NC Class Certification Appeals Bill Becomes Law

View Adam Doerr's Complete Bio at robinsonbradshaw.comHouse Bill 239, which reduces the number of judges on the North Carolina Court of Appeals and provides for direct appeals of decisions regarding class action certification to the North Carolina Supreme Court, is now law. On April 26, the General Assembly voted to override Governor Cooper’s veto, and the bill has been enacted as Session Law 2017-7.

Our earlier analysis of the law did not address when the provision regarding appeals of class certification decisions would become effective. Similar legislative changes have generally informed practitioners and courts that they apply to “appeals filed on or after” a specific date. The provision in this same bill regarding direct appeals of orders terminating parental rights does this, stating that it shall “become effective January 1, 2019, and apply to appeals filed on or after that date.” Rules and jurisdictional changes can also apply to cases filed after a certain date, or, as with appeals to the Supreme Court under the Business Court Modernization Act, based on the date of designation to the Business Court.

But House Bill 239 has no such language for appeals of decisions regarding class certification. Section 5 of the law simply gives the 2019 effective date for appeals in parental rights cases and states that the “remainder of this act is effective when it becomes law.”

This leaves unclear how the law will apply to any pending appeals of class certification decisions. The operative language states that “[a]ppeals of right lie directly to the Supreme Court … [from] [a]ny trial court’s decision regarding class action certification under G.S. 1A-1, Rule 23.” The most straightforward interpretation would be that, after April 26, a class certification appeal must be filed with the Supreme Court, but cases currently pending in the Court of Appeals would stay there. A party could file a bypass petition under Appellate Rule 15, asking the Supreme Court to take the case directly, but otherwise the Court of Appeals would keep the case. Given the ambiguity in the statute, however, it’s also possible the appellate courts could read the revised Section 7A-27 as requiring transfer of pending class action appeals to the North Carolina Supreme Court, or even as raising issues regarding the jurisdiction of the Court of Appeals in a pending case.

The answers to these issues, if they are presented, may be some time in coming. It could take much longer for the Supreme Court to address to some of the questions we pointed out in our earlier post, such as what qualifies as a “decision regarding class action certification” under the new law. We will keep you posted.

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About Adam Doerr

Adam Doerr helps companies untangle complex litigation problems, with a special focus on class actions. He has handled class actions in state and federal court involving securities law, mergers and acquisitions, employment, and contract issues.