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Class Action Defense Cases–Garza v. Swift: Arizona Supreme Court Holds Court Of Appeals Lacked Jurisdiction To Hear Appeal From Trial Court Order Denying Class Action Certification Motion

Trial Court Order Denying Class Action Treatment not Appealable because not “Final Judgment” so Court of Appeals Erred in Exercising Appellate Jurisdiction to Review Order Denying Class Action Certification Arizona Supreme Court Holds

Plaintiff filed a putative class action in Arizona state court against his former employer, Swift Transportation, a trucking company, alleging labor law violations; specifically, the class action complaint alleged that Swift paid its truck drivers per “dispatched mile” but “systematically underestimated mileage and, by doing so, routinely underpaid its drivers.” Garza v. Swift Transportation Co., Inc., ___ P.3d ___, 2009 WL 2579527 (Ariz. August 24, 2009) [Slip Opn., at 2-3]. The class action complaint defined the putative class as “[a]ll persons who contracted with Swift Transportation [through the form contract].” Id. Plaintiff’s counsel moved the trial court to certify the litigation as a class action; the trial court denied class action treatment “finding that (1) [plaintiff] did not have a claim under his proposed definition of the class, (2) the class was not adequately defined, and (3) the dispute over the meaning of the contract term ‘dispatched miles’ would require inquiry into extrinsic evidence for each class member.” Id., at 3. Plaintiff appealed, and the Court of Appeals found “without discussion” that it had appellate jurisdiction over the denial class action certification. Id. The appellate court then vacated the trial court order, “determining that [plaintiff] has a claim typical of other potential class members’ claims” and “holding that the term ‘dispatched mile’ should be interpreted uniformly for all class members.” Id. Defense attorneys sought review by the Arizona Supreme Court without reference to the appellate jurisdiction issue, id. The Supreme Court “granted review and d ordered the parties to submit supplemental briefs on the jurisdictional issue.” Id., at 3-4. The Arizona Supreme Court reversed: “In this case, we address whether the court of appeals properly exercised jurisdiction over an appeal from a superior court order denying a motion for class certification. We hold that the court of appeals lacked appellate jurisdiction.” Id., at 2.

In considering whether a trial court order denying class action certification was appealable, the Arizona Supreme Court explained that “federal courts of appeal long struggled with whether a district court’s order denying class certification was an appealable order.” Garza, at 4-5 (citations omitted). Further, “Even those federal courts finding orders denying class certification appealable acknowledged that such decisions were not technically final judgments…because they did not finally dispose of the underlying action,” but they “applied the so-called ‘death knell’ doctrine to find finality when, because of the small size of the claim, ‘a plaintiff simply [could not] continue his law suit alone.’” Id., at 5 (citations omitted). The Arizona Supreme Court noted, however, that “[t]he United States Supreme Court ultimately rejected the federal death knell doctrine in Coopers & Lybrand v. Livesay, 437 U.S. 463, 465 (1978).” Id., at 6-7. The Court then reversed Arizona appellate cases applying the death knell doctrine to find appellate jurisdiction over denials of class action certification motions. See id., at 7-16. The Court emphasized, however, that interlocutory review was still available “in an extraordinary case,” id., at 17. But because appellate jurisdiction does not exist over denials of class action certification orders, the Arizona Supreme Court reversed the Court of Appeals’ decision. Id., at 18.

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