Pearson v. Philip Morris, Inc.

• Citation: 145 P.3d 298,208 Or. App. 501
• Decision Date: 11 October 2006
• Docket Number: A131606.,0211-11819.
• Parties: Marilyn C. PEARSON and Laura Grandin, individually and on behalf of all similarly-situated persons, Appellants, v. PHILIP MORRIS, INC., nka Philip Morris USA, Inc., Respondent, and Philip Morris Companies, Inc., Defendant.
• Court: Court of Appeals of Oregon

Page 298

145 P.3d 298

208 Or. App. 501

Marilyn C. PEARSON and Laura Grandin, individually and on behalf of all similarly-situated persons, Appellants, v. PHILIP MORRIS, INC., nka Philip Morris USA, Inc., Respondent, and Philip Morris Companies, Inc., Defendant.

0211-11819.

A131606.

Court of Appeals of Oregon.

October 11, 2006.

David F. Sugerman, Portland, and Paul & Sugerman, PC, for application.

William F. Gary, Eugene, and Harrang Long Gary Rudnick P.C. for response.

Before HASELTON, Presiding Judge, and BREWER, Chief Judge, and ORTEGA, Judge.

BREWER, C.J.

Plaintiffs seek interlocutory review of the trial court's order denying their motion for class certification in this tobacco products litigation brought under the Unlawful Trade Practices Act (UTPA). We write to address the operation of the class action interlocutory appeal statute, ORS 19.225, which provides:

"When a circuit court judge, in making in a class action under ORCP 32 an order not otherwise appealable, is of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, the judge shall so state in writing in such order. The Court of Appeals may thereupon, in its discretion, permit an appeal to be taken from such order to the Court of Appeals if application is made to the court within 10 days after the entry of the order. Application for such an appeal shall not stay proceedings in the circuit court unless the circuit court judge or the Court of Appeals or a judge thereof shall so order."

(Emphasis added.) Below, we explain the factors that we consider in determining whether to permit an interlocutory appeal under ORS 19.225. We then apply those factors to this case and, in light of that analysis, conclude by denying plaintiffs' application for an interlocutory appeal.

How the legislature intended that we exercise our discretion in determining whether to allow interlocutory appeals in class actions presents a question of statutory construction that we analyze by applying the template set out in PGE v. Bureau of Labor and Industries, 317 Or. 606, 610-12, 859 P.2d 1143 (1993). The text alone, under which, assuming that other prerequisites are met, the court is to permit an appeal "in its discretion" is not particularly illuminating. The ordinary meaning of "discretion" is "power of decision: individual judgment * * * power of free decision or choice within certain legal bounds * * *." Webster's Third New Int'l Dictionary 647 (unabridged ed. 2002). That is also the accepted legal meaning of the term. See State v. Rogers, 330 Or. 282, 312, 4 P.3d 1261 (2000) (describing discretion as the authority to select from a range of legally acceptable options). Thus, a conferral of discretion is elastic, but not without limits. It is possible that the legislature intended for courts to set those limits based on criteria that the courts, themselves, develop. On the other hand, it is also possible that the legislature intended to circumscribe or cabin that discretion in a different way. Because the text and context of the provision do not reveal what limitations, if any, the legislature intended to apply to the court's exercise of its discretion, we turn to legislative history.

The provision that eventually became ORS 19.225 was enacted in 1973 as part of Senate Bill (SB) 163, a bill that created procedures for litigating class actions in Oregon. Or. Laws 1973, ch. 349, § 22.¹ SB 163 was modeled on Federal Rule of Civil Procedure (FRCP) 23, the federal class action provision. Minutes, Senate Committee on Judiciary, SB 163, April 11, 1973, 3 (statement of Laird Kirkpatrick); Minutes, Senate Committee on Consumer and Business Affairs, SB 163, February 13, 1973, 2 (statement of Ron Loew). SB 163 did not initially contain an interlocutory appeal provision; rather, that provision was added as part of a set of "agreed-upon" amendments. It was derived from the general federal interlocutory appeal statute, 28 U.S.C. section 1292(b). Tape Recording, Senate Committee on Judiciary, SB 163, May 9, 1973, Tape 30, Side 1 (statement of Preston O'Leary).²

Because ORS 19.225 is modeled on 28 U.S.C. section 1292(b), we assume that the legislature intended to incorporate interpretations of that provision existing at the time that the Oregon statute was enacted. See Southern Pacific v. Bryson, 254 Or. 478, 480, 459 P.2d 881 (1969) (stating principle); Waybrant v. Clackamas County, 54 Or.App. 740, 744, 635 P.2d 1365 (1981) ("Although there are as yet no Oregon cases interpreting ORCP 23 C, there is precedent in federal cases interpreting Rule 15(c) of the Federal Rules of Civil Procedure, which is virtually identical to ORCP 23 C." (omitted)). We turn, then, to 28 U.S.C. section 1292(b), its legislative history, and the cases interpreting it before 1973.

28 U.S.C. section 1292(b) provides:

"When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order: Provided, however, that application for an appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order."

(Italics in original.) The legislative history of the federal provision suggests two points relevant to our inquiry. First, Congress intended for the federal courts of appeal to have very broad discretion in determining whether to allow interlocutory appeals:

"The granting of the appeal is * * * discretionary with the Court of Appeals[,] which may refuse to entertain such an appeal in much the same manner that the Supreme Court today refuses to entertain application for writs of certiorari.

"[Denial of the application for interlocutory appeal] could be based upon a view that the question involved was not a controlling issue. It could be denied on the basis that the docket of the circuit court of appeals was such that the appeal could not be entertained for too long a period of time. But, whatever the reason, the ultimate determination concerning the right of appeal is within the discretion of the judges of the appropriate circuit court of appeals."

S Rep No 85-2434, 85th Cong., 2d Sess., reprinted in 1958 USCCAN 5255, 5257. Second, "the appeal from interlocutory orders thus provided should and will be used only in exceptional cases where a decision of the appeal may avoid protracted and expensive litigation * * *." Id. at 5259.³

Decisions from the federal courts of appeal—before 1973, when the Oregon legislature adopted the provision—also shed some light on the meaning of the federal provision. Shortly after its enactment, a number of courts held that the determinations required of the trial court—that is, (1) that the order involves a controlling question of law (2) as to which there is substantial ground for difference of opinion and (3) that an immediate appeal from the order may materially advance the ultimate termination of the litigation—are not merely to be "rubber stamped" by the appellate court. Rather, the appellate court must independently address those questions. See, e.g., United States v. Woodbury, 263 F.2d 784, 786 (9th Cir.1959) ("The opinion of the district judge that a controlling question is involved, while deserving of careful consideration, is not binding upon this court when we are called upon to exercise our discretion under the statute. We accordingly reexamine that point."); In re Heddendorf, 263 F.2d 887, 888-89 (1st Cir.1959) ("Although the statute does not expressly lay down standards to guide the court of appeals in its exercise of judicial `discretion,' it would seem that the appellate court should at least concur with the district court in the opinion that the proposed appeal presents a difficult central question of law which is not settled by controlling authority, and that a prompt decision by the appellate court at this advanced stage would serve the cause of justice by accelerating `the ultimate termination of the litigation.'"); Milbert v. Bison Laboratories, 260 F.2d 431, 433 (3d Cir.1958) ("To begin with, before an appeal can be had, the district court must certify in writing that the order involves a controlling question of law and that an immediate appeal may materially advance the ultimate determination of the case. In addition, the court of appeals must be of the same opinion before the appeal can be had."). Thus, by 1973, section 1292(b) had been interpreted to require the appellate court to reevaluate the conclusions underlying the trial court's decision to certify the appeal.

The federal courts also generally adopted the view expressed in the legislative history that the provision should not be routinely used to allow interlocutory appeals:

"It is quite apparent from the legislative history of [section 1292(b)] that Congress intended that section 1292(b) should be sparingly applied. It is to be used only in exceptional cases where an intermediate appeal may avoid protracted and expensive litigation and is not intended to open the floodgates to a vast number of appeals from interlocutory orders in ordinary litigation. Both the district judge and the court of appeals are to exercise independent judgment in each case and are not to act routinely."

Milbert, 260 F.2d at 433.⁴

Second, once the appellate court has determined that it...