Zack Ward v. Apple, Inc. , 791 F.3d 1041 ( 2015 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ZACK WARD; THOMAS BUCHAR, on No. 12-17805
behalf of themselves and all others
similarly situated, D.C. No.
Plaintiffs-Appellants, 4:12-cv-05404-
YGR
v.
APPLE INC., OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of California
Yvonne Gonzalez Rogers, District Judge, Presiding
Argued and Submitted
January 16, 2015—San Francisco California
Filed June 29, 2015
Before: J. Clifford Wallace, Milan D. Smith, Jr.,
and Michelle T. Friedland, Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.;
Dissent by Judge Wallace
2 WARD V. APPLE, INC.
SUMMARY*
Antitrust/Appellate Jurisdiction
The panel reversed the district court’s dismissal of an
antitrust action for failure to join an alleged co-conspirator as
a defendant.
Plaintiffs filed a putative class action against Apple, Inc.,
alleging that Apple conspired with AT&T Mobility (ATTM)
to violate federal antitrust law in connection with Apple’s
agreement with ATTM that ATTM would be the exclusive
provider of voice and data services for Apple’s iPhone. The
district court dismissed plaintiffs’ claims under Federal Rule
of Civil Procedure 19 for failure to join ATTM as a
defendant.
The panel held that it had jurisdiction under 28 U.S.C.
§ 1291 over plaintiffs’ appeal from a final decision of the
district court even though the current case, Apple III, had
been consolidated with another case, Apple II, in which the
district court had dismissed a voice and data aftermarket
monopolization claim for failure to join ATTM as a party.
The panel held that even though the parties in Apple III had
stipulated to submit the Apple II briefs on the Rule 19 issue
and had agreed that the district court should grant Apple’s
motion to dismiss if it decided to follow the decision in Apple
II, the district court’s judgment was adverse to plaintiffs and
thus appealable.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
WARD V. APPLE, INC. 3
On the merits, the panel held that the district court abused
its discretion in finding that ATTM, an alleged antitrust
coconspirator, was a necessary party under Rule 19. The
panel held that although the allegation that an entity is a joint
tortfeasor with the defendant does not mean the entity must
be joined in one action under Rule 19(a)(1)(A), there may be
circumstances in which an alleged joint tortfeasor has
particular interests that cannot be protected in a legal action
unless it is joined under Rule 19(a)(1)(B). The panel
concluded that ATTM was not a required party under Rule
19(a)(1)(A), but the district court abused its discretion by
failing to identify ATTM’s interests in this action, or address
how those interests, if any, might be impaired if this action
were resolved in its absence, as required by Rule 19(a)(1)(B).
In addition, the record did not disclose whether ATTM had an
interest that was entitled to protection under Rule 19. The
panel remanded the case to the district court for further
proceedings.
Dissenting, Judge Wallace wrote that the court of appeals
lacked statutory appellate jurisdiction because the district
court’s decision was not involuntary or adverse to plaintiffs.
He wrote that even if the court had statutory jurisdiction, he
would conclude that plaintiffs waived the Rule 19 issue by
inviting the district court to adopt the very analysis they
argued against on appeal.
4 WARD V. APPLE, INC.
COUNSEL
Mark C. Rifkin (argued), Alexander H. Schmidt, and Michael
Liskow, Wolf Haldenstein Adler Freeman & Herz LLP, New
York, New York; Francis M. Gregorek and Rachele R.
Rickert, Wolf Haldenstein Adler Freeman & Herz LLP, San
Diego, California; Randall S. Newman, Randall S. Newman
P.C., New York, New York, for Plaintiff-Appellant Zack
Ward.
Adam J. Levitt, Grant & Eisenhofer P.A., Chicago, Illinois,
for Plaintiff-Appellant Thomas Buchar.
Daniel M. Wall (argued) and Christopher S. Yates, Latham &
Watkins LLP, San Francisco, California; J. Scott Ballenger
and Roman Martinez, Latham & Watkins LLP, Washington,
D.C., for Defendant-Appellee.
OPINION
M. SMITH, Circuit Judge:
Zack Ward and Thomas Buchar (Plaintiffs) filed a
putative class action against Apple Inc. (Apple), alleging that
Apple conspired with AT&T Mobility (ATTM) to violate
federal antitrust laws. The Plaintiffs’ claims relate to Apple’s
exclusivity agreement with ATTM that ATTM would be the
exclusive provider of voice and data services for Apple’s
iPhone. The Plaintiffs appeal from the district court’s order
dismissing their claims under Federal Rule of Civil Procedure
19 for failure to join ATTM as a defendant.
WARD V. APPLE, INC. 5
In this opinion, we consider the contours of the general
rule that antitrust co-conspirators need not be joined in one
action. The Plaintiffs argue that the district court’s
determination that ATTM was a required party under Rule 19
runs counter to this rule. The Plaintiffs also contend that,
even if ATTM could otherwise qualify as a required party,
Apple has not shown that ATTM actually asserts any interests
in this action, or that its interests warrant protection under
Rule 19.
We reverse the district court’s judgment, and remand for
further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
This appeal is from the third of three related putative class
actions asserting antitrust claims against Apple in connection
with its exclusivity agreement (Exclusivity Agreement) with
ATTM.
I. Antitrust Allegations
Apple began selling the iPhone in June of 2007. Apple
entered into an agreement with ATTM that ATTM would be
the exclusive provider of voice and data services for the
iPhone for five years. The Plaintiffs allege that Apple
installed “software locks” on each iPhone it sold in order to
enforce ATTM’s exclusivity. These locks prevented ATTM
customers who used iPhones from switching to voice and
data services providers who competed with ATTM. The
Plaintiffs allege that they were not informed that they would
be locked into ATTM’s services for five years. They further
allege that the Exclusivity Agreement enabled ATTM to
charge supra-competitive prices for wireless services, and
6 WARD V. APPLE, INC.
that Apple shared in ATTM’s revenues pursuant to the
Exclusivity Agreement.
II. Apple I
Nine Apple customers filed putative class actions against
Apple and ATTM in the Northern District of California in the
summer and fall of 2007. These actions were consolidated
before Judge Ware as In re Apple AT&TM Anti-Trust
Litigation, No. 5:07-cv-05152-JW (N.D. Cal.) (Apple I). The
plaintiffs in Apple I asserted claims under § 2 of the Sherman
Act, 15 U.S.C. § 2, among other claims.
In 2008 and 2009, the district court denied motions by
Apple and ATTM to dismiss the plaintiffs’ antitrust claims.
The district court certified a class on July 8, 2010.
ATTM sought to compel arbitration pursuant to an
agreement it entered into with its wireless customers. The
district court denied the motion, citing the then-applicable
Discover Bank rule. 596 F. Supp. 2d 1288, 1297–99 (N.D.
Cal. 2008) (citing Discover Bank v. Superior Court, 36 Cal.
4th 148 (2005) (holding that, under some circumstances, class
action waivers in consumer arbitration agreements are
unconscionable)). In 2011, following the Supreme Court’s
decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct.
1740 (2011), which abrogated Discover Bank, ATTM
renewed its motion to compel arbitration. Apple also moved
to compel arbitration under ATTM’s agreement.
The district court granted both ATTM’s and Apple’s
motions to compel arbitration. 826 F. Supp. 2d 1168, 1179
(N.D. Cal. 2011). It held that because the plaintiffs asserted
claims arising out of their agreements with ATTM, which
WARD V. APPLE, INC. 7
contained arbitration clauses, the plaintiffs were “equitably
estopped” from refusing to arbitrate “jointly” against ATTM
and Apple. Id. at 1178–79.
III. Apple II
In 2011 and 2012, two new groups of Apple customers
filed class action complaints in the Northern District of
California. These actions were consolidated by Judge Ware
as In re Apple iPhone Antitrust Litigation, No. 4:11-cv-
06714-YGR (N.D. Cal.) (Apple II). The consolidated
complaint in Apple II alleged antitrust claims that were
similar to the claims in Apple I. However, unlike in Apple I,
ATTM was not named as a defendant in Apple II. Apple
moved to compel arbitration on the same grounds it asserted
in Apple I. The district court denied Apple’s motion, finding
that the plaintiffs were not equitably estopped from refusing
to arbitrate their claims against Apple. Unlike the Apple I
plaintiffs, the court reasoned, the Apple II plaintiffs had pled
their claims against Apple alone, without “intertwining” them
with ATTM’s wireless service agreement. 874 F. Supp. 2d
889, 898–99 (N.D. Cal. 2012).
Apple also sought dismissal under Rule 12(b)(7), arguing
that ATTM was a required party under Rule 19. Id. at 899.
In support of its motion, Apple submitted a declaration from
ATTM’s counsel from the Apple I litigation. The declaration
stated, in pertinent part:
ATTM is aware of this litigation . . . . ATTM
has an interest in this case, since the
Consolidated Complaint alleges that ATTM is
a monopolist and makes various allegations
regarding the service ATTM provides to
8 WARD V. APPLE, INC.
ATTM customers using iPhones . . . .
However, ATTM has not intervened in this
suit because, given the ruling in [Apple I], any
such claims must be arbitrated. If ATTM
were to be joined to this litigation, ATTM
would move to compel arbitration . . . .
In response, the district court held that ATTM was a
necessary party. The court reasoned:
[I]n order to evaluate Plaintiffs’ antitrust
claims in regard to the alleged conspiracy to
monopolize the alleged iPhone Voice and
Data Services Aftermarket, the Court will be
required to evaluate ATTM’s conduct, insofar
as Plaintiffs allege, inter alia, that ATTM
unlawfully achieved market power in that
Aftermarket due to the conspiracy and thereby
foreclosed other companies from entering the
market. . . . Such an evaluation of ATTM’s
conduct would necessarily implicate the
interests of ATTM, which means that ATTM
is a necessary party pursuant to Rule 19(a).
Id. at 900 (citing Laker Airways, Inc. v. British Airways, PLC,
182 F.3d 843, 847–48 (11th Cir. 1999)). The district court
ordered that the claim relating to monopolization of the voice
and data aftermarket be dropped if ATTM was not joined.
See id. at 902 n.29. Shortly thereafter, Apple II was
reassigned to Judge Yvonne Gonzalez Rogers. The plaintiffs
declined to join ATTM as a party in their amended complaint,
which resulted in the dismissal of their voice and data
aftermarket monopolization claim.
WARD V. APPLE, INC. 9
IV. Apple III
On October 19, 2012, the present Plaintiffs initiated this
putative class action against Apple in Ward v. Apple Inc.,
4:12-cv-05404-YGR (N.D. Cal.) (Apple III), asserting a
single claim that Apple conspired to monopolize the
aftermarket for iPhone voice and data services. ATTM was
not named as a defendant. The case was consolidated with
Apple II. The parties in Apple III stipulated to submit the
Apple II briefs on the Rule 19 issue, and agreed that the
district court should grant Apple’s motion to dismiss under
Rule 12(b)(7) if the court decided to follow Judge Ware’s
decision in Apple II. The district court granted the motion
“for the reasons set forth in Judge Ware’s July 11, 2012
Order,” and entered judgment in favor of Apple. The
Plaintiffs filed a timely notice of appeal.
JURISDICTION AND STANDARD OF REVIEW
We have appellate jurisdiction under 28 U.S.C. § 1291because this is an appeal from a final decision of the district
court. We respectfully disagree with the dissent’s conclusion
that the judgment below was not “adverse” to the Plaintiffs,
as our case law has defined that term.
The dissent contends that we “only” have jurisdiction
over appeals from final decisions of the district court that are
“involuntary and adverse to the appellant.” This statement of
our law is too broad. We have repeatedly recognized that
voluntary dismissals with prejudice that produce an adverse
final judgment may be appealed. See Berger v. Home Depot
USA, Inc., 741 F.3d 1061, 1065 (9th Cir. 2014); Concha v.
London, 62 F.3d 1493, 1506–09 (9th Cir. 1995); Unioil, Inc.
v. E.F. Hutton & Co., 809 F.2d 548, 556 (9th Cir. 1986);
10 WARD V. APPLE, INC.
Coursen v. A.H. Robins Co., 764 F.2d 1329, 1342, corrected,
773 F.2d 1049 (9th Cir. 1985). It is true that our decision in
Seidman v. City of Beverly Hills, 785 F.2d 1447, 1448 (9th
Cir. 1986), contained broad language stating that “[a] plaintiff
may not appeal a voluntary dismissal because it is not an
involuntary adverse judgment against him.” However, our
decision in Concha v. London clarified that a plaintiff “may
appeal from a voluntary dismissal with prejudice, at least
where the plaintiff is not acting pursuant to a settlement
agreement intended to terminate the litigation.” 62 F.3d at
1057 (emphasis omitted). In doing so, Concha specifically
interpreted Seidman to stand for the narrower principle that
a plaintiff may not “appeal from a joint stipulation to
voluntary dismissal, entered unconditionally by the court
pursuant to a settlement agreement.” Id. (emphasis added).
And, as the dissent acknowledges, we held in Berger v. Home
Depot USA, Inc. that “absent a settlement, a stipulation alone
does not destroy [the] adversity” required for appellate
jurisdiction. 741 F.3d at 1065.
The dissent’s conclusion that this judgment was not
adverse to the Plaintiffs appears to be based, in part, on a
definition of “adverse” that is without basis in our case law
concerning statutory appellate jurisdiction. The dissent
contends that a judgment is not adverse if “no adverse
positions were taken by the parties” or if the issue was not
“actually litigated.” The dissent appears to understand
“adverse” to refer to whether the proceedings were
sufficiently adversarial. Of course, parties must be
sufficiently adverse to one another for a justiciable
controversy to exist, see, e.g., United States v. Johnson,
319 U.S. 302, 304–05 (1943), but we do not understand the
dissent to argue that this appeal is non-justiciable because it
lacks sufficient adversity for Article III purposes, but rather
WARD V. APPLE, INC. 11
only that we lack statutory appellate jurisdiction. In
construing our statutory jurisdiction, we have consistently
used the term “adverse” to refer to whether a judgment was
prejudicial to a party, not whether the parties took sufficiently
adverse positions. For example, in Concha v. London we
explained that
[u]nder Coursen and Unioil, the appealability
of a voluntary dismissal ordinarily depends on
whether the action was dismissed with or
without prejudice. The basic principle we
follow is that the plaintiff may appeal a
voluntary dismissal only when it is with
prejudice to his right to commence another
action for the same cause or otherwise
subjects him to prejudicial terms or
conditions.
62 F.3d at 1507. We went on to explain that “[a] voluntary
dismissal without prejudice is not adverse to the plaintiff’s
interests . . . [because] [t]he plaintiff is free to seek an
adjudication of the same issue at another time in the same or
another forum.” Id. By contrast, a voluntary dismissal with
prejudice is adverse to the plaintiff’s interests because “the
plaintiff submits to a judgment that serves to bar his claims
forever.” Id. The judgment in this case is adverse to the
Plaintiffs because it bars their claims in future proceedings.
The requirement of an adverse judgment is therefore not a
barrier to appellate jurisdiction in this case.
Reading between the lines, the dissent appears to be
concerned that the parties effectively agreed with Judge
Rogers to manufacture appellate jurisdiction without
presenting the Rule 19 issue to her for an independent
12 WARD V. APPLE, INC.
decision. But the record simply does not compel the
conclusion that Judge Rogers did not make an independent
decision here. The dissent infers from the record that Judge
Rogers “understood that the Plaintiffs were not asking her to
rule on the merits of the Rule 19 issue, but rather were
attempting only to create a vehicle for appellate review of
Judge Ware’s order . . . .” (emphasis omitted). However, the
Amended Joint Case Management Statement clearly
presented the Rule 19 issue as a decision for Judge Rogers to
make:
For the sake of efficiency, Plaintiffs have
proposed submitting to the Court the prior
briefing on Apple’s Motion to Dismiss
Plaintiffs’ Consolidated Complaint in the
related case, In re Apple iPhone Antitrust
Litigation . . . . Should the Court decide to
issue the same ruling in this case . . . .
Plaintiffs will stand on their existing
complaint and not add ATTM as a party.
Therefore any such dismissal will become
final and immediately appealable to the Ninth
Circuit Court of Appeals.
At the subsequent case management conference, Judge
Rogers stated:
[I]t sounds like the issues that you’re asking
me to decide on both sides have already been
decided, so I don’t know why we’re going
through this process again. I don’t know why
we have another complaint that doesn’t
include as a defendant AT&T, which . . .
WARD V. APPLE, INC. 13
Judge Ware told you you needed to have as a
. . . party to the litigation.
The dissent interprets these comments to mean that Judge
Rogers was “confused” initially about the “unusual
procedure” proposed by the parties. But Judge Rogers’s
comments could also be interpreted to mean that she had
analyzed the issue and was inclined to issue the same ruling
as Judge Ware. In deciding whether to dismiss the case,
Judge Rogers had the benefit of the Apple II briefing. By
signing the order dismissing the case with prejudice “for the
reasons set forth in Judge Ware’s July 12, 2012 Order,” Judge
Rogers issued a final decision on the merits. This was
sufficient to give us appellate jurisdiction to review the
decision.1
In sum, because we find that the judgment below was the
product of a final decision of the district court and was
adverse to the Plaintiffs, we are satisfied that we have
statutory jurisdiction.
We review the district court’s decision to dismiss for
failure to join an indispensable party for abuse of discretion.
Dawavendewa v. Salt River Project Agric. Improvement &
Power Dist., 276 F.3d 1150, 1154 (9th Cir. 2002). However,
“[t]o the extent that the district court’s determination whether
a party’s interest is impaired involves a question of law, we
1
As for the dissent’s conclusion that the Plaintiffs waived the Rule 19
issue by “inviting Judge Rogers to adopt the very analysis that they now
allege on appeal was erroneous,” we note that Apple has not asserted a
waiver argument. See United States v. Scott, 705 F.3d 410, 415 (9th Cir.
2012) (“A party who fails to assert a waiver argument forfeits—and
therefore implicitly waives—that argument.”).
14 WARD V. APPLE, INC.
review de novo.” Id. (quoting Pit River Home & Agric.
Coop. Ass’n v. United States, 30 F.3d 1088, 1098 (9th Cir.
1994)).
DISCUSSION
The Plaintiffs argue, on several grounds, that the district
court abused its discretion in finding that ATTM was a
necessary party under Rule 19. The Plaintiffs contend that
the district court’s decision runs counter to the general rule
that joint tortfeasors need not be joined in one action. The
Plaintiffs also assert that Apple has not shown that ATTM
claims any interest in this action because ATTM has stated
that it would seek to compel arbitration if joined, and because
ATTM has no contracts with Apple that might be affected by
this litigation. The Plaintiffs further argue that, even if
ATTM has claimed an interest in this action, Apple has not
shown that ATTM’s interests are “legally protected,” or that
they may be impaired by resolution of this action in ATTM’s
absence. Therefore, the Plaintiffs contend, it was error for the
district court to find that ATTM was a necessary party based
on its alleged role in the conspiracy without first specifying
which legally protected interests ATTM had in the action.
We address these arguments in turn.
I. Joinder of Joint Tortfeasors under Rule 19
Under Rule 19, a “required party” must be joined as a
party in an action if doing so is “feasible.” Fed. R. Civ. P. 19.
Rule 19(a)(1) defines “required party,” and establishes two
broad categories of required parties. First, under Rule
19(a)(1)(A), a party is required if “in that person’s absence,
the court cannot accord complete relief among existing
WARD V. APPLE, INC. 15
parties.” Second, under Rule 19(a)(1)(B), a party is required
if:
that person claims an interest relating to the
subject of the action and is so situated that
disposing of the action in the person’s absence
may: (i) as a practical matter impair or impede
the person’s ability to protect the interest; or
(ii) leave an existing party subject to a
substantial risk of incurring double, multiple,
or otherwise inconsistent obligations because
of the interest.
According to Rule 19's text, two conditions must be
satisfied for a party to qualify as a “required party” under
Rule 19(a)(1)(B). First, the party must “claim[] an interest
relating to the subject of the action.” Fed. R. Civ. P.
19(a)(1)(B). Second, the party must be “so situated that
disposing of the action in the person’s absence” may have one
of the two consequences enumerated in Rule 19(a)(1)(B)(i)
and (a)(1)(B)(ii). There must either be a possibility that
disposing of the action in the person’s absence will “as a
practical matter impair or impede the person’s ability to
protect the interest,” or a possibility that doing so will “leave
an existing party subject to a substantial risk of incurring
double, multiple, or otherwise inconsistent obligations
because of the interest.”
The Plaintiffs argue that the district court’s decision runs
counter to the longstanding principle that joint tortfeasors
need not be joined in one action. For the reasons that follow,
we conclude that although the allegation that an entity is a
joint tortfeasor with the defendant does not mean the entity
must be joined in one action under Rule 19(a)(1)(A), there
16 WARD V. APPLE, INC.
may be circumstances in which an alleged joint tortfeasor has
particular interests that cannot be protected in a legal action
unless it is joined under Rule 19(a)(1)(B). We therefore need
to analyze the facts of this case to determine whether ATTM
is a required party in this action under Rule 19(a)(1)(B).
“It has long been the rule that it is not necessary for all
joint tortfeasors to be named as defendants in a single
lawsuit.” Temple v. Synthes Corp., 498 U.S. 5, 7 (1990) (per
curiam); see also Fed. R. Civ. P. 19 advisory committee’s
note to 1966 amend. (noting that “a tortfeasor with the usual
‘joint-and-several’ liability is merely a permissive party to an
action against another with like liability”). Antitrust
conspirators are liable for the acts of their co-conspirators.
United States v. Socony-Vacuum Oil Co., 310 U.S. 150,
253–54 (1940); Beltz Travel Serv., Inc. v. Int’l Air Transp.
Ass’n, 620 F.2d 1360, 1367 (9th Cir. 1980). It therefore
follows that a plaintiff is “not required to sue all of the
alleged conspirators inasmuch as antitrust coconspirators are
jointly and severally liable for all damages caused by the
conspiracy.” William Inglis & Sons Baking Co. v. ITT Cont’l
Baking Co., Inc., 668 F.2d 1014, 1053 (9th Cir. 1982); see
also Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 330
(1955) (holding that joinder of alleged antitrust co-
conspirators was not mandatory “since as joint tort-feasors
they were not indispensable parties”); Georgia v. Penn. R.R.,
324 U.S. 439, 463 (1945) (“In a suit to enjoin a conspiracy
not all the conspirators are necessary parties . . . .”).
For this reason, an absent antitrust co-conspirator
generally will not be a required party under Rule 19(a)(1)(A),
which applies only when a party’s absence prevents the court
from “accord[ing] complete relief among existing parties.”
This case, for example, illustrates why according complete
WARD V. APPLE, INC. 17
relief will usually be possible without joining an absent co-
conspirator like ATTM. If the Plaintiffs prevail, they will be
able to recover all of their damages from Apple alone, see
Socony-Vacuum, 310 U.S. at 253–54, without naming ATTM
as a party. Accordingly, ATTM is not a required party under
Rule 19(a)(1)(A).
It does not follow, however, that an absent antitrust co-
conspirator like ATTM cannot be a required party under Rule
19(a)(1)(B)(i), the purpose of which is to protect the interests
of absent parties. Stated differently, an absent party’s role as
a joint tortfeasor does not preclude it from having an interest
in the action that warrants protection. See Home Buyers
Warranty Corp. v. Hanna, 750 F.3d 427, 433–34 (4th Cir.
2014); Occidental Petroleum Corp. v. Buttes Gas & Oil Co.,
331 F. Supp. 92, 105–06 (C.D. Cal. 1971) (acknowledging
the general rule that “antitrust co-conspirators need not be
joined,” but observing that “[i]n the present case, [the co-
conspirator’s] status as a joint tortfeasor would not as a
practical matter negate its status as a contractual party, with
interests that are covered by Rule 19(a)”), aff’d, 461 F.2d
1261 (9th Cir. 1972) (per curiam). It is true that ATTM does
not face any damages exposure in this action. But our cases
have made it clear that, under some circumstances, the
equitable relief sought in an action may make an absent party
required under Rule 19(a)(1)(B)(i). See, e.g., Wilbur v.
Locke, 423 F.3d 1101, 1111–14 (9th Cir. 2005) (holding that
an Indian tribe was a necessary party to a suit seeking to
invalidate a contract to which it was a party), abrogated on
other grounds by Levin v. Commerce Energy, Inc., 560 U.S.
413 (2010); Manybeads v. United States, 209 F.3d 1164, 1166
(9th Cir. 2000); Northrop Corp. v. McDonnell Douglas Corp.,
705 F.2d 1030, 1044 (9th Cir. 1983) (“[A]ll parties who may
be affected by a suit to set aside a contract must be present.”).
18 WARD V. APPLE, INC.
For this reason, ATTM’s role as an antitrust co-conspirator is
not alone dispositive of whether it has interests that warrant
protection under Rule 19(a)(1)(B)(i). Therefore, we must
analyze the particular facts here to determine whether ATTM
is a required party under Rule 19(a)(1)(B).
II. The District Court Erred by Failing to Specify the
Interests ATTM Claimed
The Plaintiffs next contend that the district court erred by
holding that ATTM was a required party without specifically
identifying ATTM’s interests or addressing how those
interests might be impaired if the action were resolved in its
absence. We agree, and conclude that the district court
abused its discretion by failing to identify ATTM’s interests
in this action, or address how those interests, if any, might be
impaired if this action were resolved in its absence, as
required by Rule 19(a)(1)(B).
As with any Rule 19(a)(1)(B) case, deciding whether an
absent joint tortfeasor is a required party requires identifying
the specific interest the absent party claims and determining
whether the party’s ability to protect that interest may be
impaired despite the fact that it has not been named as a party
in the action. Compare Wilbur, 423 F.3d at 1111–14 (holding
that an absent Indian tribe was a required party in an action to
invalidate a contract between the state and the tribe, and
finding that the state could not adequately protect the tribe’s
interests in the litigation), with Cachil Dehe Band of Wintun
Indians of the Colusa Indian Cmty. v. California, 547 F.3d
962, 970–72 (9th Cir. 2008) (holding that absent Indian tribes
were not required parties in an action asserting that the state
breached a tribal-gaming compact, in part because the absent
tribes’ interest did not “arise[] from terms in bargained
WARD V. APPLE, INC. 19
contracts” (quoting Am. Greyhound Racing, Inc. v. Hull,
305 F.3d 1015, 1023 (9th Cir. 2002))).
We cannot discern whether the district court in Apple II
applied the requirements of Rule 19(a)(1)(B) when it
determined that ATTM was a required party. The court did
not identify any specific interest ATTM claimed in the action
or explain how ATTM’s ability to protect that interest might
be impaired by resolution of the action in its absence.
Instead, the district court held that “if a plaintiff’s antitrust
claims require a court to evaluate the conduct of an absent
party that is alleged to be an antitrust co-conspirator with a
defendant, thereby substantially implicating [the] interests of
that party, the absent party is necessary pursuant to Rule
19(a).” In re Apple iPhone Antitrust Litig., 874 F. Supp. 2d
889, 899 (N.D. Cal. 2012) (alteration in original) (internal
quotation marks omitted). The court reasoned that it would
be “required to evaluate ATTM’s conduct,” and that “[s]uch
an evaluation . . . would necessarily implicate the interests of
ATTM, which means that ATTM is a necessary party
pursuant to Rule 19(a).” Id. at 900 (citing Laker Airways,
Inc. v. British Airways, PLC, 182 F.3d 843, 847–48 (11th Cir.
1999)). Thus, the court concluded, “because the alleged
conspiracy is with ATTM to monopolize or attempt to
monopolize the aftermarket for voice and data services, . . .
ATTM is a necessary party.” Id. at 901.
However, the fact that the complaint portrayed ATTM as
the central player in the alleged antitrust conspiracy does not
demonstrate that ATTM is a required party. Instead, whether
ATTM is a required party depends on whether ATTM’s
interests qualify for protection under Rule 19(a)(1)(B)(i). In
many cases, an absent antitrust co-conspirator will not have
interests that warrant protection under Rule 19(a)(1)(B)(i),
20 WARD V. APPLE, INC.
even if it is alleged to have played a central role in the
conspiracy, and even if resolution of the action will require
the court to evaluate the absent party’s conduct. Therefore,
it is essential that courts identify the specific legally protected
interests an absent joint tortfeasor claims, and assess how
those interests may be impaired when, as a non-party, the
outcome of the action will not bind the absent party in future
proceedings. See Blonder-Tongue Labs., Inc. v. Univ. of Ill.
Found., 402 U.S. 313, 329 (1971). The district court abused
its discretion by failing to undertake this inquiry.
III. Whether the Record Supports a Finding That
ATTM Is a Required Party
Apple contends that, notwithstanding the district court’s
failure to specifically enumerate ATTM’s interests, the record
supports a finding that ATTM is a required party under Rule
19(a)(1)(B). For the reasons that follow, we conclude that the
record does not disclose whether ATTM had an interest in
this action that was entitled to protection under Rule 19.
A. Whether ATTM Claims an Interest
The Plaintiffs contend that ATTM is not a required party
because it has not asserted any interest in this action. In
Bowen v. United States, 172 F.3d 682 (9th Cir. 1999), we
observed that “[j]oinder is ‘contingent . . . upon an initial
requirement that the absent party claim a legally protected
interest relating to the subject matter of the action,” id. at 689(quoting Northrop Corp. v. McDonnell Douglas Corp.,
705 F.2d 1030, 1043 (9th Cir.1983)). As evidence that
ATTM has claimed an interest in this action, Apple cites a
declaration from ATTM’s counsel from Apple I, filed in
WARD V. APPLE, INC. 21
support of Apple’s motion in Apple II.2 The declaration
states: “ATTM is aware of this litigation” and “ATTM has an
interest in these claims . . . .” The declaration does not
indicate whether ATTM’s counsel from Apple I was
authorized to state ATTM’s position in Apple II or Apple III.
Therefore, it is not perfectly clear whether ATTM has, in fact,
asserted an interest in this action.
We need not resolve whether the declaration satisfies
Bowen’s requirement that ATTM claim an interest. Even if
we assume that ATTM’s attorney from Apple I was
authorized to assert ATTM’s interests in this litigation, Apple
has not shown that the interests ATTM has purportedly
claimed are legally protected under Rule 19.
B. Whether There is Record Evidence that ATTM
Has Legally Protectable Interests under Rule 19
We turn now to Apple’s contention that ATTM has a
number of interests in this action that, assuming they were
claimed by ATTM, qualify for protection under Rule
19(a)(1)(B).
We have consistently held that only “legally protected”
interests warrant protection under Rule 19. See, e.g., Cachil
Dehe Band, 547 F.3d at 970 (observing that a “crucial
premise of mandatory joinder . . . is that the absent [party]
2
This declaration was again submitted in support of Apple’s motion to
dismiss in Apple III, and the parties stipulated that it referred to the
complaint in Apple III. Specifically, the parties stipulated that the
“supporting documents submitted by Apple in [Apple II] . . . shall be
deemed to refer to the Ward complaint and are properly before the Court
in connection with Apple’s motion to dismiss the Ward complaint.”
22 WARD V. APPLE, INC.
possess[es] an interest in the pending litigation that is ‘legally
protected’”); Wilbur, 423 F.3d at 1112. We have offered
little guidance regarding which interests warrant legal
protection under Rule 19. We have clarified that “the interest
at stake need not be ‘property in the sense of the due process
clause.’” Cachil Dehe Band, 547 F.3d at 970 (quoting Am.
Greyhound Racing, 305 F.3d at 1023). And we have required
that the interest “be more than a financial stake, and more
than speculation about a future event.” Id. (internal quotation
marks omitted). “Within the wide boundaries set by these
general principles, we have emphasized the ‘practical’ and
‘fact-specific’ nature of the inquiry.” Id.Apple has cited several interests of ATTM it contends
qualify as cognizable interests under Rule 19. Apple first
contends that ATTM faces a risk of collateral consequences
as a result of this litigation, including a risk of regulatory
scrutiny and harms to its reputation. Apple also contends that
ATTM has a number of contractual rights that may be
impaired if this action is resolved in its absence.
1. Risk of Regulatory Scrutiny
We have not had occasion to decide whether the risk that
an action will trigger regulatory scrutiny may give an absent
antitrust co-conspirator a legally protected interest under Rule
19(a). Without deciding whether such a risk might give an
absent party an interest under different circumstances, we
hold that Apple has not shown that the risk of regulatory
scrutiny ATTM faces as a result of this action gives ATTM
a legally protected interest.
Apple relies heavily on the Eleventh Circuit’s decision in
Laker Airways, Inc. v. British Airways PLC, 182 F.3d 843WARD V. APPLE, INC. 23
(11th Cir. 1999). In Laker Airways, the court considered
whether a private corporation appointed by the government
of the United Kingdom to coordinate airlines’ requests for
landing and take-off times was a necessary party to an action
alleging that the corporation conspired with an airline to
monopolize the market for passenger air service between two
cities. Id. at 845. The Eleventh Circuit held that the district
court had not abused its discretion when it found that the
coordinating corporation was a required party under Rule
19(a). Id.In finding that the specific circumstances of the case
made the corporation’s interests “more significant than those
of a routine joint tortfeasor,” id. at 847–48, the court cited the
regulatory scrutiny the corporation could face as a result of
the litigation. Under the regulations of the United Kingdom,
the coordinating corporation was required to be
“independent,” and was to act in a “neutral, non-
discriminatory and transparent way.” Id. at 846. United
Kingdom law further provided that the corporation’s
appointment as coordinator would be withdrawn if the
corporation failed to act in an independent manner. Id. The
court reasoned:
[i]n order to prove its antitrust claims, [the
plaintiff] would be required to show that [the
defendant] acted in other “than an
independent manner.” Such a ruling would
surely implicate the interests of [the absent
corporation] because the United Kingdom’s
enabling legislation . . . requires that the
24 WARD V. APPLE, INC.
Secretary of State for Transport withdraw its
approval of an appointed coordinator if its
behavior is not neutral.
Id. at 848.
Laker Airways is inapposite. There the relevant agency
was affirmatively required to withdraw approval of the absent
coordinator if its behavior was not neutral. See id. By
contrast, there is no suggestion in this case that the collateral
regulatory consequences ATTM might face as a result of this
action would be any more severe, or likely to occur, than in
a typical case alleging an antitrust conspiracy. If the vague
risk of increased regulatory scrutiny in this case made ATTM
a required party, absent antitrust co-conspirators would,
almost always, be required parties in a broad range of
antitrust cases. Such a result would eviscerate the general
rule that absent antitrust co-conspirators need not be joined in
one action. See Lawlor, 349 U.S. at 329; Georgia v. Penn.
R.R., 324 U.S. at 463. Moreover, we have been reluctant to
recognize legally protected interests based solely on
“[s]peculation about the occurrence of a future event.” See
Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030,
1046 (9th Cir. 1983) (“Speculation about the occurrence of a
future event ordinarily does not render all parties potentially
affected by that future event necessary or indispensable
parties under Rule 19.”); Cachil Dehe Band, 547 F.3d at 973(holding that absent Indian tribes’ opportunity to obtain
licenses under gaming compact was not a legally protected
interest where the “likelihood of obtaining future licenses
[was] attenuated”). In the absence of any evidence that law-
enforcement or regulatory agencies are presently scrutinizing
the Exclusivity Agreement, we decline to speculate whether
the outcome of this case will impact agencies’ enforcement
WARD V. APPLE, INC. 25
decisions. For these reasons, we find that Apple has not
demonstrated that the risk of regulatory scrutiny gives ATTM
a legally protected interest in this action.
2. Reputational Interests
Apple next argues that ATTM is a required party because
this action may affect ATTM’s business or reputational
interests. This argument is similarly without merit.
We are aware of no cases holding that a joint tortfeasor’s
reputational interests alone may make it a required party
under Rule 19(a). A joint tortfeasor’s reputation generally
will be adversely impacted in any case accusing it of
wrongdoing. For this reason, recognizing a protected interest
in business reputation would significantly erode the general
rule that a plaintiff need not join all joint tortfeasors in one
action. Recognizing such an interest would also conflict with
our precedents holding that a protected interest under Rule 19
“must be more than a financial stake,” Cachil Dehe Band,
547 F.3d at 970 (quoting Makah, 910 F.2d at 558). We
conclude that ATTM’s reputational interests in this action are
not legally protected under Rule 19.
3. Contract Interests
Apple also asserts that ATTM’s contract rights give it a
legally protected interest in this action. For the reasons that
follow, we find that Apple has not demonstrated that ATTM
currently has any substantial contract rights that may be
impaired by resolution of this action.
Under some circumstances, an absent party’s contract
rights may give it a legally protected interest in an action.
26 WARD V. APPLE, INC.
See, e.g., Wilbur, 423 F.3d 1101; Am. Greyhound Racing, Inc.
v. Hull, 305 F.3d 1015, 1022–24 (9th Cir. 2002); Manybeads
v. United States, 209 F.3d 1164, 1166 (9th Cir. 2000). For
instance, it is well established that all parties to a contract are
necessary in an action to set aside the contract. See Wilbur,
423 F.3d at 1113 (citing cases). Our cases also establish that
an absent party may be required in an action seeking
equitable relief that would prevent a defendant from fulfilling
“substantial” contractual obligations to the absent party. See
Am. Greyhound Racing, 305 F.3d at 1023 (holding that absent
Indian tribes were necessary parties where “the interest of the
tribes arises from terms in bargained contracts, and the
interest is substantial”); Cachil Dehe Band, 547 F.3d at 970(interpreting American Greyhound Racing, Inc. v. Hull to
“require[]” that the interest arising from terms in bargained
contracts be “substantial” to be legally protected). Cf.
Wilbur, 423 F.3d at 1113 (“[I]t is a fundamental principle that
a party to a contract is necessary, and if not susceptible to
joinder, indispensable to litigation seeking to decimate that
contract.” (internal quotation marks omitted)). We have not,
however, held that an absent party is always required when
the relief sought in an action merely implicates an absent
party’s contract rights. See Cachil Dehe Band, 547 F.3d at
970 (“[A]n interest that ‘arises from terms in bargained
contracts’ may be protected . . . .” (emphasis added)).
Apple cites three contract interests of ATTM it contends
may be impaired if the action is resolved in ATTM’s absence:
(1) ATTM’s right to control unlock codes; (2) rights arising
from ATTM’s Wireless Service Agreement (WSA) with
customers; and (3) ATTM’s arbitration provisions in the
WSA.
WARD V. APPLE, INC. 27
a. Right to Control Unlock Codes
The Plaintiffs seek a judgment “[o]rdering Apple to
provide the unlock code upon request to all members of the
Class . . . .” Apple contends that this injunctive relief would
conflict with ATTM’s purported contractual right to prevent
Apple from unlocking ATTM customers’ iPhones. As a
threshold matter, we must determine whether the record
supports a finding that ATTM currently has such a right. The
only possible sources of this right in the record are brief
excerpts of agreements between Apple and ATTM from 2006
and 2011, and the right is not embodied therein.
We begin with the excerpt from the 2006 agreement. The
limited excerpt in the record clearly states that any right of
ATTM to control unlock codes was only to last during the
“Term and the Wind-Down Period.” As Apple’s counsel
conceded at oral argument, there is nothing in the record
defining the term or wind-down period. Without a definition
of the term or wind-down period, we cannot determine
whether ATTM still has the right Apple claims it has. We
therefore find that the excerpt of the 2006 agreement does not
demonstrate that ATTM has any existing right to control
unlock codes.
We next turn to the excerpt of the 2011 agreement. The
first clause of this excerpt appears to condition Apple’s
obligation not to unlock iPhones on its use of a SIM solution
not offered by AT&T’s SIM suppliers. There is no evidence
in the record that Apple ever employed such a solution. In
the absence of such evidence, we cannot determine whether
ATTM currently has a right to control unlock codes, and
cannot find that injunctive relief ordering Apple to disclose
28 WARD V. APPLE, INC.
unlock codes would impair ATTM’s rights under its contracts
with Apple.3
b. Interests Arising from Wireless Service
Agreements with Customers
Apple next contends that “the District Court will . . .
inevitably have to interpret the terms of ATTM’s WSA with
consumers, in ways that could affect and impair ATTM’s
rights under that contract.” We reject this argument.
The district court’s decision in Apple II undercuts Apple’s
contention that interpretation of ATTM’s WSA is
“inevitable.” The district court explicitly noted that “[the]
Plaintiffs have not contended that any of their claims arise
from ATTM service contracts,” 874 F. Supp. 2d at 899, and
declined to “reach the question of whether [the] Plaintiffs
must rely upon the WSA to advance any or all of their
claims,” id. at n.21.
Moreover, even if the district court ultimately interprets
these WSAs, ATTM, as a non-party, will not be bound by the
district court’s interpretation in subsequent proceedings. See
Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S.
313, 329 (1971) (“Some litigants—those who never appeared
in a prior action—may not be collaterally estopped without
litigating the issue. They have never had a chance to present
their evidence and arguments on the claim. Due process
3
Even if ATTM has some lingering contract interests, it may be
appropriate for the district court to exercise its discretion to fashion the
equitable relief in a way that avoids interfering with those interests,
instead of dismissing the entire action. See Occidental Petroleum Corp.
v. Buttes Gas & Oil Co., 331 F. Supp. 92, 105–06 (C.D. Cal. 1971).
WARD V. APPLE, INC. 29
prohibits estopping them despite one or more existing
adjudications of the identical issue which stand squarely
against their position.”).
Lastly, we note that there is no copy of ATTM’s WSA in
the record. It is therefore unclear what rights ATTM had
under the WSA that might be affected by this action. Nor is
there any evidence in the record suggesting that class
members are still bound by the WSAs they signed during the
class period. The complaint seeks certification of a class of
consumers who “purchased wireless voice and data services
for the iPhone from October 19, 2008, through February 3,
2011.” It is plausible that, more than four years after the last
WSA in the class period was signed, many class members
have entered into new WSAs with ATTM or other carriers.
In sum, the record does not disclose whether ATTM’s
WSAs with customers give it a legally protected interest in
this action.
c. ATTM’s Arbitration Agreement
Apple also contends that ATTM has an interest in this
action because the district court will have to construe the
arbitration provisions in the WSA. This argument is likewise
without merit.
As long as ATTM is not a party, any construction of the
arbitration clause will likely focus on whether Apple may use
ATTM’s arbitration clause for Apple’s benefit. See 874 F.
Supp. 2d at 898–99 (holding that Apple, as a non-signatory to
the arbitration agreement, did not satisfy the requirements to
invoke the doctrine of equitable estoppel, and declining to
compel the plaintiffs to arbitrate their claims against Apple).
30 WARD V. APPLE, INC.
ATTM does not have a legally protected interest in whether
Apple may compel arbitration. Nor will the district court’s
construction of the arbitration clause bind ATTM, a non-
party, in future actions. See Blonder-Tongue, 402 U.S. at
329.
For the above reasons, we hold that Apple has not
demonstrated that ATTM has a legally protected interest in
this action.
IV. Motion to Dismiss for Failure to State a Claim
Apple also contends that dismissal is appropriate because
the Plaintiffs have failed to adequately plead a claim that
ATTM had monopoly power in a relevant market. We
decline to decide this issue.
The parties stipulated that the district court could enter an
order dismissing the case with prejudice for failure to join a
necessary party. The district court entered the parties’
stipulated order “grant[ing], with prejudice, Apple’s motion
to dismiss [the] Plaintiffs’ Complaint pursuant to Rule
12(b)(7) of the Federal Rules of Civil Procedure.” The
stipulated order did not address Apple’s Rule 12(b)(6)
argument, or even acknowledge that Apple sought dismissal
in Apple III on this ground. Because the district court in
Apple III has not ruled on Apple’s Rule 12(b)(6) motion, we
decline to consider whether the Plaintiffs’ complaint pleads
a claim.
WARD V. APPLE, INC. 31
CONCLUSION
For the above reasons, we reverse the judgment of the
district court, and remand to the district court for further
proceedings.
REVERSED AND REMANDED.
WALLACE, Circuit Judge, dissenting:
I respectfully dissent. I would not reach the merits of this
appeal because, in my view, we lack jurisdiction to do so.
Even if we had jurisdiction, however, I would still decline to
reach the merits because the plaintiffs waived any challenge
to the errors they now allege on appeal.
I.
This case comes to us in a unique procedural posture. For
context, I begin with some background on an earlier case,
referenced by the majority as “Apple II.” Apple II involved a
different set of plaintiffs and a broader set of claims before
Judge Ware than those in Apple III, which were before Judge
Rogers, and are now before us on appeal.
The Apple II Plaintiffs were the first to raise the Rule 19
arguments we now see in the present appeal. But Judge Ware
was unpersuaded and ruled against the Apple II Plaintiffs. The
record indicates that Judge Ware’s July 11 order did not
address at least some of the arguments made in the Apple II
Plaintiffs’ opposition (and which the Apple III Plaintiffs raise
here on appeal), including the argument that ATTM itself
32 WARD V. APPLE, INC.
failed to claim an interest in the litigation, and that any
claimed interest was not “cognizable” under Rule 19. Instead
of addressing those arguments, Judge Ware’s order relied
heavily on the Eleventh Circuit’s Laker Airways case in
holding that ATTM was a necessary party under Rule 19
because “the Court will be required to evaluate ATTM’s
conduct.”
The Apple II Plaintiffs disagreed with Judge Ware’s Rule
19 order. They wanted to appeal from it. But given the
interlocutory nature of Judge Ware’s ruling, they were
required to wait for a final judgment. The Apple II Plaintiffs
did not want to wait, however. In fact, waiting would have
been pointless because the Apple II Plaintiffs’ entire litigation
hinged on whether ATTM was a necessary party: if ATTM
was required to be joined as a necessary party, individual
arbitration was almost inevitable; but if ATTM was not
required to be joined, Plaintiffs’ case would likely proceed
through financially feasible class-action litigation. So,
Plaintiffs needed a way to (1) sever any claims that could
possibly implicate ATTM (to avoid arbitration), and
(2) obtain immediate appellate review of Judge Ware’s Rule
19 analysis for the claims that could implicate ATTM. In the
words of Plaintiffs’ counsel, “by keeping the [voice and data]
claims together [with the apps claims], we couldn’t get the
appellate review of the voice and data dismissal until we
finish the apps case.”
Accordingly, Plaintiffs’ counsel devised a strategy: a new
set of Plaintiffs (Apple III Plaintiffs) would bring a separate
action (Apple III) to “segregate the voice and data claims into
Apple III and have only the apps claims left in Apple II.” The
premise behind creating the new action, rather than appealing
directly from Judge Ware’s ruling in Apple II, was to enhance
WARD V. APPLE, INC. 33
the Apple II Plaintiffs’ litigation position on appeal. This was
done by excising from Apple II any claims that arguably
implicated ATTM’s interests. The Apple III Plaintiffs
believed that by removing the voice and data claims—which
arguably implicated ATTM’s wireless service—from Apple
II, “Apple II [could] now proceed strictly as an apps case
[without implicating ATTM] and . . . Apple III [could] go
ahead and be dismissed so that [the Apple III Plaintiffs could]
take [Judge Ware’s] Rule 19 ruling up to the Ninth Circuit.”
But the Apple III Plaintiffs encountered a problem with
this strategy. Because they were not the parties aggrieved by
Judge Ware’s Apple II order, they could not appeal from it.
They needed Judge Rogers to issue an adverse ruling against
them—in Apple III—from which they could appeal. In an
attempt to obtain such a ruling expeditiously (that is, without
litigating the issue before Judge Rogers) both parties
stipulated to import from Apple II all of their respective
pleadings and motions, and asked Judge Rogers to rule on
them as if they had been brought in the first instance in Apple
III. Understandably confused by this rather unusual
procedure, Judge Rogers told the parties that
it sounds like the issues that you’re asking me
to decide . . . have already been decided, so I
don’t know why we’re going through this
process again. I don’t know why we have
another complaint that doesn’t include as a
defendant [ATTM], which . . . Judge Ware
told you you needed to have as a . . . party to
the litigation. And if a judge in these
[previous] cases has ruled [on that issue] . . .
34 WARD V. APPLE, INC.
then the law says you don’t get a second bite
at the apple . . . .1
Counsel for the Apple III Plaintiffs responded that they
had proceeded in this fashion “to limit . . . the amount of
work the court has to do, [and] to streamline things.” After
explaining in detail the procedural history from Apple I and
Apple II, counsel for the Apple III Plaintiffs told Judge
Rogers that the point of the new Apple III litigation was to
“create . . . a device” to achieve appellate review of Judge
Ware’s interlocutory order. That device, counsel explained,
was a stipulation to dismiss the Apple III Plaintiffs’ claims
with prejudice, but based on Judge Ware’s reasoning from the
prior case, without having Judge Rogers make that
determination anew as applied to them. In other words,
Plaintiffs’ counsel said that the Apple III Plaintiffs were
“willing to stipulate with Apple . . . that the complaint ought
to be dismissed based on Judge Ware’s . . . ruling in Apple II”
because they assumed “the court would issue the same ruling
it issued last time, which is that [ATTM] is a necessary and
indispensable party in Apple III.”
1
The majority apparently believes these particular comments do not
show that Judge Rogers was confused about why Plaintiffs were bringing
these issues again after Judge Ware had already ruled on them
(demonstrating a concern about claim and issue preclusion). The majority
thinks they “could also be interpreted to mean that she had analyzed the
issue and was inclined to issue the same ruling as Judge Ware.” With due
respect, nothing in these statements can plausibly be construed as
indicating that Judge Rogers had at this point deliberately analyzed the
Rule 19 issue, and they certainly cannot be construed as her inclination to
“issue the same ruling as Judge Ware.” Although our jurisdiction does not
depend on what is said in the give-and-take between counsel and judge at
an oral hearing, the transcript in this case, as will become apparent below,
strongly suggests that Judge Rogers never in fact made an independent
decision on the Rule 19 issue.
WARD V. APPLE, INC. 35
Once Judge Rogers understood that the Plaintiffs were not
asking her to rule on the merits of the Rule 19 issue, but
rather were attempting only to create a vehicle for appellate
review of Judge Ware’s order, Judge Rogers directed the
parties to “come up with a plan” and to submit a stipulation
that they believed would achieve their goals. Counsel for the
Apple III Plaintiffs asked Judge Rogers if she would “prefer
a form of order that essentially grants the 12(b)(7) motion,”
but Judge Rogers, having earlier emphasized that the court
was “overwhelmed right now” and that she was “not
interested in doing busy work,” said that “[i]f the two of you
can work it out so that you both have what you need in the
record and all you really need is my signature,” “I would like
to just (indicating) . . . stamp something.” She concluded,
“unless there’s some dispute . . . then I don’t need to be
involved, [except] to just put my signature.”
The Apple III Plaintiffs later submitted a joint stipulation
to dismiss their claims under Rule 19 “[f]or the reasons set
forth in Judge Ware’s . . . Order” from Apple II. Judge
Rogers—as she had promised—then signed the proposed
order granting the dismissal “PURSUANT TO THE
PARTIES’ STIPULATION,” and “for the reasons set forth in
Judge Ware’s . . . Order.” This appeal followed.
II.
In my view, Plaintiffs’ stipulation strategy produced a
“final decision” that fails to invoke our statutory appellate
jurisdiction because it was not involuntary or adverse to the
Plaintiffs. We have statutory jurisdiction only over “appeals
from . . . final decisions of the district courts,” 28 U.S.C.
§ 1291, that are both involuntary and adverse to the appellant.
See Seidman v. City of Beverly Hills, 785 F.2d 1447, 1448
36 WARD V. APPLE, INC.
(9th Cir. 1986); Unioil, Inc. v. E.F. Hutton & Co., 809 F.2d
548, 555 (9th Cir. 1986) (“To be appealable, an order must be
adverse to the appealing party. As a general rule, a plaintiff
may not appeal a voluntary dismissal because it is not an
involuntary adverse judgement against him.”), abrogated on
other grounds by Townsend v. Holman Consulting Corp.,
929 F.2d 1358 (9th Cir. 1990) (en banc).
We recently stated in Berger v. Home Depot USA, Inc.,
741 F.3d 1061, 1065 (9th Cir. 2014), that “absent a
settlement, a stipulation alone does not destroy th[e]
adversity” required for appellate jurisdiction. Id. at 1065. See
also Concha v. London, 62 F.3d 1493, 1507 (9th Cir. 1995).
Relying on Berger and Concha, the majority concludes that
the parties’ stipulation to dismiss their claims produced a
sufficiently “adverse” judgment because it was not “pursuant
to a settlement,” and was “plainly adverse to the Plaintiffs’
interests.”
Berger is inapposite, however, because it presupposes
procedural facts that do not exist in the present case. Berger
involved a single action in which a party argued its case to
one judge, the judge considered the argument and ruled
against that party, and then the two opposing parties
stipulated to dismissal for the sole purpose of obtaining a
final appealable judgment. Berger governs that type of case,
in which an involuntary, adverse interlocutory ruling merges
into a final appealable judgment, see Balla v. Idaho State Bd.
Of Corr., 869 F.2d 461, 468 (9th Cir. 1989), which is then
entered pursuant to a stipulation. For example, had the Apple
II Plaintiffs stipulated to dismissal in their case, in order to
achieve a final appealable ruling, that stipulation would have
fallen squarely within Berger’s holding, and there would be
no “adverseness” problem. But this case—Apple III—is
WARD V. APPLE, INC. 37
different. Here, there was never an involuntary, adverse
ruling against the Apple III Plaintiffs because they asked
Judge Rogers to adopt Judge Ware’s reasoning against them.
See Apple III Dkt. (4:12-cv-05404) No. 24, p. 10–11
(Plaintiffs’ counsel arguing to Judge Rogers that “the
complaint [in Apple III] ought to be dismissed based on Judge
Ware’s . . . ruling in Apple II.”).
Concha is likewise inapposite. Concha says that a
stipulated final judgment “with prejudice” is adverse to the
plaintiffs’ interests—i.e., it has “sufficient prejudice in a legal
sense”—because it “serves to bar his claims forever.” Concha
v. London, 62 F.3d 1493, 1507 (9th Cir. 1995). But Concha
answered in the negative only the question whether a
voluntary dismissal “without prejudice” would also be
adverse to the Plaintiffs for purposes of statutory jurisdiction.
It did not address the question presented in this case: whether
a final decision of a district judge is involuntary and adverse
to a party who stipulated to a particular analysis against it,
and then asked the district judge to order final judgment, in
order to argue on appeal that such analysis was actually
incorrect.
Because the claims and parties in Apple III were different
from those in Apple II, Judge Ware’s order from Apple II did
not preclude Judge Rogers from deciding the Rule 19 issue in
Apple III. Consequently, the Apple III Plaintiffs were required
to argue their position independently in Apple III and to
obtain an involuntary and adverse ruling against them in
order to have an adverse decision from which to appeal. But
they failed to do so. They said that they assumed Judge
Rogers “would” rule consistently with Judge Ware, but they
never in fact argued to Judge Rogers that Judge Ware’s
analysis in Apple II was wrong, or that she should rule in their
38 WARD V. APPLE, INC.
favor on the Rule 19 issue. Rather, they stipulated that Judge
Rogers rule against them on the Rule 19 issue for reasons
with which they ostensibly disagreed.
No case in our circuit stands for the proposition that a
non-party to a case can disagree with a judge’s ruling then
institute a new action, before a new judge, alleging a
narrower set of claims, in which they urge their judge to
adopt the prior judge’s analysis, and still have an involuntary
and adverse ruling required for appellate jurisdiction when
the new judge signs a stipulated final judgment. No
adverseness exists in the new action where the issue was
never actually litigated and no adverse positions were taken
by the parties.
That the purpose of Plaintiffs’ strategy was to fast-track
appellate review does not give us license to dispense with the
requirement that in every separate action, the parties must
take adverse positions on an issue and give the judge an
opportunity to rule independently on their claims. Otherwise,
parties could manipulate our appellate jurisdiction under the
guise of efficiency, in order to circumvent the general rule
that the district court be the first to pass judgment by applying
a legal rule to a set of claims. Cf. Am. States Ins. Co. v.
Dastar Corp., 318 F.3d 881, 885–86 (9th Cir. 2003) (“A
significant concern in assessing finality is whether the parties
have attempted to manipulate our appellate jurisdiction. A
party may not engage in manipulation either to create
appellate jurisdiction or prevent it.” (citations omitted)).
In sum, because the final judgment below was not
involuntary and adverse to the Apple III Plaintiffs, I am
persuaded that we lack statutory jurisdiction over this appeal.
WARD V. APPLE, INC. 39
III.
Even if we had statutory jurisdiction, I would conclude
that the Apple III Plaintiffs waived the Rule 19 issue by
inviting Judge Rogers to adopt the very analysis that they
now allege on appeal was erroneous. “‘[O]ne may not
complain on review of errors below for which he is
responsible.’” Deland v. Old Republic Life Ins. Co., 758 F.2d
1331, 1336–37 (9th Cir.1985), quoting Hudson v. Wylie,
242 F.2d 435, 448 (9th Cir. 1957). See also Portland Gen.
Elec. Co. v. U.S. Bank Trust Nat’l Ass’n, 218 F.3d 1085, 1089
(9th Cir. 2000).
Although the Apple III Plaintiffs stipulated to incorporate
both parties’ motions from Apple II, they ultimately drafted
a stipulation dismissing their claims “for the reasons set forth
in Judge Ware’s July 11, 2012 Order,” instead of first asking
Judge Rogers either to revisit Judge Ware’s Rule 19 analysis
in Apple II, or to perform her own Rule 19 analysis in which
she could embrace their arguments. In fact, counsel for the
Apple III Plaintiffs invited Judge Rogers to adopt Judge
Ware’s alleged error, arguing that “the complaint [in Apple
III] ought to be dismissed based on Judge Ware’s . . . ruling
in Apple II.” At bottom, the Apple III Plaintiffs invited Judge
Rogers to sign on to an analysis from a different case with the
specific intent to argue on appeal that the analysis was
erroneous. In doing so, the Apple III Plaintiffs sought
improperly to skip over the district court to have us decide the
Rule 19 issue in the first instance. They have thereby waived
any challenge to the error they invited.