Abstract: I. Introduction 649II. CAFA and Our Class Action Federalism 654III. Shady Grove 659A. Forum Shopping 665B. Control, Conflict, and Collision 666C. Substantive Rights and the REA 668IV. After Shady Grove: The Continuing Role of State Class Action Law in Federal Court 671A. When the Conflict Might Not Be Necessary 672B. Substantive Rights and the REA 679C. The Lower Federal Courts After Shady Grove 683V. Conclusion 688I. IntroductionWas the Class Action Fairness Act (CAFA) really about fairness? If so, fairness to whom?* 1However one answers these questions, one of CAFA's principal means to accomplishing its ends was forum shopping. Forum shopping is a charge most commonly leveled against plaintiffs. As the masters of their complaint,2 plaintiffs decide where to file their case, and they may craft their claims with an eye toward keeping the case in their most desired forum. Forum shopping can be a two-way street, however. Procedural devices often enable defendants to change the plaintiffs' initial choice of forum-removal from state court to federal court,3 transfer of venue,4 dismissal for lack of jurisdiction,5 or forum non conveniens dismissal.6 Such countermoves by a defendant are also forms of forum shopping.7According to its legislative history, CAFA was particularly concerned with the following scenario: plaintiffs choose to file a class action in state court-particularly a state court that is perceived to be more willing to certify class actions than its federal counterpart.8 Defendants, who prefer the federal approach to class certification, seek to remove the class action to federal court. Which side will succeed in getting their desired forum ultimately depends on the intricacies of federal jurisdiction. One of CAFA's primary objectives was to expand the universe of cases where defendants would win these forum-shopping battles; it did so by creating a new form of diversity jurisdiction and eliminating other obstacles to removing state court class actions to federal court.9 Once in federal court, class certification could be decided by federal judges pursuant to federal law, rather than by state judges pursuant to state law.Standard Fire Insurance Co. v. Knowles'0-a CAFA case recently decided by the Supreme Court-illustrates all too vividly the lengths to which plaintiffs and defendants will go when it comes to this sort of forum shopping. The plaintiffs state-court complaint in Standard Fire voluntarily refused to seek the maximum amount of damages that the class might receive under the governing law, stipulating that the class would not seek damages in excess of $5 million. That figure, of course, is the threshold that would have enabled the defendant to remove under CAFA.12 The Standard Fire defendant, who wished to be in federal court, argued that absent class members should not be bound by the waiver-which in turn would bring the amount-in-controversy above CAFA's threshold for federal jurisdiction.14 And the defendant succeeded. The Supreme Court unanimously held that the named plaintiff's stipulation could not bind the absent class members and therefore could not prevent CAFA removal.15Did the defendant in Standard Fire truly wish to pay the class more than it was asking for? Of course not. The defendant's calculus was that, in federal court, there would be a lower likelihood that a class action would be certified at all, which would take the potential for a large aggregated judgment entirely off the table. …
Publication Year: 2013
Publication Date: 2013-10-01
Language: en
Type: article
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