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CAFA Law Blog

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

Local Controversy Exception Cannot Be Read To Create A Jurisdictional Loophole To Defeat Federal Jurisdiction

Posted in Case Summaries

Davenport v Lockwood Andrews & Newman et al., 2017 WL 1457945 (6th Cir. April 25, 2017).

In reversing the United States District Court for the Eastern District of Michigan’s (the “District Court”) order granting the plaintiffs’ motion to remand, the United States Court of Appeals for the Sixth Circuit (the “Sixth Circuit”) found that the Class Action Fairness Act (“CAFA”) was not to be read narrowly, but as a broad grant of jurisdiction in interstate class actions. Furthermore, the Sixth Circuit found CAFA’s local controversy exception was not to be read to create a jurisdictional loophole by which a plaintiff could defeat federal jurisdiction.

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Proposal for a Bellwether-Trial Process Amounts to a Proposal to Try Their Claims Jointly Only When Bellwether Trial Has Preclusive Effect on the Plaintiffs in the Other Cases

Posted in Case Summaries

Dunson v. Cordis Corporation, 854 F.3d 551 (9th Cir. 2017)

In this action, while affirming the judgment of a district court granting the plaintiffs’ motion to remand, the Ninth Circuit found that to constitute a trial in which the plaintiffs’ claims are “tried jointly” for purposes of § 1332(d)(11)(B)(i), the results of the bellwether trial must have preclusive effect on the plaintiffs in the other cases, as well. Continue Reading

District Court Holds Nonbinding Bellwether Trial not a Joint Trial under CAFA’s Mass Action Provision

Posted in Case Summaries

Dunson v. Cordis Corporation, 2016 WL 5335551 (N.D. Cal. Sept. 23, 2016).

A district court in California remanded actions consolidated for purposes of pretrial discovery and formation of a bellwether trial process, finding the request for a nonbinding bellwether trial did not meet the joint trial requirement of CAFA’s mass action provision. Continue Reading

“The Significant Defendant” Element Is A Narrow Exception Carefully Drafted To Ensure That It Does Not Become A Jurisdictional Loophole

Posted in Case Summaries

Atwood v. Peterson, No. 4:15-cv-00305 (E.D. Ark. Sept. 10, 2015).

The plaintiff brought a putative class action against Walgreen Co. (“Walgreens”) and two of its district managers (“DMs”) in state court alleging violation of Ark. Code Ann. § 4-75-501(a)(2) which makes it unlawful to willfully refuse purchasers all rebates and discounts which are granted to other purchasers, for cash, of like quantities of such manufactured products.

Beginning in September 2012, Walgreens began offering discounts to its customers who enroll in, and use, its Balance Rewards Card program. Customers who do not enroll in, or use, the Balance Rewards program are not eligible for the same discounts. The plaintiff alleged that this practice is contrary to § 4-75-501(a)(2). While Walgreens was incorporated in Illinois, its DMs are citizens of Arkansas. The plaintiff asserted that along with Walgreens, the DMs were personally liable for violation of the statute because they were “persons” engaged in the sale of a manufactured product, “had primary responsibility” for the discharge of the duties to comply with the statute, and recklessly performed or omitted to perform those duties.

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CFPB issues new Rule banning arbitration clauses pertaining to class actions

Posted in Around the Blogosphere

On July 10, 2017, the CFPB issued a press release entitled “CFPB Issues Rule to Ban Companies From Using Arbitration Clauses to Deny Groups of People Their Day in Court.” The new Rule prohibits financial contracts from having arbitration clauses with class action bans. The new rule essentially restores consumer class actions. Here is the CFPB’s video on the new Rule.   The full press release states:

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Supreme Court denies review of remand order surrounding Flint water treatment plant class

Posted in Case Summaries

The CAFA Law Blog previously analyzed the Sixth Circuit opinion in Mason, et al., v. Lockwood, Andrews & Newman (Nov. 16, 2016) surrounding the Flint, Michigan water treatment plant. See the CAFA Law Blog analysis here.  In that opinion, the Sixth Circuit affirmed the district court’s order remanding the case based on CAFA’s local controversy exception.  On June 12, 2017, the United States Supreme Court denied certiorari.  This particular class action, alleging the engineering firm didn’t protect Flint, Michigan residents from lead contamination, will remain in state court.

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Defendants were not Significant Defendants under CAFA’s Local Controversy Exception to Warrant Remand

Posted in Case Summaries

Grosshart v State Farm Mutual Automobile Insurance Co., 2016 WL 5661526 (W.D. Mo. Sept. 29, 2016).

In an action brought against an insurance company and its claims representatives, the United States District Court, Western District of Missouri (the “District Court”) found the claims representatives were not significant defendants under the Class Action Fairness Act’s (“CAFA”) local controversy exception because each claim representative would have had contact with only a few of the class members. Accordingly, the District Court retained jurisdiction over the action, and it denied Plaintiff’s remand motion.

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Post Removal Amendments Can be Considered in a Motion for Remand, if the Amendments Merely Clarified the Issues Pertaining to Federal Jurisdiction under CAFA

Posted in Case Summaries

Broadway Grill Inc v Visa Inc., 2016 WL 5390415 (N.D. Cal. Sept. 27, 2016).

Plaintiff Broadway Grill, Inc. (“Broadway”) brought an action against defendants Visa Inc., Visa International Service Association, and Visa U.S.A. Inc. (collectively, “Visa”), based on alleged antitrust violations in setting of interchange fees that were imposed on merchants who accepted Visa-branded credit cards.

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District Court Follows Arbuckle in Determining that CAFA’s “Local Controversy” Exception Does Not Apply Where Ambiguities in Class Definitions Exist

Posted in Case Summaries

Municipal Water Authority of Westmoreland County v CNX Gas Co L L C , 2016 WL 5025752 (W.D. Pa. Sep. 20, 2016).

In  this case the U.S. District Court for the Western District of Pennsylvania (“District Court”) denied a plaintiff’s motion to remand determining that the plaintiff failed to establish the local controversy exception CAFA.

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Eight Circuit Upholds Class Certification, Grant of Summary Judgment, And Holds Fee-Shifting Provision Applies to Class Action

Posted in Case Summaries

McKeage v. TMBC, LLC, 2017 WL 562456 (8th Cir. 2017).

In an action removed under CAFA, the Eighth Circuit affirmed the District Court’s grant of summary judgment to the plaintiffs, but reversed the District Court’s determination of attorneys’ fee and remanded the action to consider whether the fee should be awarded on the trebled damages.

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