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The United States Supreme Court has granted certiorari to decide whether a plaintiff’s stipulation to seek less than $5 million in damages can deprive the federal courts of jurisdiction to hear the case under the Class Action Fairness Act of 2005 (“CAFA”). The specific question presented in Standard fire Insurance Company v. Knowles is as follows:

Last Term, this Court held that in a putative class action “the mere proposal of a class … could not bind persons who were not parties.” Smith v. Bayer Corp., 131 S. Ct. 2368, 2382 (2011). In light of that holding, the question presented is:

When a named plaintiff attempts to defeat a defendant’s right of removal under the Class Action Fairness Act of 2005 by filing with a class action complaint a “stipulation” that attempts to limit the damages he “seeks” for the absent putative class members to less than the $5 million threshold for federal jurisdiction, and the defendant establishes that the actual amount in controversy, absent the “stipulation,” exceeds $5 million, is the “stipulation” binding on absent class members so as to destroy federal jurisdiction?

For copies of the cert petition and other briefs, and the opinion below, see the SCOTUS Blog page for the case:

http://www.scotusblog.com/case-files/cases/the-standard-fire-insurance-co-v-knowles/

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As I noted in my post a few weeks ago for the SCOTUSBlog class action symposium, one issue to which I’m paying particularly close attention these days, particularly in the wake of the Supreme Court’s recent decisions in Shady Grove, Concepcion, Bayer and Dukes, is whether the state court class certification standards begin to diverge from increasingly more exacting federal standards. 

A recent article in the Wisconsin Lawyer caught my eye as a case in point for the potential divergence of state and federal class action standards.  A Call to Reform Wisconsin’s Class-Action Statute, authored by Paul Benson, Joe Olson & Ben Kaplan of the Milwaukee firm Michael Best, discusses the brief and arcane language of Wisconsin’s class action statute (Section 803.08 of the Wisconsin Statutes), which reads, in its entirety:

When the question before the court is one of a common or general interest of many persons or when the parties are very numerous and it may be impracticable to bring them all before the court, one or more may sue or defend for the benefit of the whole.

Benson, Olsen and Kaplan point out in their article that although the courts have generally looked to case law interpreting federal Rule 23 in deciding whether class certification is proper under the state rule, the broad statutory language leaves state trial courts with broad discretion in deciding what standards to apply in a particular case.  This, they argue, leaves the state rule open to uncertainty of application, inconsistent decisions, and forum shopping.   They propose that the state rule be reformed so that it more closely mirrors the federal rule.

It remains to be seen whether states like Wisconsin with ill-defined class action rules will become battleground for class action litigation, where plaintiffs can attempt to avoid the more rigorous standards now required in the federal courts. Even assuming that CAFA and other jurisdictional issues could be overcome, there could be a variety of practical reasons why plaintiffs’ lawyers would not want to pursue class action litigation in the Wisconsin courts.  However, Wisconsin’s broadly-worded class action rule provides at least a possible inducement to pursue litigation there.

In other words, for potential class action defendants (and in observance of National Talk Like a Pirate Day), Ye maye want to considarrrr steerrrin’ clear o’ Wisconsin, me maties!

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My submission to the SCOTUSblog Class Action Symposium is now available for viewing.  Click the title below for the link:

The October 2010 Supreme Court Term in review: For defendants, life returns to normal after the celebration ends

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It’s not too late to sign up for tomorrow’s Strafford Publications Webinar Class Certification After Dukes, Bayer and Halliburton Rulings.   As a preview, here is a copy of the written materials for my portion of the presentation, Opposing Class Certification After Dukes, Bayer and Halliburton.  I hope you can make it.

 

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For those of you who simply can’t get enough of the Supreme Court’s recent class action rulings, I will be speaking in an upcoming live phone/web seminar sponsored by Strafford Publications entitled “Class Certification After Dukes, Bayer and Halliburton Rulings.”   The Webinar  is scheduled for Tuesday, August 30, 1:00pm-2:30pm EDT.   Here is a summary:

The Supreme Court’s watershed Dukes v. Wal-Mart ruling set new standards for Rule 23(a) class certification and provided guidance to the level of merits inquiry appropriate at the certification stage. It also clarified when a claim for monetary relief can be made under Rule 23(b). While Dukes is a shift in defendants’ favor, the Court refused in Smith v. Bayer to curtail relitigation of class actions in parallel state court litigation. Federal courts may not enjoin state courts from considering certification when a federal court has denied certification of the same class. In Erica John Fund v. Halliburton, the Court held that loss causation is not a prerequisite to class certification in a securities action. However, the Court did not address the existing circuit court divergence on whether a court should examine evidence of price impact at the certification stage. My fellow panelists and I developed this program to analyze three key Supreme Court rulings, Dukes, Bayer and Halliburton and their impact on current class certification jurisprudence. We will discuss how plaintiff and defendant counsel can best leverage or overcome the impact of these rulings in certification proceedings. We will offer our perspectives and guidance on these and other critical questions: What impact will Dukes have on the use of statistics and expert testimony in support of class certification? How will commonality and numerosity be applied after Dukes? What guidance, if any, does the Bayer case provide regarding relitigating competing class actions where class certification has already been granted? In light of Halliburton, should a district court examine evidence of price impact at the class certification stage, and if so, who has the burden of proof? After our presentations, we will engage in a live question and answer session with participants — so we can answer your questions about these important issues directly. I hope you’ll join us.

For more information or to register, visit the Strafford website at this link.

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