Class Action Fairness Act of 2005: Early Judicial Interpretations (CRS Report for Congress)
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| Release Date |
July 3, 2006 |
| Report Number |
RL33507 |
| Report Type |
Report |
| Authors |
Paul Starett Wallace, Jr., American Law Division |
| Source Agency |
Congressional Research Service |
Summary:
On February 18, 2005, President Bush signed into law the Class Action Fairness Act (CAFA),
P.L.
109-2 , amending Title 28 of the U.S. Code. The Act extends the reach of federal diversity
jurisdiction over state law class actions. Congress wanted to correct a provision in federal
jurisdiction law that prevented many class actions that were national in scope from being litigated
in federal courts by making it more difficult for plaintiffs' counsel to defeat diversity jurisdiction.
Second, CAFA imposes new requirements on the settlement of class actions.
CAFA applies to class actions commenced on or after the date of enactment. Much of the early
CAFA case law has held that actions are "commenced" when filed rather than when removed. The
courts agree that the simple addition of new members to the class or a change in class representative
is insufficient; the courts are divided over whether the inclusion of additional defendants will satisfy
the requirements for CAFA coverage. The Seventh Circuit in Schorsch v. Hewlett-Packard,
Co. 417
F.3d 748, 751 (7th Cir. 2005), and the Tenth Circuit in Pritchett v. Office Depot, Inc. ,
420 F.3d 1090
(10th Cir. 2005), stated that amendments to class definitions do not necessarily commence a new
action under or trigger CAFA.
In a second area of early construction, the courts appear to be split over the question of burden
of proof, although the trend, at least in the Seventh and Ninth Circuits, seems to favor imposing the
burden upon the moving party; that is, the party seeking to remove a class action case from state
court to federal court under CAFA (ordinarily the defendant) bears the initial burden and thereafter
the burden falls to the party seeking remand back to state court under the CAFA exception
(ordinarily the plaintiff).
