28 USC 1332

This is the final salvo in the posts on the Class Action Fairness Act of 2005 series of posts. They published the final version of the law on 15 April (happy tax day!). This is an attempt to figure out what's changed.

28 USC 1332, which controls when many cases can go into federal court, has changed somewhat. Most of the changes are in 1332(d), dealing with class actions. There are two things here, "class actions" and "mass actions".

For class actions the basic requirements are that:

• you have at least 100 people in the class (1332(d)(5)(B))
  
• the amount in controversy is now $5,000,000 (1332(d)(2))
  
• to get that amount, you aggregate the claims of both named and unnamed plaintiffs (1332(d)(6))
• you must meet at least minimal diversity requirements (at least one named or unnamed plaintiff is from a different state from any defendant)

If so, D can try to remove it. However, there are some things that'll still keep it out of federal court.

If 1/3 to 2/3 of the named and unnamed plaintiffs are from the state where the action's been filed, the district court has discretion to decline jurisdiction based on analyzing some factors:

• is it a matter of national or interstate interest
• which state's law governs
• did the plaintiffs plead the action to try to avoid federal jurisdiction
• did they sue in a forum with a special connection to the plaintiffs, defendants, or harm
• does a substantially large fraction of the plaintiffs come from this state
• have the same people filed a similar class action within the last 3 years

If 2/3 or more of the named and unnamed plaintiffs, and all the primary defendants, are citizens of the state where the action's been filed, the district court must decline jurisdiction.

The district court must also decline jurisdiction (1332(d)(4)(A)) if

• 2/3 or more of the named and unnamed plaintiffs are from the state where the action's been filed, AND
  
• there's at least one "significant" defendant from the state where the action's been filed (where "significant" means the plaintiffs want significant relief from the defendant and the defendant's alleged conduct is a significant basis of the claim), AND
  
• no-one's filed a similar class action against these defendants in the last 3 years

Mass actions are cases where they consolidate the claims of 100 or more people on the grounds of common questions of law or fact. For mass actions, the individual plaintiffs have to meet the old $75,000 amount-in-controversy value. Mass actions are also removable, with some exceptions. (See the statute for details.)