Although designed to promote judicial efficiency and fairness, class actions have become a means to extort a settlement out of defendants without considering the merits of the case. Amending New Jersey court rules to permit interlocutory appeal of class certification decisions would enhance the predictability and fairness of the judicial process, and increase the likelihood that cases are decided on the merits rather than the cost of litigation.
Class Certification is Often the 1st and Only Step in New Jersey Class Actions
Parties to class action suits in New Jersey state courts do not have a right to an immediate, or interlocutory, appeal of a court’s decision to certify, or not certify, a class of plaintiffs. Parties can only appeal certification decisions at the time they are made if the appellate court gives them permission to do so. Most courts are loath to grant a motion for interlocutory review because they generally do not doubt their own decision-making. This means that class certification decisions can be appealed as of right only after the case has been litigated to final judgment.
Why is this bad?
New Jersey’s current practice disfavoring interlocutory review of certifications emphasizes economics over justice, and invites plaintiffs to file weak claims.
In New Jersey state courts, the class certification decision often has a greater effect on the outcome of the litigation than the underlying merits of the case. For plaintiffs whose class certification has been denied, the costs of continuing the litigation to final judgment as an individual party often are economically prohibitive.
Class certification often triggers the end of litigation for defendants as well. When a questionable class certification decision is made, the defendant faces a no-win situation: it can spend resources litigating a class action case that may have been erroneously certified, or it can settle, even if it did nothing wrong. Most choose to settle.
When class certification serves as the death knell for litigation, the interests of justice are not being served.
Allowing for an Interlocutory Appeal as of Right Would Solve This Problem
A rule change permitting interlocutory appeal of class certification decisions would enhance the predictability and fairness of the judicial process, and increase the likelihood that courts reach decisions based on the merits of the cases before them.
The entire federal system and a handful of states including Connecticut, New York, and Pennsylvania already allow for interlocutory appeal of class certification decisions. A similar change to New Jersey law would ensure this state’s litigants also have an opportunity to correct class certification errors.
Either the Courts or the Legislature Could Address This Issue
Though they are by definition procedural, class certifications are in practice dispositive, and thus substantive. This means that either the courts or the legislature could make this policy change. NJCJI will continue to press this issue with both branches.
The NJ Supreme Court Committee on Civil Practices has, at our request, formed a subcommittee to consider our request to change Court Rules to allow for the interlocutory appeal of class action certifications as of right. The next report of the Committee will be issued in early 2016.
- 2014 Report of the Supreme Court Civil Practice Committee, Jan. 27, 2014.
- Proposed Amendments to N.J. R. Civ. Practice 2:2-2, 2:2-3 and 2:9-5, NJCJI, Oct. 7, 2013.
Bills establishing a right to appeal class certifications have been introduced during the past few legislative sessions at NJCJI’s encouragement.
- A2756, Sponsored by Assemblyman Wisneiwski
- Letter Regarding Interlocutory Appeal, Office of Legislative Services, June 9, 2011.
- Response of NJSBA Class Actions Committee Regarding A-4135
Memorandum, Mar. 3, 2014.
News Articles & Blogs
NJ ‘Bridgegate’ Class Action Plaintiffs Seek Certification: Law360, Feb. 19, 2014.
When Size Matters: NJCJI, Aug. 18, 2009.
Law Review & Scholarly Articles
Robert G. Bone & David S. Evans, Class Certification and the Substantive Merits, 51 Duke L.J. 1251 (2002).
Milton Handler, The Shift from Substantive to Procedural Innovations in Antitrust Suits—the Twenty-Third Annual Antitrust Review, 71 COLUM.L.REV. 1, 8-9 (1971).
Laura J. Hines, Mirroring or Muscling: An Examination of State Class Action Appellate Rulemaking, 58 U. Kan. L. Rev. 1027 (2010).
Rules Governing the Courts of the State of New Jersey, Rule 4:32-1. Requirements for Maintaining Class Action.
Rules Governing the Courts of the State of New Jersey, Rule 2:2. Appealable Judgments And Determinations.
Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, 133 S.Ct. 1184 (2013).
In re Rhone-Poulenc Rorer, 51 F.3d 1293, 1298 (7th Cir. 1995).
In re New Motor Vehicles Canadian Export Antitrust Litig., 522 F.3d 6 (2008).
Blair v. Equifax Check Services, Inc., 181 F.3d 832 (1999).