Class Action Fairness Act: More on the New FJC Data

    by Brian Wolfman

    I am surprised that, as noted in Deepak Gupta's recent post, Tom Willging is surprised that The Federal Judicial Center (FJC) preliminary data on the Class Action Fairness Act (CAFA) show that CAFA had its intended effect of moving class actions of the kind previously litigated in state court to federal court (either via original filing or removal).  That result seemed inevitable because, under CAFA, in most substantial consumer class actions where there’s a diverse defendant, there’s nothing a plaintiff can do to keep the case out of federal court.  So, I wouldn't have expected it to take much time for the law to kick in; one would expect to see its effect almost immediately.  The more important question, I think, is whether the law will affect case outcomes (class certification, settlements, other legal rulings). On that question, it’s too early to tell, and the empirical evidence will be tougher to collect and evaluate.  It seems like difficult research, among other reasons, because seemingly there will be no significant group of similar post-CAFA state court cases to which the post-CAFA federal cases can be compared.  I look forward to seeing what Tom and his colleagues at the FJC produce in that regard.

    The FJC CAFA data remind me of something regarding the reaction of class action lawyers and academics to CAFA.  Because CAFA litigation has naturally revolved around defining CAFA’s so-called “exceptions” to federal jurisdiction (and some ancillary questions, such as defining the time for taking a CAFA permissive appeal), so has the legal commentary on CAFA.  Journal articles and seminars abound on these topics.  That phenomenon has, I think, created the illusion that, under CAFA, there is a broad range of cases where there will be legitimate disputes about CAFA’s meaning and coverage.  That’s really not so.  The litigation is on the margins.  The great majority of large consumer class actions, whether national or single-state, will now be litigated in federal court, just as CAFA’s proponents envisioned.  At the least, class action defendants will have the federal court option.  And since all the defendants desired from CAFA was forum choice, they've gotten what they wanted.  Again, whether they get the substantive results that they wanted remains to be seen.