A little over three years ago, in March 2006, the Pennsylvania Superior Court held, in the case of Basile v. H&R Block, that a defendant who had received the ultimate relief it sought — entry of summary judgment in its favor in a class action — was nonetheless required to file a cross-appeal if it wished to preserve its right to challenge the class certification order. In a prior appeal in Basile, the Superior Court had vacated the entry of summary judgment and sent the case back to the trial court, which subsequently granted Block’s motion to decertify the class. On the second appeal to the Superior Court, that court held (in a 6-3 en banc opinion) that Block’s decertification motion should not have been granted because, by not challenging the certification order in a cross-appeal in the prior appeal from the summary judgment order in Block’s favor, Block had waived its right to challenge the certification order.
In an article for The Legal Intelligencer (March 22, 2006), my colleague Carl Solano and I noted that the Superior Court’s ruling “puts appellate practitioners in a quandary — do they follow the cardinal rule of appellate practice that only an aggrieved party can file an appeal? Or, do they file protective cross-appeals from every adverse ruling, even after prevailing on the ultimate merits of a case, in order to preserve the right to challenge those subsidiary rulings that went against them?” Solano and I contended that the Pennsylvania Supreme Court should grant review of the case “and once again reaffirm that prevailing parties need not file an appeal or cross-appeal from subsidiary rulings when they do not seek to expand the relief they have obtained in the trial court.” Now, in a unanimous opinion issued June 23, the Pennsylvania Supreme Court has done just that.
The Supreme Court had previously vacated the Superior Court’s 2006 opinion in Basile in a per curiam order that required the Superior Court to “specifically discuss” two Pennsylvania Rules of Appellate Procedure, two relevant precedents, and “and any other related precedent.” In a 2007 opinion following the remand, the Superior Court complied with the Supreme Court’s order, but it reaffirmed its prior holding.
Block once again petitioned for allowance of appeal to the Supreme Court, which granted the petition and, earlier this week, issued a short, 8-page opinion reversing the Superior Court. In its opinion, written by Justice Jane Cutler Greenspan, the court initially held that, as a factual matter, the Superior Court simply was wrong: Block had cross-appealed on the certification issue when Basile appealed the grant of summary judgment to Block. Moreover, the court held, “the Superior Court incorrectly applied Pennsylvania law by holding that Block was required to file a cross-appeal on the class certification issue.” The court went on to conclude that, because Block was the prevailing party at the time of the earlier appeal, “it was not required to file a protective cross-appeal on the issue of class certification.”
Three of the five justices participating in the decision expressly joined the majority opinion. Two justices, (Thomas G. Saylor and Max Baer), while agreeing with the outcome of the case, concurred separately, on the ground that the court should consider taking its ruling a step further and prohibit protective cross-appeals. Saylor noted some of the complex issues involving waiver and judicial efficiency that could arise if cross-appeals were either entirely prohibited or permitted in some limited circumstances, but he reserved judgment on which solution would be best. Baer indicated in his concurrence that he joined the majority opinion, but he also advocated adoption of the position that “a non-aggrieved party should not be permitted, let alone required, to file a protective cross-appeal.”
As the concurrences by Saylor and Baer point out, the court’s decision in Basile does not definitively resolve the issue of prevailing parties filing protective cross-appeals. In correcting the Superior Court’s error, the Supreme Court has reaffirmed that only aggrieved parties need file an appeal or cross-appeal to avoid waiver of issues on appeal or in later proceedings in the same case. However, unless and until the court adopts the view of the concurring justices, prevailing parties likely will file protective cross-appeals (as Block in fact did in this case) when they believe it is in their interests to do so, though parties choosing not to do so no longer face the prospect of waiver, as they did under the Superior Court’s decision in Basile.
One interesting side note to the case: Two of the seven current justices on the Pennsylvania Supreme Court were members of the Superior Court’s en banc panel that decided Basile; both voted with the majority that held that Block had waived its right to appeal the certification order. Of course, neither of those Justices participated in the Supreme Court’s adjudication of the case, but it is interesting to note that the remaining five members of the Court had no qualms about reversing two of their current colleagues.
This posting is intended only to inform, not to provide legal advice; and readers should seek professional advice for specific applications of the information.
Bruce P. Merenstein
Schnader Harrison Segal & Lewis LLP