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Millett v. Atlantic Richfield
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2000 ME 178
Docket: Cum-00-175
Argued: September 7, 2000
Decided: October 23, 2000
Panel: WATHEN, C.J., and CLIFFORD, RUDMAN, SAUFLEY, ALEXANDER and CALKINS,
JJ.
MICHAEL MILLETT et al.
v.
ATLANTIC RICHFIELD CO. et al.
CALKINS, J.
[¶1] Michael Millett and other named plaintiffs appeal from the order
of the Superior Court (Cumberland County, Cole, J.) denying their motion for
class certification. There is no final judgment in this matter. The
immediate appealability of an order denying a motion for class certification
is an issue of first impression in Maine. We conclude that such appeals are
interlocutory and that this case does not come within any of the recognized
exceptions to the final judgment rule. Accordingly, we dismiss the appeal.
I. PARTIES AND FACTS
[¶2] The five named plaintiffs own or have an interest in real estate in
Maine. They all have wells from which they obtain groundwater for drinking
and household purposes. The well water of three of the named plaintiffs has
been tested and found to contain the gasoline additive, methyl-tertiary-butyl
ether, commonly known as MTBE, at levels in excess of that considered safe
for drinking. Two of the named plaintiffs have wells which have not been
tested. The defendants are Atlantic Richfield Company (ARCO) and its
subsidiaries, ARCO Chemical Company and Lyondell Chemical Company.
[¶3] The salient facts presented by the plaintiffs for purposes of the
class certification motion are as follows. MTBE is a chemical oxygenate, first
produced by ARCO Chemical in the 1960s, but not produced commercially
until 1979 when it was added to gasoline in low concentrations to boost
octane. To meet the requirements of the Clean Air Act, 42 U.S.C.A.
§§ 7401-7671q (1995 & Supp. 2000), the Environmental Protection
Agency and the petroleum industry worked together to develop MTBE RFG,
which is reformulated gasoline with higher concentrations of MTBE. MTBE
RFG increases the oxygen content of gasoline enabling it to burn cleaner
with reduced levels of volatile organic compounds. Pursuant to the Clean Air
Act, Maine "opted in" seven counties to the reformulated gasoline program,
effective January 1, 1995. This meant that only MTBE RFG could be sold by
the gasoline stations in those seven counties. Actual sales of MTBE RFG
began in Maine in November 1994. Gas stations outside of the seven
counties also sold MTBE RFG because they found it difficult to obtain other
gasoline from suppliers.
[¶4] MTBE is very soluble in water and, when spilled, spreads farther
and faster than other components of gasoline. In 1998 several incidents of
well contamination in Maine were reported. Health officials randomly
tested 951 household wells and 793 public water sources, and they found
MTBE in 15.8% of the tested wells and water sources. Of these, 1.1% had
MTBE levels exceeding the Maine drinking water standard of 35 parts per
billion.
[¶5] The complaint alleges seven causes of action: (1) strict liability
for failure to warn; (2) strict liability for misrepresentations; (3) unfair and
deceptive trade practice; (4) negligence; (5) negligent misrepresentation;
(6) civil conspiracy; and (7) fraud. Among other contentions, the plaintiffs
allege that ARCO and its subsidiaries knew that MTBE posed a danger to
groundwater; misrepresented that danger; failed to warn others of the
danger; and engaged in a conspiracy regarding the misrepresentation and
failure to warn.
[¶6] The named plaintiffs seek to bring this action on behalf of two
subclasses. The first subclass is the "Verified Contaminated Well Subclass"
which is composed of:
all persons or entities who during the class period from
November 1, 1994 to present owned or had an interest in
property in Maine and were consumers, other than resellers, of
Defendants' MTBE or MTBE RFG and have had water tests
verifying that their well or ground water is contaminated with
MTBE in unacceptable concentrations.
The plaintiffs seek to certify this first subclass pursuant to M.R. Civ. P.
23(b)(3). They request monetary relief from the defendants for property
damage caused by MTBE. The second subclass is the "Untested Well
Subclass" which is composed of:
all persons or entities who presently own or have an interest in
property in Maine, and who 1) have been consumers, other than
resellers, of Defendants' MTBE or MTBE RFG; 2) rely on ground
water from the property for drinking and/or other household
uses[;] and 3) have not had their water tested for the presence of
MTBE.
The plaintiffs seek to certify the second subclass pursuant to M.R. Civ. P.
23(b)(2). They request an injunction requiring the defendants to establish a
fund to test and monitor their wells. The plaintiffs exclude from the
definition of both subclasses any persons who have received personal
injuries.
[¶7] The Superior Court found that the plaintiffs meet the
numerosity, commonality, and typicality requirements of M.R. Civ. P.
23(a)(1), (2), and (3). The court found that plaintiffs' attorneys can
adequately represent the class, but it found that the named plaintiffs are
inadequate representatives of their respective subclasses. The court found
that the Contaminated Well Subclass does not meet the requirements of
M.R. Civ. P. 23(b)(3) because the common questions of law and fact do not
predominate over the issues in each individual's case of reliance, causation,
comparative negligence, damages, and identification of suppliers of MTBE.
The trial court held that these individual issues also mean that the class
action is not superior to the individual action. The court found that the
Untested Well Subclass does not meet the requirements of Rule 23(b)(2)
because it concluded that the plaintiffs in that subclass are primarily seeking
monetary relief by requesting the defendants to pay for testing of their wells.
For these reasons, the Superior Court denied class certification. The
plaintiffs appeal from that denial, and the defendants request this Court to
dismiss the appeal on the ground that there is no final judgment.
II. FINAL JUDGMENT RULE
[¶8] Only final judgments are appealable except in a few narrow
circumstances. See State v. Maine State Employees Ass'n, 482 A.2d 461,
464 (Me. 1984). The final judgment rule prevents piecemeal litigation, and
"helps curtail interruption, delay, duplication and harassment;
it minimizes interference with the trial process; it serves the
goal of judicial economy; and it saves the appellate court from
deciding issues which may ultimately be mooted, thus not only
leaving a crisper, more comprehensible record for review in the
end but also in many cases avoiding an appeal altogether."
Id. In this case the plaintiffs argue that two exceptions to the final judgment
rule are applicable: the death knell exception and the judicial economy
exception.{1}
A. Death Knell Exception
[¶9] An exception to the final judgment rule allows the appeal of an
interlocutory order when that order operates as a "death knell" to the
action. The death knell doctrine is a federal invention devised exactly for
the situation in this case: the denial of class certification. See Eisen v.
Carlisle & Jacquelin, 417 U.S. 156 (1974); 15A Charles A. Wright, et al.,
Federal Practice and Procedure §§ 3911, 3912 at 338, 451 (2d ed. 1992).
[¶10] In Maine, the death knell doctrine has been applied in a
handful of cases, and none involve a situation resembling the denial of a class
certification. "The death knell exception 'permits an appeal from an
interlocutory order where substantial rights of a party will be irreparably lost
if review is delayed until final judgment.'" Andrews v. Dep't of Envtl. Prot.,
1998 ME 198, ¶ 4, 716 A.2d 212, 215 (quoting Cook v. Cook, 574 A.2d
1353, 1354 (Me. 1990)). In Andrews, the defendants appealed from a
denial of summary judgment in which the defendants claimed immunity,
and we agreed that a denial of immunity was entitled to immediate review
under the death knell doctrine. Id. In Cook, we permitted an appeal from a
foreclosure judgment, which was not final because of a pending
counterclaim, but we found that, in the particular circumstances of that
case, the foreclosure judgment precluded relief on the counterclaim. Cook,
574 A.2d at 1354. See also Moffett v. City of Portland, 400 A.2d 340, 343
n.8 (Me. 1979) (permitting appeal from denial of preliminary injunction
which sought to enjoin public disclosure of records claimed to be
confidential).
[¶11] The dominant case concerning the immediate appealability of
orders denying class certification is Coopers & Lybrand v. Livesay, 437 U.S.
463 (1978). In that case the Supreme Court determined that such appeals
are interlocutory and not immediately reviewable. Because the federal class
action rule, F.R. Civ. P. 23,{2} was identical in all respects to Maine's current
class action rule, the Coopers & Lybrand case is persuasive authority. The
Supreme Court noted that the death knell exception is utilized only when
the interlocutory order has the effect of ending the litigation. See id. at 471.
For this reason, the death knell doctrine had caused appellate courts to
determine whether the named plaintiff was able to proceed with the class
action as an individual action. This determination, in turn, caused plaintiffs
to make a record in the trial courts of their inabilities to carry forward with
the litigation, and it required trial courts to make such findings. The
Supreme Court considered this approach to "have a serious debilitating
effect on the administration of justice." Id. at 473. The Court also stated
that allowing such appeals potentially subjects the appellate court to hearing
multiple appeals in the case. See id. at 474.{3}
[¶12] Several jurisdictions with class action rules identical to or based
on F.R. Civ. P. 23 follow the reasoning of Coopers & Lybrand and hold that
class certification denials are not an exception to the final judgment rule
and are not immediately appealable.{4} Other state courts hold that class
certification orders are interlocutory but immediately appealable pursuant to
a statute or rule permitting such appeals as a matter of right or as a matter
of discretion.{5} Still other jurisdictions hold that orders denying class
certification are final and appealable, see Daar v. Yellow Cab Co., 433 P.2d
732, 736 (Cal. 1967), or treat such orders as final when the trial court
certifies them as final pursuant to equivalents of F.R. Civ. P. 54(b), see Levine
v. Empire Sav. and Loan Ass'n, 557 P.2d 386, 387 (Colo. 1976) and Martin v.
Amoco Oil Co., 696 N.E.2d 383, 385-86 (Ind.), cert. denied, 525 U.S. 1049
(1998). The Alabama Supreme Court stands alone in expressly rejecting the
reasoning of Coopers & Lybrand and holding that class certification orders
are final. See Butler v. Audio/Video Affiliates, Inc., 611 So. 2d 330 (Ala.
1992). The majority rule is that denials of class certification are
interlocutory orders and are not immediately appealable in the absence of a
state statute or rule either expressly authorizing appeals from class
certification orders or generally authorizing appeals from interlocutory
orders.
[¶13] In examining the rationale of the death knell exception, we
conclude that it is inapplicable to the order denying class certification in
this case. The basis for applying the death knell exception to class
certification denials is that without class certification the litigation will end
either because the named plaintiffs' claims are so small or because their
resources are too minimal to allow them to proceed with the case in the
absence of the prospect of class recovery. In this case our attention has not
been called to anything in the record regarding the financial resources of
the named plaintiffs or the size of their claims. They do not aver that they
are unable to proceed in the absence of class certification, and they have not
attempted to demonstrate that they will not be able to proceed with the
case.
[¶14] The plaintiffs contend that we should view the death knell from
the position of the unnamed plaintiffs. The California Supreme Court views
the denial of class certification as the death of the action for the unnamed
plaintiffs. See Daar, 433 P.2d at 736. The United States Supreme Court, on
the other hand, considers the death knell from the perspective of the
named plaintiffs and sees the issue as whether the denial of class
certification ends the entire case. See Coopers & Lybrand, 437 U.S. at
470-71.
[¶15] It makes less sense to focus on the death of the unnamed
plaintiffs' claims because the unnamed plaintiffs are not foreclosed from
bringing their own action or from seeking to be added as a named plaintiff
to the instant action. However, if the named plaintiffs are truly unable to
proceed with the case because the certification is denied, the action will
have to be dismissed, either voluntarily or involuntarily, and, for them, the
case is dead. For this reason, we view the death knell doctrine from the
position of the named plaintiffs. Because in this case there is nothing in the
record to indicate that the named plaintiffs are unable or unwilling to
proceed with the action, the result of the denial of class certification is not
the death of this action. The death knell exception to the final judgment
rule is not applicable to this case.{6}
B. Judicial Economy Exception
[¶16] The judicial economy exception to the final judgment rule is
appropriate when a "review of a non-final order can establish a final, or
practically final, disposition of the entire litigation and the interests of
justice require that immediate review be undertaken." Dep't of Human
Servs. v. Lowatchie, 569 A.2d 197, 199 (Me. 1990) (quotations and citations
omitted).
[¶17] If we were to accept this appeal and rule that the trial court
erred in denying class certification, the case would resume as a class action.
Class certifications are always subject to alteration or amendment until final
judgment is entered. See M.R. Civ. P. 23(c)(1). Presumably, any
modifications to the class description or division of a subclass into additional
subclasses or decertification of one or all subclasses would be subject to
immediate appeal in the same way that the first order denying the class
certification is appealable. Therefore, there is the potential for several time-
consuming appeals as the litigation progresses. Furthermore, if we accept
this appeal and affirm the denial of class certification, the rationale behind
the judicial economy exception will not be satisfied because in all likelihood
the affirmance will not end the litigation given that the named plaintiffs have
not made any indication to the trial court or us that the action will terminate
as to them. In other words, this appeal will not "establish a final, or
practically final, disposition of the entire litigation." Lowatchie, 569 A.2d at
199 (quotations and citation omitted). If the case proceeds to the merits,
the losing party will be entitled to an appeal. Thus, regardless of the
disposition of this appeal, if accepted, there is potential for seeing the case
again on appeal, and the goal of avoiding piecemeal appeals is not obtained.
Judicial economy is not served by taking this appeal.
The entry is:
Appeal dismissed.
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