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decided: November 26, 1975.



James F. Israel, Gerald W. Weaver, Bagley, Weaver & Sydor, Pittsburgh, for appellants.

Robert L. Potter, J. Tomlinson Fort, Reed, Smith, Shaw & McClay, Pittsburgh, for appellee.

Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Jones, C. J., took no part in the consideration or decision of this case.

Author: Roberts

[ 465 Pa. Page 226]


The question presented is whether a pretrial order dismissing the class aspects of a suit, but allowing the case to proceed as an individual action, is an appealable final order. We hold that it is.

Appellants Edward and Marie Bell brought a class action pursuant to Pa.R.Civ.P. 2230*fn1 against appellee Beneficial

[ 465 Pa. Page 227]

Consumer Discount Company alleging that appellee failed to record the satisfaction of mortgages as required by statute.*fn2 Appellee filed preliminary objections. The trial court sustained the preliminary objections to the suit as a class action, but permitted the named plaintiffs to proceed in their individual capacities. An appeal from this order was taken to the Superior Court which granted appellee's motion to quash the appeal. On reconsideration, the court affirmed the order per curiam (Spaeth, J., filed a dissenting opinion in which Hoffman, J., joined).*fn3 We granted appellants' petition for allowance of appeal to decide whether an order dismissing a class action is final and appealable.*fn4

With exceptions not relevant here*fn5 the Appellate Court Jurisdiction Act gives the appellate courts of the Commonwealth jurisdiction over appeals only from "final

[ 465 Pa. Page 228]

    orders."*fn6 We must decide whether orders denying class action status are "final" within the meaning of that Act.

Whether an order is final and appealable cannot necessarily be ascertained from the face of a decree alone, nor simply from the technical effect of the adjudication. The finality of an order is a judicial conclusion which can be reached only after an examination of its ramifications. We follow the reasoning of the United States Supreme Court that a finding of finality must be the result of a practical rather than a technical construction. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1226, 93 L.Ed. 1528 (1949).*fn7

In resolving this question we are faced with three alternatives: (1) orders denying class status are final and

[ 465 Pa. Page 229]

    appealable; (2) such orders are interlocutory and not appealable; and (3) only those orders which effectively terminate the action are appealable (the "death knell" doctrine).

We believe that orders denying class action status possess sufficiently practical aspects of finality to make them appealable. When an action is instituted by a named individual on behalf of himself and a class, the members of the class are more properly characterized as parties to the action. A subsequent order of a trial court allowing an action to proceed as a class action is not a joinder of the parties not yet in the action. The class is in the action until properly excluded. An order dismissing the class aspects of a suit puts the class members out of court, is a final order for those parties and is therefore appealable. See Alexander v. Mastercraft Construction Co., Inc., 455 Pa. 579, 317 A.2d 278 (1974); Zakian v. Liljestrand, 438 Pa. 249, 264 A.2d 638 (1970); Brandywine Joint Area School Authority v. VanCor, Inc., 426 Pa. 448, 233 A.2d 240 (1967); Rau v. Manko, 341 Pa. 17, 17 A.2d 422 (1941). That the named plaintiffs can, in theory, individually pursue the action further, and the ousted members of the class can bring separate individual actions against the defendant does not alter the conclusion that the denial of class action status has put the ousted members of the class "out of court" for the purpose of this particular action.

This is the reasoning this Court relied on in Lee v. Child Care Services, 461 Pa. 641, 645 n. 1, 337 A.2d 586, 588 n. 1 (1975), where we stated:

"an order sustaining preliminary objections and dismissing the class aspects of [an] action is a final order even though individual aspects of the action may survive the order. The order effectively puts out of court those members of the class not parties to the individual action. . . . DiAngeli v. Fitzgerald, 433 Pa. 529, 252 A.2d 706 (1969)."

[ 465 Pa. Page 230]

In Brandywine Joint Area School Authority v. VanCor, Inc., 426 Pa. 448, 233 A.2d 240 (1967), we used the same rationale to support our decision that an order dismissing an additional party complaint was a final appealable order. Mr. Justice O'Brien stated for a unanimous Court:

"We conclude that while an order overruling preliminary objections to an additional party complaint is interlocutory, an order granting such objections and dismissing the complaint is final and appealable. Although the plaintiff in the additional party complaint may have a further cause of action against the defendant in the additional party complaint subsequent to the resolution of the basic litigation, he is precluded in the basic litigation from determining his rights vis-a-vis the additional defendant in the litigation."

Id. at 51, 233 A.2d at 241. See McCahill v. Roberts, 421 Pa. 233, 236, 219 A.2d 306, 308 (1966); Posternack v. American Casualty Company of Reading, 421 Pa. 21, 23, 218 A.2d 350, 351 (1966); cf. Adcox v. Pennsylvania Manufacturers' Association Casualty Insurance Co., 419 Pa. 170, 175-76, 213 A.2d 366, 368 (1965); Broido v. Kinneman, 375 Pa. 568, 101 A.2d 647 (1954).

Our determination that these orders are appealable avoids the harsh consequences attendant to a conclusion that orders which put parties out of court are unappealable.*fn8 Moreover, it is consistent with the policies to be served by Pa.R.Civ.P.2230.

[ 465 Pa. Page 231]

Although our class action rule is somewhat different than its federal counterpart*fn9 the purposes to be served by these actions are identical. Professor Charles Alan Wright described this dual purpose:

"'By establishing a technique whereby the claims of many individuals can be resolved at the same time, the class suit both eliminates the possibility of repetitious litigation and provides small claimants with a method of obtaining redress for claims which would otherwise be too small to warrant individual litigation.' Thus effective use of the class action device could serve the interests both of judicial administration and of justice."*fn10

Refusing to allow appeals here would undermine the basic objectives of the class action rule. The judicial process would not achieve the benefits of having matters affecting large numbers of people litigated expeditiously in a single action. By allowing appeals from orders denying class status, individuals with small but meritorious claims will not be turned away without recourse where the action should be characterized as a class action but has not been so designated.

Appellee urges that to allow appeals from these orders will increase the workload in the already overburdened appellate courts. They remind us of the principles of judicial

[ 465 Pa. Page 232]

    economy upon which the finality rule is based.*fn11 We are mindful of the need to avoid piecemeal review but we are convinced that our decision today is faithful to those principles.

After a decision by a trial court that an action is not properly maintainable as a class action, an early determination by an appellate court that a matter is, or is not, a proper class action avoids repetitious litigation.*fn12 Resolving the merits of a suit against a single defendant by a potentially large number of plaintiffs in one action "serve[s] the interests both of judicial administration and of justice." Moreover, this holding recognizes our basic duty to review those orders which end parties' participation in an action.

Despite the contention that allowing appeals from these orders might, perhaps, increase the number of cases for appellate review, we believe, as does Professor Wright, that "[i]f better justice can be obtained by broadening the scope of appellate review, then even congestion delay and expense are not too high a price to pay."*fn13 We do not perceive our appellate responsibilities as a variable function of our caseload.*fn14 Appellate review at this juncture is a judicial duty which we may not abdicate by simply saying that we do so to avoid "congestion, delay and expense."

[ 465 Pa. Page 233]

Our holding also avoids the undesirable consequences that adoption of the "death knell" doctrine would bring.*fn15

[ 465 Pa. Page 234]

Although that doctrine allows appeals from those orders which effectively terminate an action,*fn16 it forces appellate courts to make difficult and burdensome ad hoc factual determinations.*fn17 Courts which have adopted this approach have experienced great difficulty applying it.*fn18

[ 465 Pa. Page 235]

Allowing appeals from orders denying class action status brings a uniformity that the death knell doctrine does not. Ours is a rule that litigants, trial courts, and appellate courts can apply without the uncertainty which attends the death knell doctrine.

Any suggestion that allowing appeals from such orders will encourage class actions by unscrupulous individuals more anxious to blackmail defendants into settlement than to adjudicate the merits of the claim underestimates the legal and professional resources available to combat such abuses of the judicial process.*fn19 Allowing these appeals does not create new litigation and throw open once-closed doors of courts to frivolous law suits. As with any mixed finding of law and fact, we will give appropriate deference to the trial courts' determinations whether an action is properly maintainable as to class action. The effect of our holding here is simply that denials of class status will be reviewable before parties are excluded from litigating the merits of the claims.

Appellants have instituted an action on behalf of themselves and a class of which they aver they are members. The trial court decided that the action is not properly a class action, but may continue as an individual action. Because the trial court's order operates to remove parties from the litigation, the order which puts individuals out

[ 465 Pa. Page 236]

    of this particular action, is final and the merits of the appeal must be considered.

Order of the Superior Court quashing the appeal vacated. Case remanded to the Superior Court for proceedings consistent with this opinion.

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