Class certification orders can fundamentally alter the landscape of a lawsuit. In class cases, the certification order is often the most important event in the case. A class certification order can escalate what is a small and parochial dispute into a make-or-break case for the defendant dealing with hundreds and perhaps thousands of claims. Conversely, denial of a class certification motion can make it impossible for a plaintiff to proceed if her claims do not have a sufficient monetary value to justify the costs of litigation.

For years, Indiana law has largely locked class-action litigants out of the appellate courts until the case came to a final judgment. Indiana has a long tradition of limiting the ability of litigants to take an appeal absent a final judgment. Indiana courts have been particularly sensitive to the taking of interlocutory appeals on non-dispositive issues because they raise the specter of piecemeal litigation through duplicative appeals. E.g., Thompson v. Thompson, 286 N.E.2d 657, 659 (Ind. 1972). Indiana’s strict version of the final judgment rule therefore does not even follow exceptions to the rule applied in federal courts and in most other jurisdictions, such as the “collateral order” doctrine applicable in federal courts. Lauro Lines s.r.l. v. Chasser, 490 U.S. 495 (1989).

In 2008, Indiana created a new exception to the final judgment rule specifically for orders granting or denying class action certifications. Under new Appellate Rule 14(C), a party wishing to seek an interlocutory appeal of a class certification order can ask for one directly from the Indiana Court of Appeals. The new rule creates a special category of appeals for an “interlocutory order granting or denying class action certification under Ind. Trial Rule 23.” Id. The motion must be filed within 30 days and must generally state “the date the order granting or denying class action certification was noted in the Chronological Case Summary,” “the facts necessary for consideration of the motion,” and “the reasons the Court of Appeals should accept the interlocutory appeal.” Id.

Unlike other discretionary interlocutory appeals, Rule 14(C) does not set out any specific grounds the Court of Appeals will consider in exercising its discretion to grant or deny an interlocutory appeal of a class certification order. Instead, the Rule on its face leaves it to the courts to develop the relevant criteria for an interlocutory appeal on a case-by-case basis.

As with many rules of procedure, there is an analogous federal rule on which Rule 14(C) is modeled in part. Under Federal Rule of Civil Procedure 23(f), the federal appellate courts may grant an interlocutory appeal of “an order granting or denying class-action certification under this rule if a petition for permission to appeal is filed with the circuit clerk within 14 days after the order is  entered. An appeal does not stay proceedings in the district court unless the district judge or the court of appeals so orders.” Id.

Like the Indiana rule, FRCP 23(f) does not on its face state what criteria the federal courts will use in reviewing a request for an interlocutory appeal of a class certification order. As the Advisory Committee Note to the rule explains: “Permission to appeal may be granted or denied on the basis of any consideration that the court of appeals finds persuasive. Permission is most likely to be granted when the certification decision turns on a novel or unsettled question of law, or when, as a practical matter, the decision on certification is likely dispositive of the litigation.”

The federal courts have followed the suggestion of the Advisory Committee Note and developed criteria that apply in most cases to weed out those unworthy of interlocutory appeal. The federal courts have consistently looked to two general concerns in reviewing requests for appeals in this context. First, the federal courts examine whether the class certification is in effect dispositive of the rest of the case. Blair v. Equifax, 181 F.3d 832 (7th Cir. 1999). For instance, it will often not be feasible for a plaintiff to carry through a lawsuit when a class certification is denied where value of the plaintiff’s individual claim is nominal. An appeal may therefore be granted when the claims for which certification was denied “may be too small to survive as individual claims.” Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 165 (3rd Cir. 2001). Conversely, a defendant facing a sizeable class claim is often forced to settle the case or face the specter of crippling liability even where the merits of the case are slight. As Judge Posner put it: “[J]ust as a denial of class status can doom the plaintiff, so a grant of class status can put considerable pressure on the defendant to settle, even when the plaintiff’s probability of success on the merits is slight.” Blair, 181 F.3d at 834–835. The federal courts have therefore allowed interlocutory appeals when the party seeking one can show that the class certification order threatens to dispose of the case prematurely because of “undue pressure on the defendant to settle regardless of the actual merit of the suit.” Isaacs v. Sprint Corp., 261 F.3d 679, 680 (7th Cir. 2001).

Second, the federal courts have allowed interlocutory appeals to go forward when the case raises novel issues or could otherwise help develop the law. See, e.g., In re Lorazepam & Clorazepate Antitrust Litigation, 289 F.3d 98, 105 (D.C. Cir. 2002); Sumitomo Copper Litigation v. Credit Lyonnais Rouse, Ltd., 262 F.3d 134, 139 (2d Cir. 2001). For instance, the Eleventh Circuit has held that an appeal may be appropriate where “an appellate ruling sooner rather than later will substantially assist the bench and bar,” or when “the unsettled issue relates specifically to the requirements of Rule 23 or the mechanics of certifying a class.” Prado-Steiman v. Bush, 221 F.3d 1266, 1275 (11th Cir. 2000).

These considerations are not exclusive, and the case law recognizes that there are other circumstances that might warrant early review. For instance, the Eleventh Circuit uses a multi-factor test that considers such additional concerns as “whether the petitioner has shown a substantial weakness in the class certification decision” and the nature and status of the litigation before the district court” given the disruption an appeal might cause. Id. at 1275-76.

Indiana courts have a tradition of following the federal courts’ interpretations of rules that are similar to Indiana’s. Hilliard v. Jacobs, 927 N.E.2d 393 (Ind. Ct. App. 2010). While not a verbatim copy, Indiana’s new Rule 14(C) follows the same principles as FRCP 23(f). Both rules are intended to be limited exceptions to the final judgment rule yet provide no guidance on their face as to the criteria that orders must meet in order to be certified for appeal. They also both require certification to be decided by the appellate courts and do not allow the trial court to prevent an appeal, another clear sign that the drafters of Rule 14(C) had the federal model in mind.

The Indiana courts are therefore likely to follow the federal caselaw in applying Rule 14(C). Indeed, the federal courts’ emphasis on accepting those cases that raise important legal issues or where the certification order is virtually dispositive of the case is consistent with how Indiana cases have always treated interlocutory appeals. Indiana law does not allow interlocutory appeals where the party seeking it can show that it “will suffer substantial expense, damage or injury if the order is erroneous and the determination of the error is withheld until after judgment” or the “order involves a substantial question of law, the early determination of which will promote a more orderly disposition of the case.” Id. While Rule 14(C) does not require a party to meet these high hurdles, certainly the concerns underlying them (the need to reserve appeals for important legal questions and protecting parties from undue prejudice) should be relevant for class certification appeals as well. The federal case law allowing for federal appeals of class certification orders is consistent with these familiar principles and, as cases develop, it appears likely that Indiana decisions will apply the same limitations and factors used by the federal courts in determining when an interlocutory appeal is appropriate.

Finally, questions will arise regarding whether orders associated with the class certification order can also be applied. For instance, a party might want to appeal orders concerning the giving of class notices or allowing parties to intervene. The federal rule is clear that no such appeals are allowed. See Fed. R. Civ. Pro. 23(f); see also Advisory Committee Note to Rule 23(f) (“No other type of Rule 23 order is covered by this provision.”). Indiana’s Rule 14(f) applies only to an “interlocutory order granting or denying class action certification under Ind. Trial Rule 23.” It is therefore very likely that the Indiana courts will only allow appeals of the certification order itself and not collateral orders the trial court might enter in the process.