Supreme Court Should Restore Level Playing Field For Consumer Class ActionsNovember 15, 2018
As I reported in an earlier post, the Supreme Court has agreed to hear Home Depot v. Jackson, No. 17-1471, a case that involves class-action fairness. On November 15 I filed on behalf of DRI-The Voice of the Defense Bar a merits-stage amicus curiae brief urging the Court to enforce the Class Action Fairness Act’s right to remove most class actions from state to federal court. Among other things, the amicus brief – which can be accessed HERE – discusses the types of biases and inequities that defense counsel and their corporate clients often encounter when class actions are litigated (or settled) in state trial courts.
Quoted in a November 16 Law360 article about the case, I explained that “the Supreme Court’s challenge will be to revisit an 80-year precedent, Shamrock Oil, and decide whether it should be distinguished in light of today’s drastically changed judicial landscape, which is burdened with every imaginable type of consumer class action against national corporations.”
The Class Action Fairness Act of 2005 (“CAFA”) is intended to ensure that high-stakes consumer class actions against national corporations are pursued in federal court, where class-action criteria and procedures are considerably more stringent than in many plaintiff-friendly state courts. To achieve CAFA’s objective, the statute provides that “any defendant” in a qualifying state-court class action has the right to remove the suit to federal district court. Some plaintiffs’ attorneys, however, believe they have found a way to circumvent CAFA based on Shamrock Oil & Gas Co. v. Sheets, 313 U.S. 100 (1941) (holding that the original plaintiff in a state-court suit cannot remove a counterclaim). They have been recruiting defendants in routine state-court debt-collection suits to file third-party class-action complaints, or class-action counterclaims — rather than separate class-action litigation — against national corporations not otherwise involved in the original debt-collection suit. The Supreme Court will be deciding in Home Depot whether, contrary to the conclusion of four federal circuits, such third-party or counterclaim class-action defendants are “any defendant” for CAFA removal purposes.