The U.S. Supreme Court’s unanimous seven-page ruling Tuesday in Standard Fire v. Knowles proves that sometimes the best way to get through a thorny briar patch is with a machete. The court cut through incredibly complex jurisdictional arguments and what-if scenarios to reach the essential intent of the Class Action Fairness Act, a law passed in 2005 to assure that big-money class actions are litigated in federal court. And according to the Supreme Court’s decision, name plaintiffs and their lawyers cannot evade federal court jurisdiction by simply stipulating that their damages fall beneath CAFA’s $5 million threshold.
The ruling, written by Justice Stephen Breyer, should put an end to a tactic by which class action lawyers have managed to keep their cases in plaintiff-friendly state courts, according to Theodore Boutrous of Gibson, Dunn & Crutcher, who argued for the insurer Standard Fire.
A very important issue, analyzed with typical perspicacity by Alison Frankel
