The Retail Litigation Center
(RLC) joined the U.S. Chamber of Commerce in an amicus curiae brief to the Supreme Court of
the United States asking the Court to reverse the Eighth Circuit Court of
Appeals decision in The
Standard Fire Insurance Company v. Greg Knowles, which condoned the
plaintiff’s bar’s questionable procedural tactics to thwart removal of
significant class action cases from state to federal court.
In this case, the named
plaintiff of an as unyet uncertified class stipulated that the damages awarded
in a potentially enormous class action case would not exceed $5 million in
order to ensure that the case was heard by the state trial court instead of
removed to the federal court, as permitted under the Class Action Fairness Act
of 2005 (CAFA). CAFA was expressly enacted to ensure that federal court
procedural protections would be available for significant class action cases
and to prevent class-action plaintiffs from flocking to so-called “magnet”
state jurisdictions that often certify classes with little scrutiny. Not only
does the practice of stipulating damages defeat the express purposes of CAFA,
it impinges on the due process rights of members of the unformed class to
receive the proper remuneration for any claims that are ultimately justified.
“This case presents the perfect
opportunity for the Supreme Court to reject the plaintiffs bar’s tactics of
stipulating to a level of damages that they would never accept with the sole
purpose of circumventing CAFA,” said RLC president Deborah
White. “Allowing class
representatives to pledge they will seek damages less than $5 million does not
ensure they will not accept a larger amount – in fact in the cases we have
reviewed, plaintiffs routinely demand orders of magnitude more in order to
settle the case once the state court has certified the class based in part on
the low damages stipulation that was needed in order to keep the case in state
According to the brief:
“The Eighth Circuit’s
rule is inconsistent with CAFA’s purposes. It undermines CAFA’s goal of federal
supervision of class actions; strips absent class members of federal
protections Congress intended to provide them; and encourages the magnet
jurisdictions Congress meant to curtail.”
The full brief can be found here.
MoloLamken, LLP attorneys
Michael Pattillo, Andrew Bernie, and Justin Ellis authored the brief.
The RLC submitted this brief
along with the Chamber of Commerce of the United States.
The Retail Litigation Center
is a public policy organization that identifies and engages in legal
proceedings which affect the retail industry. The RLC, whose members
include some of the country’s largest retailers, was formed to provide courts
with retail industry perspectives on significant legal issues, and highlight the
potential industry-wide consequences of legal principles that may be determined
in pending cases.