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

New Study Questions Whether CAFA Has Had an Effect

Posted in Legal Publications and Articles

The CAFA Law Blog is pleased to publish a Guest Post.  Today’s Guest Post is by Neil J. Marchand, a brilliant third year student at George Washington University Law School.  Based upon Neil’s insightful post and law review article, it is clear that Neil enjoys studying CAFA in his free time between law school classes.  Please welcome Neil J. Marchand.

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In a recent study on CAFA’s effects on Michigan’s state and federal courts, empirical data raises the question of whether CAFA has had any direct effect on litigation. 

In an article entitled “Class Action Activity in Michigan’s State & Federal Courts” currently available data on litigation in Michigan’s state and federal courts was used to analyze the plaintiff’s choice of forum for class action litigation and CAFA’s effects on Michigan courts. 

The study found that CAFA may have failed to relocate any category of class actions to the federal courts; however, CAFA may have had an indirect effect on class action litigation by encouraging plaintiffs who file contract class actions to allege more claims based on federal law.

The study also offered empirical support for the proposition that plaintiffs prefer to file class actions based on federal substantive law in federal court and state substantive law in state court. The study showed that this forum selection was disrupted by the presence of a non-resident party because diversity of citizenship provided an alternate basis for federal jurisdiction.

Finally, data on class certification rates suggested that plaintiffs in state and federal consumer protection cases use class action procedure for their individual gain.

A full text of the article can be viewed by clicking here