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In Re Baycol Cases I and Ii.

February 28, 2011

IN RE BAYCOL CASES I AND II.


Los Angeles County Super. Ct. No. JCCP 4217

The opinion of the court was delivered by: Werdegar, J.

Ct.App. 2/7 B204943

The right to appeal in California is generally governed by the "one final judgment" rule, under which most interlocutory orders are not appealable. (See Code Civ. Proc., § 904.1.)*fn1 In Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695 (Daar), however, concerned that orders dismissing all class action claims might in some instances escape review, we adopted a "death knell" doctrine that allowed a party to appeal such orders immediately. Here, we address uncertainty over the scope of the death knell doctrine: does it extend to orders that simultaneously terminate individual claims as well, or does it apply only where, as was the case in Daar itself, individual claims survive?

We conclude the preservation of individual claims is an essential prerequisite to application of the death knell doctrine: the doctrine renders appealable only those orders that effectively terminate class claims but permit individual claims to continue. When instead an order terminates both class and individual claims, there is no need to apply any special exception to the usual one final judgment rule to ensure appellate review of class claims. Instead, routine application of that rule suffices to ensure review while also avoiding a multiplicity of appeals. Because the Court of Appeal misapplied these principles in dismissing an appeal from the sustaining of a demurrer to class claims here, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

In 1997, defendant Bayer Corporation (Bayer) gained United States Food and Drug Administration approval for, and shortly thereafter began marketing, the drug Baycol. (In re Baycol Products Litigation (D.Minn. 2003) 218 F.R.D. 197, 201.) Baycol, generically known as cerivastatin sodium, is part of a class of cholesterol lowering drugs commonly referred to as statins. (Ibid.) In 2001, Bayer withdrew Baycol from the market after concerns arose about links between the use of Baycol and several acute, and sometimes fatal, muscle tissue diseases. (Ibid.)

Following Bayer's withdrawal of Baycol from the market, thousands of plaintiffs filed suit against Bayer. (In re Baycol Products Litigation, supra, 218 F.R.D. at p. 201.) Plaintiff Douglas Shaw filed this case as a class action, alleging claims for violation of the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.) and for unjust enrichment. The complaint alleged Bayer had engaged in false and misleading advertising regarding Baycol.

In 2007, after consolidation with other actions in a Judicial Council Coordinated Proceeding, Shaw filed a first amended complaint, adding to the UCL and unjust enrichment claims a claim under the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.). The amended complaint sought to certify a class of "[a]ll persons or entities who purchased or paid for the drug Baycol between February 18, 1998 and August 8, 2001 . . . , to be used by California Consumers, and not for resale."

Bayer demurred to both the class allegations and each substantive claim. On April 27, 2007, the trial court sustained the demurrer in its entirety without leave to amend. It thereafter denied Shaw's motion for reconsideration on both class and individual claims and entered a judgment of dismissal. Bayer served a notice of entry of judgment on October 29, 2007, and Shaw filed his notice of appeal on December 20, 2007.

The Court of Appeal reversed dismissal of Shaw's individual UCL claim, concluding he should have been granted leave to amend. However, it declined to consider on the merits the appeal of the class claims dismissal and instead dismissed that portion of the appeal. Relying on cases that have held death knell orders terminating class claims are immediately appealable, the Court of Appeal reasoned that, upon entry of the April 27, 2007, order sustaining Bayer's demurrer, the class claims dismissal, unlike the individual claims dismissal, was appealable. Consequently, the December 20, 2007, notice of appeal was, as to the class claims, untimely. (See Cal. Rules of Court, rules 8.104, 8.108(e).)

We granted review to resolve uncertainty over the timing of appeals in cases involving class claims.

DISCUSSION

Under the one final judgment rule, " 'an appeal may be taken only from the final judgment in an entire action.' " (Molien v. Kaiser Foundation Hospitals (1980) 27 Cal.3d 916, 921, quoting Tenhet v. Boswell (1976) 18 Cal.3d 150, 153.) " 'The theory [behind the rule] is that piecemeal disposition and multiple appeals in a single action would be oppressive and costly, and that a review of intermediate rulings should await the final disposition of the case.' " (Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688, 697; see also Flanagan v. United States (1984) 465 U.S. 259, 264 [the one final judgment rule "reduces the ability of litigants to harass opponents and to clog the courts through a succession of costly and time-consuming appeals"]; Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 741, fn. 9 [the rule ensures a complete record for the reviewing court, allows it to better craft its directions to the trial court, and reduces trial court uncertainty and delay].)

The one final judgment rule is "a fundamental principle of appellate practice" (Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 21), recognized and enforced in this state since the 19th century (see, e.g., Ashley v. Olmstead (1880) 54 Cal. 616, 618; Agard v. Valencia (1870) 39 Cal. 292, 297; Hibberd v. Smith (1870) 39 Cal. 145, 146).*fn2 The Legislature first codified the rule in the Practice Act of 1850 (Stats. 1850, ch. 142, § 258, p. 451; see Howe v. Key System Transit Co. (1926) 198 Cal. 525, 531), later incorporated it as part of the original Code of Civil Procedure (see former § 963, enacted 1872), and has retained it in the ...


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