THE FIFTH CIRCUIT ADOPTS A PRESUMPTION IN FAVOR OF FEDERAL JURISDICTION IN CLASS ACTIONS REMOVED UNDER CAFA

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CAFA extends federal jurisdiction to certain mass action and class action lawsuits where

  • the proposed class is at least one hundred (100) members, minimal diversity exists between the parties,
  • the amount in controversy is greater than $5,000,000, and
  • the primary defendants are not states, state officials, or other government entities. 28 USC §1332(d)(2), (5).

There are, however, exceptions to CAFA jurisdiction that empower a district court to remand a case to state court, particularly local controversies “…that uniquely affect a particular locality to the exclusion of all others”.

Remands of mass actions and class actions defeat the purpose of CAFA removals, and the Fifth Circuit has recently made remands under CAFA-exceptions more difficult. In Arbuckle Mountain Ranch of Texas, Inc. v. Chesapeake Energy Corp., 810 F.3d 335 (5th Cir. 1/7/2016), the Fifth Circuit joined other circuits in establishing a presumption in favor of retaining federal jurisdiction under CAFA. See, 28 USC § 1332(d).

The Fifth Circuit held that:

…When deciding whether an exception to CAFA removal applies, we adopt the general approach from sister circuits recognized in Opelousas. If the applicability of an exception is not shown with reasonable certainty, federal jurisdiction should be retained.”

Arbuckle, 810 F.3d at 338. Based on the ruling in Arbuckle, supra, CAFA jurisdiction is presumed and all doubts about the exercise of CAFA jurisdiction over a case based upon the application of an exception under CAFA must be resolved in favor of the federal court retaining jurisdiction.

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