. Whether appellate jurisdiction may be based on a “death knell” exception tied to the economic feasibility of pursuing individual claims.

## Decision

- The Supreme Court reversed the court of appeals and remanded with instructions to dismiss the appeal for lack of jurisdiction.
- A prejudgment order denying or decertifying class certification is not a “final decision” under § 1291 and is not appealable as of right.
- The collateral order doctrine does not apply because class-certification determinations are revisable, intertwined with the merits, and reviewable after final judgment.
- The “death knell” doctrine cannot create appellate jurisdiction; an appealability rule turning on claim size or litigation economics is for Congress, not courts.

## Legal Principles

- Section 1291 generally limits appeals as of right to “final decisions”; an interlocutory class-certification denial or decertification does not qualify.
- The collateral order doctrine permits immediate appeal only for a narrow set of orders that (i) conclusively determine the question, (ii) resolve an important issue separate from the merits, and (iii) would be effectively unreviewable after final judgment; class-certification denials typically fail these requirements.
- Courts may not create a categorical, economics-based exception to finality for class-certification orders; administrability concerns and the final judgment rule bar a “death knell” appeal as of right.
- Existing mechanisms for interlocutory review include discretionary certification under 28 U.S.C. § 1292(b) and, in extraordinary circumstances, mandamus.

## Conclusion

The Court held that prejudgment orders denying or decertifying class status are not immediately appealable as of right under § 1291, rejecting both collateral order treatment and the “death knell” theory, and requiring dismissal of the interlocutory appeal.


Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978)