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CAFA Law Blog

Information, cases and insights regarding the Class Action Fairness Act of 2005

A Removing Defendant Can Use Over-inclusive Evidence to Establish the Amount in Controversy

Posted in Case Summaries

Scott v. Cricket Communications, LLC, 2017 WL 3197548 (4th Cir. July 28, 2017).

In this action, vacating a district court’s judgment, the Fourth Circuit found that the district court committed legal error by disregarding the defendant’s evidence of the amount in controversy as over inclusive, since a removing defendant can use over inclusive evidence to establish the amount in controversy, so long as the evidence shows that it is more likely than not that “a fact finder might legally conclude that” damages will exceed the jurisdictional amount.

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Once Citizenship Prerequisites Have Been Established, Courts Consider a Six-Factor Balancing Test when Determining Whether to Exercise the Discretionary-Remand Exception under CAFA

Posted in Case Summaries

Speed v. JMA Energy Co., 2017 WL 2547240 (E.D. Ok. June 13, 2017).

Once the court had determined that a sufficient number of the plaintiffs and the primary defendants were citizens all citizens of the state in which the suit had been brought, it weighed the remaining six factors under 28 U.S.C. § 1132(d)(3)(A)–(F) and decided in favor of remand because the claims related only to state law, the outcome of the litigation did not involve a “national interest,” and the class action had not been pleaded in a way that seeks to avoid federal jurisdiction.

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Federal Courts Have Jurisdiction Over All Claims if They Have Jurisdiction Over Some, and CAFA Doesn’t Support Claim-Splitting or Partial Remand of a Specific Remedy

Posted in Case Summaries

Chuang v. Dr Pepper Snapple, 2017 WL 2463951 (C.D. Cal. Jun 7, 2017).

In denying the plaintiff’s motion to remand, a District Court in California found that the presence of at least some claims over which the district court has original jurisdiction is sufficient to allow removal of an entire case, even if other claims alleged are ultimately beyond the district court’s power to decide. Further, the Court found that the plaintiff was not entitled even to a partial remand because the plaintiff was seeking not to remand a claim but to remand a specific remedy—injunctive relief—and neither the text of 28 U.S.C. § 1447(c) nor the policies underlying CAFA supported such claim-splitting. Continue Reading

Interest Payments Tied Solely To Delay In Paying Amounts In Controversy Insufficient To Establish CAFA Jurisdiction

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Whisenant v. Sheridan Production Co., LLC, 627 F. App’x. 706 (10th Cir. 2015)

This decision concerns the reversal of a denial of a motion to remand. Plaintiff brought a putative class action in Oklahoma state court against a natural gas production company, alleging that it failed to pay or underpaid royalties for natural gas wells. The defendant removed the action under CAFA.  The plaintiff filed a motion to remand, which the District Court denied.  Continue Reading

Failure to Allege Actual Damages Defeated a Putative Class Action against Wish.com

Posted in Case Summaries

Max Gerboc v Context Logic, Inc., 2017 WL 3497405 (6th Cir. Aug. 16, 2017)

Wish.com is run by the defendant ContextLogic, Inc. (“ContextLogic”).  The website works like a bazaar, where consumers can buy thousands of types of products, ranging from home goods to apparel. Plaintiff Max Gerboc (“Plaintiff”), one of those consumers, bought a pair of portable speakers for $27 from Wish.com.  Later, Plaintiff brought a putative class action before the Ohio state court alleging he had been tricked into buying $27 speakers because Wish.com had advertised them as marked down from $300.  He alleged he was given the impression the speakers were regularly priced at $300 and ContextLogic falsely represented a savings of approximately 90 percent off the regular price, in an effort to induce customers to purchase products from its website.

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Mass Action Should Contain 100 Or More Actual Named Plaintiffs; Not Just 100 Or More Named Or Unnamed Real Parties In Interest

Posted in Case Summaries

Liberty Mutual Fire Insurance Company v EZ-Flo International Inc., et al., Case No. 17-228 (C.D. Cal. May 3, 2017).

In granting the plaintiffs’ motion to remand holding that the purported mass action was not brought by 100 or more plaintiffs, a District Court in California found that the language “100 or more persons” in mass action provision of CAFA does not refer to “100 or more named or unnamed real parties in interest,” but rather to the actual named plaintiffs in the suit.

The plaintiffs, insurance companies acting as subrogees of their insureds, brought claims against the defendant concerning defects in the defendant’s water supply lines, which were used to transport water from a water supply pipe to a plumbing fixture. In the first action, two insurance companies acted as subrogees of one insured, and in a second action the other insurance-company plaintiffs acted as subrogees of 111 homeowners.  The Superior Court consolidated both cases but did not clarify whether the consolidation was for pretrial purposes only.  In January 2017, the plaintiffs filed their Second Amended Complaint (“SAC”), seeking monetary relief as subrogees for 145 homeowners for claims totaling $6,588,979.71.

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Federal Court Declines to Remand Action to State Court Based on Abstention After Determining it had Jurisdiction Over the Matter

Posted in Case Summaries

Papurello v State Farm Fire & Casualty Company, 144 F.Supp.3d 746 (W.D. Penn. Nov. 16, 2015).

In this action, the United States District Court, Western District of Pennsylvania (the “District Court”) denied the Plaintiffs Vincent and Linda Papurello’s (collectively, “Plaintiffs”) motion to remand finding Defendant State Farm Fire and Casualty Company (“Defendant”) clearly established diversity between the parties, and also showed that the class claims exceeded the Class Action Fairness Act’s (“CAFA”) jurisdictional threshold of $5 million.

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Post Filing Changes To The Nature Of Class Actions Filed In The Federal Courts Under CAFA Does Not Divest The Federal Courts Of Its Jurisdiction

Posted in Case Summaries

Wright Transportation Inc v Pilot Corporation, 841 F.3d 1266 (11th Cir. 2016).

The United States Court of Appeals for the Eleventh Circuit (the “Eleventh Circuit”) found that there was no distinction between the actions brought before a federal court asserting jurisdiction under the Class Action Fairness Act (“CAFA”), and the actions brought in the state court asserting federal jurisdiction under CAFA. The Eleventh Circuit, accordingly, reversed an order from the United States District Court for the Southern District of Alabama (the “District Court”) dismissing the plaintiff’s complaint as only the state law claims remained; finding that changes to the nature of the claims asserted in a lawsuit after asserting jurisdiction under CAFA, does not divest the District Court of its jurisdiction over such an action.

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Spirit of CAFA Law Encourages Exercising Supplemental Jurisdiction Over State Law Claims If A Federal Court Loses CAFA Jurisdiction Subsequent To Removal

Posted in Case Summaries

F5 Capital v Pappas, No. 16-530 (2d Cir. April 26, 2017).

In this action, while holding that the district court retained jurisdiction, the Second Circuit found that given that CAFA was the jurisdictional anchor for the complaint and that the evident purpose of CAFA was to expand federal jurisdiction over suits that met its requirements, it would be inconsistent with that purpose to interpret 28 U.S.C. § 1367(b) (grant of supplemental jurisdiction over state law claims) to keep the pendent claims out of federal court while allowing the class claims to proceed.

F5 Capital (“F5”), shareholder, brought a shareholder derivative action in the Supreme Court of the State of New York on behalf of Star Bulk Carriers Corp. (“Star Bulk”), alleging that individual members of Star Bulk’s board and affiliated entities improperly exploited their control over the corporation in entering into three separate self-dealing transactions, and asserting derivative and direct class action claims. The owner of F5, Hsin Chi Su, was a minority shareholder in Star Bulk and served in management positions.  After he and the defendant Petros Pappas, had a falling out resulting from a business dispute, the defendants worked to exclude Su from a leadership role at Star Bulk through several self-dealing transactions that F5 claimed harmed the corporation and its minority shareholders.

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