Coopers & Lybrand v. Livesay

Coopers & Lybrand (defendant) certified financial statements of Punta Gorda Isles (Punta Gorda) in a 1972 prospectus issued before securities of Punta Gorda were publicly offered. The following year, Punta Gorda restated downward two years of earnings reported in the prospectus. Cecil and Dorothy Livesay (plaintiffs) purchased Punta Gorda securities on the basis of the prospectus and lost $2,650 upon selling those securities after the restatement. On behalf of themselves and a class of other similarly situated persons, the Livesays sued Coopers & Lybrand and others (collectively, defendants), alleging violations of federal securities laws. The district court initially certified the class but later decertified it. The Livesays appealed the court’s decertification of the class under 28 U.S.C. § 1291, which authorized appeals of “final decisions” made by district courts. The court of appeals concluded that the district court’s decertification decision was appealable as a final decision because it effectively sounded the “death knell” to the case. The court of appeals reasoned that because the Livesays’ claim was small, they were unlikely to pursue an independent action and then challenge the issue of class decertification after that individual action reached final judgment. The court of appeals reversed the district court’s decertification of the class. Coopers & Lybrand petitioned the Supreme Court for certiorari.