Class Action Fairness Act

Consumer products companies are frequently the targets of nationwide class actions, and a common defense strategy includes removing these cases to federal court under the Class Action Fairness Act of 2005. “CAFA” provides federal jurisdiction over certain class actions where the amount in controversy  exceeds $5 million. See 28 U.S.C.  §§ 1332(d)(2), (5). On April 7, 2014, the Supreme Court granted review of a 10th Circuit case that was removed under CAFA and then remanded based on a lack of evidence supporting the amount in controversy. The Supreme Court, thus, appears poised to clarify what is required of a defendant removing a case under CAFA (or on other grounds for that matter).Supreme Court

The case is Dart Cherokee Basin Operating Co., LLC v. Owens, 730 F.3d 1234 (10th Cir. 2013), in which the Tenth Circuit declined to overturn a Kansas District Court opinion granting a motion to remand a case removed to federal court by Dart Cherokee Basin Operating Co. under CAFA. Although Dart’s Notice of Removal explained why the Plaintiff’s royalty claims raised the amount in controversy above $5 million, the District Court granted the Plaintiff’s motion to remand because the Notice of Removal was not supported by evidence, “such as an economic analysis … or settlement estimates” supporting Dart’s amount in controversy estimate.  Id. at 1234. When Dart proffered supporting evidence in opposition to the motion to remand, the Court held that it was too late based on the requirement that removal papers are generally due within 30 days of the filing of the complaint.
Continue Reading Supreme Court to Address Requirements for Class Action Removal