Does GS § 7A-27 Require Immediate Appeal of all Class Certification Orders?

It appears that the answer may be yes. In 2017, the General Assembly amended G.S. § 7A-27 to permit defendants to take interlocutory appeals from orders granting class certification. Prior to the amendment, plaintiffs could pursue interlocutory appeals from orders denying class certification, but defendants had no reciprocal right of appeal.

As amended, section 7A-27(a) states that “[a]ppeal lies of right directly to the Supreme Court” from “any trial court’s decision regarding class action certification under G.S. § 1A-1, Rule 23.” It also states that appeal lies of right to the Supreme Court from all Business Court orders that are appealable. But all other Superior Court orders must be appealed to the Court of Appeals: “except as provided in subsection (a) of this section, appeal lies of right directly to the Court of Appeals . . . [f]rom any final judgment of a superior court [with exceptions immaterial to class certification] and [from orders affecting] a substantial right.”  (G.S. § 1-277 also affords an appeal from orders affecting a substantial right.)

The amended statute does not specify whether a party loses the right to appeal the class certification order if the party does not appeal immediately to the Supreme Court and instead waits for entry of final judgment. There is an argument that the party does in fact lose the right to appeal if no immediate appeal is taken – and there is an argument to the contrary.

The argument that the party loses the right to appeal if no immediate appeal is taken is as follows:

  • The Supreme Court has held that if a party fails to appeal from an order affecting a substantial right, in most (but not all) cases the party can still appeal post-judgment because G.S. § 1-277 says that the party “may” immediately appeal, which implies that the party does not have to appeal immediately.
  • There is no similar “may” language in G.S. § 7A-277 (although there is no “must” language either).
  • For most or all other appeals governed by G.S. § 7A-277 (including Rule 54(b) appeals), if the losing party fails to appeal immediately, the right to appeal is lost.
  • There are cases holding that class certification should be determined before summary judgment motions are addressed at the trial level – which implies that an immediate appeal is desirable and perhaps required.
  • If the loser waited until after judgment, G.S. § 7A-27 would create a situation where the class certification decision from a Superior Court (other than the Business Court) would be appealable to the Supreme Court and the final judgment would be appealable to the Court of Appeals, which would be unworkable as a practical matter, implying that the General Assembly intended to require the loser in a class certification case to appeal immediately.

The argument that the losing party can wait until after final judgment to appeal is as follows:

  • The 2017 amendment does not specifically require an immediate appeal, and interlocutory appeals are generally disfavored.
  • In federal court, a loser has the option to ask for an immediate appeal (the appellate court has to say OK, which is a different twist) – but even if the loser doesn’t even try to appeal immediately, the loser can still appeal after entry of final judgment.
  • There is arguably no particular reason to require the loser to appeal the class certification decision right away in all cases (although an immediate appeal makes a lot of sense in most cases).

Even if the statute requires an immediate appeal, the first time this issue is raised the appellate courts may well avoid penalizing the losing party by granting certiorari, of course. But it seems clear that the legislators who drafted the statute did not anticipate a scenario in which a plaintiff’s motion for class certification is denied and the plaintiff chooses not to appeal immediately – a choice that plaintiffs’ counsel sometimes make for strategic reasons.

Senate Bill 113, introduced on February 17, 2021, contemplates an amendment to the provision in G.S. § 7A-27 that routes parental rights appeals directly to the Supreme Court. Perhaps the General Assembly will address the issue above as well.