STANDARD FIRE V. KNOWLES
Issue: Class Action Standards
Court: U.S. Supreme Court
Term: October 2012
Oral Argument: January 2013
Opinion: Justice Breyer
Lower Court: U.S. District Court, W.D. Arkansas
When a named plaintiff attempts to defeat a defendant's right of removal under the Class Action Fairness Act of 2005 by filing with a class action complaint a "stipulation" that attempts to limit the damages he "seeks" for the absent putative class members to less than the $5 million threshold for federal jurisdiction, and the defendant establishes that the actual amount in controversy, absent the "stipulation," exceeds $5 million, is the "stipulation" binding on absent class members so as to destroy federal jurisdiction?
The RLC joined another trade association in asking the U.S. Supreme Court to invalidate plaintiff's bars' attempts to circumvent the Class Action Fairness Act (CAFA) and prevent removal to deferral court of class actions brought in state court by stipulating to damages below the $5 million standard.
The Court held that stipulations of putative class members before the class is certified cannot bind the rest of the class and, therefore, the district court should have ignored the stipulation.
Procedural History and Case Documents: