Attorney Charles Jerome Ware is renowned and consistently ranked among the best attorneys and legal counsellors in the United States. [GQ Magazine, The Washington Post, The Baltimore Sun, The Columbia Flier, USA TODAY, The Howard County Sun, The Anniston Star, The New York Times, et al.]
Std. Fire Ins. Co. v. Knowles, www.CharlesJeromeWare.com
The U.S. Supreme Court has ruled that a lead class action plaintiff's "stipulation" that the amount in controversy in the case is "less than $5 million" does not remove the case from the scope of federal class-action law.
In other words, federal courts are not bound by lead plaintiffs in proposed class actions who attempt to keep class-action cases in state courts by stipulating jurisdictional amounts (amounts in controversy) on their own that are less than the federal minimum amount in controversy of $5 million.
At issue in this case are provisions of the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. §§ 1332 (d)(2), (5) which give federal courts original jurisdiction in class actions when the aggregated amount in controversy exceeds $5 million and there are more than 100 class members.
Lead plaintiff Greg Knowles had filed his suit in Miller County, Ark., and stipulated that the amount in controversy was less than $5 million. His would-be class action against Standard Fire Insurance Co. had alleged the insurer underpaid claims for hail damage. According to the complaint, “hundreds, and possibly thousands” of people in Arkansas had similar claims.
A federal court considering Knowles' bid to send the case back to state court had found that the amount in controversy would have exceeded $5 million, absent the stipulation.
The Supreme Court has ruled that Knowles’ stipulation does not remove the case from the scope of the federal class-action law. “The stipulation at issue here can tie Knowles’ hands, but it does not resolve the amount-in-controversy question in light of his inability to bind the rest of the class,” Justice Stephen Breyer wrote. "For this reason, we believe the district court, when following the statute to aggregate the proposed class members’ claims, should have ignored that stipulation."
SYLLABUS
SUPREME COURT OF THE UNITED STATES
STANDARD FIRE INSURANCE CO. v. KNOWLES
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE EIGHTH CIRCUIT
No. 11–1450. Argued January 7, 2013—Decided March 19, 2013
The Class Action Fairness Act of 2005 (CAFA) gives federal district
courts original jurisdiction over class actions in which, among other
things, the matter in controversy exceeds $5 million in sum or value,
28 U. S. C. §§1332(d)(2), (5), and provides that to determine whether
a matter exceeds that amount the “claims of the individual class
members must be aggregated,” §1332(d)(6). When respondent
Knowles filed a proposed class action in Arkansas state court against
petitioner Standard Fire Insurance Company, he stipulated that he
and the class would seek less than $5 million in damages. Pointing
to CAFA, petitioner removed the case to the Federal District Court,
but it remanded to the state court, concluding that the amount in
controversy fell below the CAFA threshold in light of Knowles’ stipu-
lation, even though it found that the amount would have fallen above
the threshold absent the stipulation. The Eighth Circuit declined to
hear petitioner’s appeal.
Held: Knowles’ stipulation does not defeat federal jurisdiction under
CAFA. Pp. 3−7.
STANDARD FIRE INSURANCE CO. v. KNOWLES
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE EIGHTH CIRCUIT
No. 11–1450. Argued January 7, 2013—Decided March 19, 2013
The Class Action Fairness Act of 2005 (CAFA) gives federal district
courts original jurisdiction over class actions in which, among other
things, the matter in controversy exceeds $5 million in sum or value,
28 U. S. C. §§1332(d)(2), (5), and provides that to determine whether
a matter exceeds that amount the “claims of the individual class
members must be aggregated,” §1332(d)(6). When respondent
Knowles filed a proposed class action in Arkansas state court against
petitioner Standard Fire Insurance Company, he stipulated that he
and the class would seek less than $5 million in damages. Pointing
to CAFA, petitioner removed the case to the Federal District Court,
but it remanded to the state court, concluding that the amount in
controversy fell below the CAFA threshold in light of Knowles’ stipu-
lation, even though it found that the amount would have fallen above
the threshold absent the stipulation. The Eighth Circuit declined to
hear petitioner’s appeal.
Held: Knowles’ stipulation does not defeat federal jurisdiction under
CAFA. Pp. 3−7.
Attorney Charles Jerome Ware is renowned and consistently ranked among the best attorneys and legal counsellors in the United States. [GQ Magazine, The Washington Post, The Baltimore Sun, The Columbia Flier, USA TODAY, The Howard County Sun, The Anniston Star, The New York Times, et al.]
The national law firm of Charles Jerome Ware, P.A., Attorneys and Counsellors, is a premier Civil litigation and Criminal Defense firm headquartered in Maryland and Washington, D.C. We are: "Still working. Still committed. Still here to make a difference."
[The Standard Fire Insurance Company v. Greg Knowles, 568 U.S._(2013); SCOTUS; March 19, 2013; The Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. §§ 1332 (d)(2), (5); www.abajournal.com/news/article/3-19-2013/ "SCOTUS: Class Action Plaintiff Can't Avoid Federal Court By Stipulating To Amount In Controversy"; ABAJournal.com: "Supreme Court to Hear Class Action Case; Dispute Is over Removal to Federal Court", ABA Journal: "A Touch of Class: Certification, Says One Brief, ‘Is the Ballgame’"]
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