Arizona Businesses Will Be Able To Appeal Class Actions Earlier

Last week Arizona’s House of Representatives voted on SB-1346, a measure of particular interest to businesses facing class action in the state. If ultimately successful, the change to the state’s law could allow businesses to exit class actions at an earlier stage, avoiding the larger legal fees associated with trials.

"That is usually what drives a settlement in a case, not based on the merits, but because the defendant is faced with the potential of millions and millions of fees."

SB-1346 is concerned with the time an appeal can be filed. At the moment, a party – typically the losing side, of course – must wait until a trial has concluded before they can argue that the trial judge was wrong to certify class action status at all. The proposed change would allow appeals to be filed the moment a decision is made.

It sounds pedantic, but the change may be important – and may well affect whether companies decide to fight lawsuits or to save themselves future expenses and settle.

“Class-action litigation is exorbitant in its expense. Where the expense comes in is in discovery," Rep. Justin Piece, R-Mesa, recently told The Arizona Star. "That is usually what drives a settlement in a case, not based on the merits, but because the defendant … is faced with the potential of millions and millions of fees. And so they may be driven to settle the case unfairly."

A defendant who can immediately appeal a certification of class action could, if the appellate court agrees, be saved the larger bills – and the additional chance to settle before discovery could still save businesses money.

It is this which makes the House’s decision popular with big businesses.

There has been criticism of the move, including questions over the legislation’s impact on class actions’ effectiveness. The move’s supporters, though, are quick to point out that trials themselves remain unchanged and the standards used by judges in certifying class action status are unaffected. Instead, whichever party disagrees with a judge’s decision can simple appeal at an earlier time – and this includes settling.

The voice vote in the House is to be followed by a final roll-call before sending the measure to the Senate. For some, the entire issue may be a step too far – Rep. Martin Quezada, D-Phoenix, has asked whether lawmakers have the authority at all to rule on this matter, pointing out that judge’s decisions – and when they can be appealed – are the jurisdiction of the state’s Supreme Court, and not the Legislature. As others disagree, it remains to be seen whether the provisionally approved measure will ever become a reality in Arizona court rooms.