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When can a class action lawsuit be heard by a federal court?

On Behalf of | Nov 3, 2022 | Class Action Lawsuits |

Any lawsuit can be complex and the same is true for class action lawsuits. One major part of a class action lawsuit is determining which court will hear the case—federal court or state court. The Class Action Fairness Act (CAFA) of 2005 addresses the topic of when a class action lawsuit can be moved from state court to federal court.

The Class Action Fairness Act and diversity jurisdiction

CAFA was enacted into law in 2005 and addresses when a class action suit can be moved to federal court by the defendant. Thus, it addresses diversity jurisdiction, which entails which court has the power to hear a case when the plaintiff and defendant are citizens of different states.

Prior to the passing of CAFA, a defendant to a class action lawsuit could not move the case to federal court if the defendant and one or more plaintiffs were citizens of the same state.

Under CAFA, the defendant to a class action could move the case from state court to federal court if the damages sought are greater than $5 million, the class includes 100 or more plaintiffs and if one or more plaintiffs in the class are citizens of different states from the defendant. This diversity allows for a case to be heard by a federal court.

The defendant does not have to name the exact plaintiff(s) that are residents of other states. They simply need to demonstrate by a preponderance of the evidence that it is likely that one or more class members reside in a state other than the one the defendant resides in.

This is only a brief overview of diversity jurisdiction in a class action case. Ultimately it is important that all members of the class have an opportunity to have the case heard by the appropriate court. Class action lawsuits can be complex, so it can help to bring your questions about jurisdiction to the attention of an attorney who can further educate you on this topic.