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Supreme Court To Hear (Standard Fire) Insurance Company’s Plea To Remove Class Action Lawsuit To Federal Court

September 5, 2012 12:28 PM | Posted by Roberts, Joshua | Print this page

Standard Fire removed the case from state court to a more business-friendly federal court, citing the Class Action Fairness Act of 2005, which allows defendants in class-action lawsuits to transfer disputes involving more than $5 million to federal court.  However, in an effort to remain in state court, Knowles promised to seek less than the $5 million jurisdictional minimum for him and all other similarly situated homeowners.  Given such a promise, the federal court remanded the action back to the potentially more plaintiff-friendly state court.

The following question is being presented to the Supreme Court:

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 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?

As always, Carlton Fields will keep you posted with the progress and outcome of this class action appeal.