Garza v. Swift Transportation Co. – 8/24/2009
Arizona Supreme Court Holds That Court of Appeals Lacks Appellate Jurisdiction Over Superior Court Interlocutory Denials of Class Certification for Purported Class Actions.
Plaintiff filed suit and sought certification of a class of individuals who had contracted with a Phoenix trucking company. The superior court denied class certification and determined that plaintiff’s individual claim was subject to compulsory arbitration. Plaintiff appealed the denial of class certification and the superior court stayed the arbitration. The court of appeals found appellate jurisdiction under A.R.S. § 12-2101(D) and vacated the superior court’s denial of class certification.
Swift petitioned for review. The petition did not address the issue of appellate jurisdiction. The Arizona Supreme Court granted review and ordered the parties to submit supplemental briefs on the appellate jurisdiction issue.
Overruling its decision in Reader v. Magma-Superior Copper Co., 108 Ariz. 186, 187, 494 P.2d 708, 709 (1972), the Supreme Court vacated the court of appeals memorandum decision and held that a plaintiff may not appeal an interlocutory denial of class certification. Instead, the proper vehicle for such a challenge is by Special Action.
The Court rejected plaintiff’s argument that § 12-2101(D) permitted the appeal as one “from any order affecting a substantial right made in any action when the order in effect determines the action and prevents judgment from which an appeal might be taken.” Plaintiff had argued that this standard was met because the denial of class certification rendered his claim too small to justify the cost of proceeding, thus effectively ending the litigation of his claim.
In Reader, the Arizona Supreme Court affirmed the existence of appellate jurisdiction under § 12-2101(D) to challenge a denial of class certification in a case in which, absent class certification, the plaintiff’s claim would be too small to proceed. Reader thus adopted a fact-specific approach, recognizing appellate jurisdiction to review interlocutory orders denying class certification if the orders render a case financially non-feasible to pursue.
The Court concluded that Reader should be overturned for three principal reasons. First, the Reader approach required a fact-specific analysis that created numerous complications, including a need to establish a record on the issue. Second, the Reader approach created an inconsistency because defendants had no right under § 12-2101(D) to appeal orders granting class certification. Third, the Reader doctrine was not logically limited to class certification orders, and thus created uncertainty as to whether other non-final orders could be appealed if they could be shown to render a case economically unattractive to a plaintiff.
Justice Ryan authored the opinion for the unanimous Court.