California High Court Revives Baycol Class Action Appeal

California High Court Revives Baycol Class Action Appeal

 SAN FRANCISCO - (Mealey's) The California Supreme Court on Feb. 28 revived an appeal involving a Baycol heart drug state consumer class action, saying an appeals court misapplied the state's "death knell" doctrine about what claims can be appealed and how soon they must be appealed (In Re Baycol Cases I and II, No. S178320, Calif. Sup.).

Plaintiff Douglas Shaw filed a complaint in the Los Angeles County Superior Court, seeking certification of a class of all Californians who bought Baycol brand cerivastatin, a prescription anti-cholesterol drug made by Bayer Corp.  Shaw claimed violations of California's unfair competition law (Business and Professions Code Section 17200), the state Consumer Legal Remedies Act (Civil Code Section 1750) and unjust enrichment.

 The case was consolidated with other Baycol lawsuits, and in 2007 the trial court sustained Bayer's demurrer as to the class allegations and each substantive claim and granted no leave to amend.  Shaw appealed to the Second District Court of Appeal, which in 2009 reversed dismissal of Shaw's individual unfair competition claim, saying he should have been granted leave to amend. 

The appeals court declined to consider on its merits the appeal of the class claims dismissal.  The appeals court said California's "death knell" doctrine - which allows immediate appeals for some dismissed class actions - rendered Shaw's appeal untimely. 

In a 7-0 vote, the Supreme Court concluded:  "[T]he 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 endure appellate review of class claims. 

"Instead," the court continued, "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." 

The Supreme Court said that when the trial court entered one order dismissing both individual and class claims, "[n]o divergence between individual and class interests was thereby created.  . . .  No risk arose that the named plaintiff, lacking incentive to pursue his individual claims, might fail to press on until the entry of an appealable final judgment. 

"No need was present to treat the original order as immediately appealable, so as to prevent the trial court's class determinations from never being reviewable," it continued.  "The scope of the death knell doctrine is coextensive with its rationale.  The doctrine does not apply here." 

"If an order terminates class claims, but individual claims persist, the order terminating class claims is immediately appealable under Daar's death knell doctrine [Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695]," the court continued.  "If an order terminates class claims and individual claims as well, it is not.  Because the order here fell in the latter category, it was nonappealable, and it was error to treat the subsequent appeal from a final judgment as untimely." 

[Editor's Note:  Full coverage will be in the March 3 issue of Mealey's Emerging Drugs & Devices.  In the meantime, the opinion is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Document #28-110303-008Z.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.] 

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For more information, call editor Tom Moylan at 215-988-7739, or e-mail him at tom.moylan@lexisnexis.com.