Appellate Courts Should Defer to District Court's Merits Rulings on Late FRCP 12(b)(6) Motions: Ninth Circuit

In In re Apple iPhone Antitrust Litig., the US Court of Appeals for the Ninth Circuit held that appellate courts generally should defer to a district court's ruling on the merits of a late-filed FRCP 12(b)(6) motion.

Practical Law Litigation

On January 12, 2017, in In re Apple iPhone Antitrust Litig., the US Court of Appeals for the Ninth Circuit held that appellate courts generally should defer to a district court's ruling on the merits of a late-filed FRCP 12(b)(6) motion (2017 WL 117153 (9th Cir. Jan. 12, 2017)).

In this putative class action, the plaintiff iPhone purchasers alleged that Apple, Inc. monopolized the market for iPhone apps. Apple moved to dismiss the second amended consolidated complaint under FRCP 12(b)(6), alleging that the plaintiffs lacked statutory standing under Illinois Brick Co. v. Illinois (431 U.S. 720 (1977)). The plaintiffs argued that FRCP 12(g)(2) barred Apple from raising its failure-to-state-a-claim argument in its fourth motion to dismiss given that Apple omitted it from prior motions. The district court dismissed the complaint on the grounds that the plaintiffs lacked standing under Illinois Brick. The plaintiffs appealed on the merits and also argued that FRCP 12(g)(2) barred Apple from raising its Illinois Brick defense for the first time in its fourth FRCP 12 motion to dismiss.

The Ninth Circuit examined the application of FRCP 12(g)(2) in considering whether it forecloses a defendant from filing an FRCP 12(b)(6) motion to dismiss after making a prior motion to dismiss under FRCP 12. The Ninth Circuit found that, under FRCP 12(g)(2), a defendant may move to dismiss under FRCP 12(b)(6) even if the defendant filed a prior motion to dismiss under FRCP 12 only if the defendant raises it in a pleading under FRCP 7 or in a post-answer motion under FRCP 12(c). Agreeing with the approach of the US Courts of Appeals for the Third and Tenth Circuits, the Ninth Circuit considered FRCP 12(g)(2)'s restrictions in light of the FRCP's stated policy of judicial economy expressed in FRCP 1, and reasoned that denying late-filed FRCP 12(b)(6) motions can lead to unnecessary costs and delays. The court concluded that, as the reviewing court, it should generally forgive a district court's ruling on the merits of a late-filed motion to dismiss under FRCP 12(b)(6) and that if the district court committed any error in ruling on Apple's motion to dismiss under FRCP 12(b)(6), the error was harmless.

In considering the merits, the Ninth Circuit disagreed with the district court, held that the plaintiffs had standing to sue under Illinois Brick, and reversed and remanded the case to the district court for further proceedings.

 
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