In a September 10, 2013 decision, Day v. Persels & Associates, LLC, the US Court of Appeals for the Eleventh Circuit held that absent class members are not parties whose consent is required under 28 U.S.C. § 636(c) for a federal magistrate judge to enter a final judgment in a class action.

Day, the named plaintiff, brought a putative class action against a group of credit counseling companies who allegedly failed to help the plaintiffs negotiate their debt with creditors. In accordance with § 636(c), Day and the defendants consented to have a magistrate judge conduct all proceedings and enter a final judgment. Ultimately, Day and the defendants settled. Over certain class members' objections, the magistrate judge certified the class, approved the settlement and entered a final judgment.

On appeal, the objecting class members principally argued that the magistrate judge lacked subject matter jurisdiction to enter a final judgment because the absent class members never consented to proceed before a magistrate. The Eleventh Circuit disagreed with the objectors and held that the magistrate possessed the power to enter a final judgment in the matter. The appeals court held that, under § 636(c), absent class members are not parties whose consent is required before a magistrate judge may enter a final judgment. Only the named parties must consent.

The Eleventh Circuit also reconciled its holding with the recent US Supreme Court decision in Standard Fire Ins. Co. v. Knowles, in which the Supreme Court held that a named plaintiff's pre-certification stipulation does not bind absent class members. Like the plaintiff's pre-certification stipulation in Knowles, Day's pre-certification consent to proceed before a magistrate judge was also not binding on the absent class members (at least, not until the class was certified and judgment was entered). Had they chosen to do so, the unnamed class members could have avoided being bound by the magistrate's judgment by moving to intervene in the district court to become named parties in the suit and withholding their consent to proceed before a magistrate judge.