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

CAFA’s Period Of Adjustment Continues…

Posted in Legal Publications and Articles

Kristen L. Wenger, Note, The Class Action Fairness Act of 2005: The Limits of Its Text and the Need for Legislative Clarification, Not Judicial Interpretation, 38 Fla. St. U. L. Rev. 679 (Spring 2011).

This article by Kristen L. Wenger states that CAFA requires a clarification from the lawmakers as opposed to an interpretation by the judiciary. The article begins by outlining the history of CAFA. She states that CAFA is the culmination of ongoing reform efforts of and legislative debates. Basically, the author summarizes that CAFA addresses the many criticisms of the way in which class actions existed until CAFA was passed. (Editors’ Note: If you are interested in all of the law review articles that concern CAFA, see the button to the right).

In her effort to understand the implications of CAFA, the author addresses the two schools of statutory interpretation as they apply to CAFA: textualists, who adhere to the plain language of CAFA, and purposivists, who consult the legislative history in order to ascertain Congress’s intent and purpose to resolve any ambiguous provisions.

The author notes that although class actions were originally intended for civil rights litigants to use in combating segregation, courts transitioned from hostility and skepticism to greater acceptance for certifying classes with claims that were well outside that initial scope. The author notes that in 1966, the Congress brought a vast change to Fed. R. Civ. P. 23, by introducing the numerosity, commonality, typicality, and adequacy along with predominance and superiority requirements for putative class to fulfill, which made it difficult to sustain class actions in the federal court. This amendment gave rise to an increased amount of large, multistate class action cases, which grew out of the amendments’ innovative and expanded version of class actions based on common issues of law and fact. This mutation of class action claims along with a widespread increase in the abusive practices of the parties and the lawyers served as a catalyst for a renewed demand for mass tort reform.

These lead to the passing of the “Class Action Fairness Act of 2005,” with an aim to (1) assure fair and prompt recoveries for class members with legitimate claims; (2) restore the intent of the framers of the United States Constitution by providing for federal court consideration of interstate cases of national importance under diversity; and (3) benefit society by encouraging innovation and lowering consumer prices.

Prior to the passage of CAFA, there were specific restrictions that applied if a defendant desired to remove a case from state to federal court. First, a defendant could not remove a case if the defendant was a resident of the state in which the claim was originally filed. Additionally, if there were multiple defendants, all the defendants had to consent to removal in order for it to be proper. Finally, Congress had issued an express, one-year time restriction on the removal of cases when the original jurisdiction would have been based on diversity, rather than a federal question. CAFA amended and essentially removed all three of these requirements, and as a result, a defendant could remove a case without the consent of other defendants.

As courts interpret statutes differently based on what school of thought one would subscribe to, these approaches certainly have significant differentiating characteristics, and both have garnered praise and criticism. From the Supreme Court to the lower courts, it is evident that judges have taken different approaches to comparable situations. The author observed that this is evident from the way courts have addressed the ambiguous provisions of CAFA thus far. The author remarks that the resulting inconsistent applications of CAFA should motivate Congress to enact corrective legislation.

The author notes that the disparity between the statutory language of CAFA and the relevant legislative history, has resulted in differing judicial interpretations of the jurisdictional provisions. A corrective measure by Congress to specifically allocate the burden of proof would alleviate this dilemma. Courts would then be able to consistently apply and utilize CAFA’s provisions in order to further the stated purposes articulated by Congress.

The author concludes that in order for courts to fulfill Congress’s stated purposes behind fairness and efficiency of CAFA, they need to receive proper guidance through clear and unambiguous statutory language. Among the clarifications that the author seeks, include amending the diversity jurisdiction statute to specifically place the burden of proof for federal diversity jurisdiction on either the removing party or the party seeking remand to state court. According to the author, courts must be provided with definitive criteria regarding their duty in determining whether a settlement is fair, reasonable, and adequate, along with what the term coupon encompasses in order to comply with CAFA’s intent to prevent the abusive practices of unscrupulous attorneys. The author, however, signs off by stating that aside from these glitches, CAFA has been fairly successful.