The U.S. Supreme Court case California Public Employees' Retirement System (CalPERS), et al. v. Paul Felzen, et al., 1998 revolved around the issue of whether a nonparty in a class-action lawsuit could appeal an adverse judgment without first intervening in the litigation at any stage of its proceedings. CalPERS had invested heavily in Charles Keating's American Continental Corporation and lost when it collapsed; they were part of a larger group that sued but chose not to join the settlement agreement reached by other plaintiffs with some defendants due to dissatisfaction with its terms. When these settlements were approved over their objections, CalPERS sought to appeal directly despite never formally becoming party to the suit. The Supreme Court unanimously ruled against CalPERS, stating that federal law does not permit such appeals from nonparties who have chosen not to intervene during trial court proceedings even if they are financially affected by judgments or settlements made within those cases.

In the dissenting opinion for California Public Employees' Retirement System, et al. v. Paul Felzen et al., Justice Stevens argued that the majority's interpretation of Section 1291 was too narrow and did not adequately consider Congress's intent to allow appeals from all final decisions of district courts. He contended that a decision is "final" when it ends litigation on the merits and leaves nothing more for the court to do but execute judgment, which he believed applied in this case where class certification had been denied. Furthermore, he expressed concern over potential inefficiencies created by forcing litigants to wait until a final judgment before appealing adverse rulings on significant issues such as class certification.