Seventh Circuit Holds CAFA Jurisdiction Sticks Even After Class Certification Is Denied
The Class Action Fairness Act allows for the removal of "any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of procedure." But what happens where, once the case is removed to federal court, the federal judge determines the case cannot properly be a class action? Should it be remanded to state court?
The Seventh Circuit recently answered this question with a resounding "no," thereby joining the First and Eleventh Circuits in concluding that "federal jurisdiction under the Class Action Fairness Act does not depend on certification." Cunningham Charter Corp. v. Learjet, Inc., 2010 WL 199627, at *2 (7th Cir. Jan. 22, 2010).
The court's conclusion is supported by the text of CAFA, which confers jursidiction on actions filed as class actions. And it also is supported by the purpose of the statute, which is to prevent multistate class actions from being trapped in state court:
For if a state happened to have different criteria for certifying a class from those of Rule 23, the result of a remand because of the federal court's refusal to certify the class could be that the case would continue as a class action in state court. That result would be contrary to the Act's purpose of relaxing the requirement of complete diversity of citizenship so that class actions involving incomplete diversity can be litigated in federal court.
Our conclusion vindicates the general principle that jurisdiction once properly obtained is not lost by developments after a suit is filed, such as a change in the state of which a party is a citizen that destroys diversity.
Id.
As a result of Cunningham Charter, a defendant in a CAFA -removed case need not fear that it will be thrust back into state court once it wins on the issue of class certification. At least in the Seventh Circuit.
