United States District Court, D. Montana, Great Falls Division
ORDER ADOPTING FINDINGS AND RECOMMENDATIONS
Morris United States District Court Judge
Inc., and LULAROE, LLC (collectively “Defendants”
or “LLR”) filed timely objections, (Doc. 72), to
United States Magistrate Judge Kathleen DeSoto's
recommendation to deny LLR' Motion to Certify Order for
Interlocutory Appeal, (Doc. 71). LLR initially moved to
dismiss Plaintiff's complaint for lack of subject matter
jurisdiction and for failure to state a claim upon which
relief may be granted. Defendants argued that Hill's
Montana Consumer Protection Act (MCPA) claim should be
dismissed as the MCPA expressly prohibits class actions.
(Doc. 20 at 32). United States Magistrate Judge Lynch
recommended that the Court deny LLR's motion to dismiss.
Lynch based his decision, in part, on his determination that
Wittman v. CB1, Inc., 2016 WL 3093427 (D. Mont. June 1, 2016)
remained good law. This Court held in Wittman that Federal
Rule of Civil Procedure 23 preempted the MCPA's class
action ban. Id. at *6. This Court issued an order
(“Order”) denying Defendants' motion to
dismiss and adopting, in part, and modifying, in part, Judge
Lynch's Findings and Recommendations. (Doc. 56). The
Court modified Judge Lynch's recommendation to deny
LLR's Motion to Strike Class Allegations to allow LLR to
refile the motion after the close of discovery. (Doc. 56).
then filed a Motion to Certify Order for Interlocutory
Appeal. (Doc. 59). The case was transferred to Judge DeSoto,
who entered her Findings and Recommendations on October 9,
2019. Judge DeSoto recommended that Defendants' motion be
denied. (Doc. 71).
filed a timely objection and are therefore entitled to de
novo review of the specified findings and recommendations to
which they object. 28 U.S.C. § 636(b)(1). Those portions
of the findings and recommendations to which no party
objected will be reviewed for clear error. 28 U.S.C. §
636(b)(1)(A); McDonnell Douglas Corp. v. Commodore Bus.
Mach., Inc., 656 F.2d 1309, 1313 (9th Cir. 1981). Clear error
exists if the Court is left with a “definite and firm
conviction that a mistake has been committed.” United
States v. Syrax, 235 F.3d 422, 427 (9th Cir. 2000) (citations
where a party's objections constitute “perfunctory
responses argued in an attempt to engage the district court
in a rehashing of the same arguments” set forth in the
original motion, the Court will review the applicable
portions of the findings and recommendations for clear error.
Rosling v. Kirkegard, 2014 WL 693315 *3 (D.Mont. Feb. 21,
2014) (internal citations omitted). For the reasons stated
below, Judge DeSoto's Findings and Recommendations are
adopted in full.
certify an order for interlocutory appeal, LLR must
demonstrate the following: (1) the order involves a
controlling question of law; (2) as to which there is
substantial ground for difference of opinion, and; (3) an
immediate appeal may materially advance the ultimate
termination of the litigation. 28 U.S.C. § 1292(b).
raise two objections to Judge DeSoto's Findings and
Recommendations. Defendants contend that Judge DeSoto erred
in finding that the Court's Order does not involve a
controlling question of law. Defendants also argue that,
contrary to Judge DeSoto's conclusion, substantial
grounds exist for difference of opinion on the issues
presented for interlocutory review. Therefore, the Court
conducts a de novo review of the two bases for LLR's
Whether the Order resolved a controlling question of law
question of law is controlling if its resolution “on
appeal could materially affect the outcome of the litigation
in district court.” In re Cement Antitrust Litig., 673
F.2d 1020, 1026 (9th Cir. 1982). Controlling issues of law
may include questions concerning the proper parties to an
action and whether federal law preempts state law.
first argues that the application of Justice Stevens'
concurrence in Shady Grove Orthopedic Assoc., P.A. v.
Allstate Ins. Co., 559 U.S. 393 (2010), constitutes a
controlling question of law. LLR points to the fact that the
district courts that have analyzed the MCPA under Justice
Stevens' concurrence have enforced the MCPA class action
ban. As LLR notes, however, district courts have also
determined that Rule 23 prevails over the MCPA class action
ban without explicitly following Justice Stevens'
concurrence of Justice Scalia's plurality opinion in
Shady Grove. Shady Grove itself held that Rule 23 prevailed
over a state law banning class actions. Id. at
398-407. The Court agrees that the application of Justice
Stevens' concurrence does not present a controlling
question of law.
LLR takes issue with Judge DeSoto's conclusion that
Plaintiff may still be able to meet the $5 million in
controversy requirement for 28 U.S.C. § 1332. LLR
contends that an issue that would determine a substantial
category of damages constitutes a controlling question of
law. LLR cites to Nat'l Union Fire Ins. Co. of
Pittsburgh, Pa. v. Ready Pac Foods, Inc., in support of its
argument. No. CV 09-3220, 2011 WL 1059284 (C.D. Cal. March
18, 2011). The district court in National Union determined
that an issue that would “resol[ve] the largest portion
of damages and materially advance the termination of this
litigation, ” constituted a controlling issue of law
proper for certification. Id. at *3.
Court agrees that “it is not clear that [Plaintiff]
would be wholly unable to meet 28 U.S.C. § 1332's
requirements.” (Doc. 71 at 6). Judge DeSoto noted that
the amount in controversy requirement would encompass a
court's award of punitive damages, statutory damages, and
attorney fees. See Chavez v. JP Morgan Chase & Co., 888
F.3d 413 (9th Cir. 2018). Interlocutory review would not
materially advance the litigation because the amount in
controversy requirement still may be met and because class
claims could remain even if the Court were to strike class
claims under the MCPA. Further, any questions regarding the