Michelle A. Liguori

Section 7A-27(a)(4) of the North Carolina General Statutes gives parties the right to an immediate appeal to the North Carolina Supreme Court of “decision[s] regarding class certification.”  The statute facilitates the development of a body of case law to guide class certification decisions by North Carolina trial courts and advocacy by class action practitioners. The Supreme Court recently added to that body of case law with Empire Contractors, Inc. v. Town of Apex, No. 322A24 (Dec. 12, 2025). Justice Dietz wrote the opinion of the Court.

(For blog posts on two other North Carolina Supreme Court class certification decisions, see here (Jackson v. Home Depot U.S.A., Inc. (Aug. 2025), also authored by Justice Dietz)), and here (Dewalt v. Hooks (Nov. 2022)).

The Empire majority opinion is only fourteen pages.  It’s a straightforward application of the predominance requirement: that “class certification is appropriate only when there are common issues of law or fact that predominate over issues affecting only individual class members.” The decision is notable for three reasons.

First, Empire is another example of the North Carolina Supreme Court holding trial courts, and class action plaintiffs, to the requirements for class certification. 

In Empire, the plaintiffs claimed that the Town of Apex was acting contrary to its statutory authority and the North Carolina Constitution by charging developers “recreation fees” that the Town said it would use to create or improve nearby recreation spaces. The plaintiffs sought declaratory judgments that the Town’s conduct violated applicable statutes and the state constitution, and return of the fees paid by the putative class members. 

Applicable statutes allowed the Town to charge recreation fees that did not exceed fair market value of the developed properties. The plaintiffs claimed, among other things, that the Town’s fee assessments did exceed the fair market values of the properties and that they were unconstitutional because they were not proportional to the impact of the developments on nearby services.

The trial court had found that each of these issues was a common one that supported class certification. This was error, the North Carolina Supreme Court said, because the trial court “never addressed the highly individualized issues that many of these claims present.” For example, determining the fair market value of each property would be “an intensely individualized, fact-specific endeavor.” Likewise, determining whether the recreation fees charged to each developer were “proportional” would require a “fact-intensive” analysis of the “alleged impact of [each] development on the surrounding town services.”

Second, Empire lays out the standards of review that apply to various aspects of a trial court’s class certification analysis. 

The “general standard of review” is abuse of discretion, because the “trial court’s ultimate decision to certify the class is a discretionary one.” But, the trial court only has the discretion to certify a class if certain requirements are met. 

Generally, the court reviews a trial court’s determination on the requirements for class certification de novo. Requirements reviewed de novo include that:

• There are common issues of law or fact; and
• Common issues predominate over individualized ones.

The trial court’s determinations on the other six requirements for class certification—adequacy of the class representative, the lack of conflicts of interest among the class, a genuine personal interest of the class representative, the class representative’s ability to adequately represent class members outside the jurisdiction, numerosity of the class members, and the ability to provide sufficient notice to the class—are also reviewed de novo.

Other aspects of a trial court’s class certification analysis are reviewed for abuse of discretion, however, including:

• How notice is to be given; and
• Whether the class action mechanism is a superior method of resolving the dispute between the putative class members and the defendant.

Third, in Empire, the Supreme Court sua sponte flagged an issue for further consideration on remand that class action practitioners may wish to consider in other cases as well:  claim splitting. 

In vacating the Empire class certification order, the Supreme Court suggested that class certification might be permissible on some of the plaintiffs claims (or some aspects of those claims), but not all of them.  The Court noted the “common law rule against claim-splitting,” “which prohibits multiple lawsuits based on claims all stemming from a single wrong.” 

The Court explained that, under the “claim-splitting rule,” if the class members obtained a judgment on some of their claims, they may be precluded from pursuing the remaining claims in a second lawsuit. Or, if some class members promptly pursued individual claims and obtained a judgment against the defendant before resolution of the class claims, they might “creat[e] preclusion problems within the class.” These complications could render a class action an inferior method of resolving the dispute between the class members and the defendant.  Because the Supreme Court did not have the benefit of the parties’ briefing on these issues, the appellate court left it to the trial court to resolve them on remand. 

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In addition to highlighting the predominance requirement for class certification and expounding somewhat elusive standards of review for class certification appeals, Empire may be a Christmas present for defense counsel in that case and other putative class actions with an available claim-splitting defense.