A ruling by an 11th Circuit panel has significantly narrowed the scope of the Class Action Fairness Act of 2005 (CAFA).

The ruling regarding CAFA, 28 U.S.C. § 1332(d)(1), came in Cappuccitti v. DirecTV, Inc., ____ F.3d ____, No. 09-14107, 2010 WL 2803093 (11th Cir. July 19, 2010). The court held that "in a CAFA action originally filed in federal court, at least one of the plaintiffs must allege an amount in controversy that satisfies the current congressional requirement for diversity jurisdiction provided in 28 U.S.C. § 1332(a)."

The Cappuccitti opinion is subject to further review within the 11th Circuit and potentially by the U.S. Supreme Court. 

Previously, federal courts have ruled that CAFA jurisdiction exists if, inter alia, any member of a class of plaintiffs is a citizen of a state different from any defendant and the amount in controversy exceeds $5 million (obtained by aggregating the claims of the putative class members), even if no plaintiff's individual amount in controversy exceeded $75,000. 

The 11th Circuit held that CAFA did not eliminate the general diversity requirement applicable to "all civil actions" that "the matter in controversy exceed the sum or value of $75,000."  Accordingly, it concluded that the District Court in this case lacked jurisdiction over the plaintiffs' class action complaint because no individual plaintiff alleged an amount in controversy exceeding $75,000.

Ballard Spahr's Consumer Class Action Litigation Group successfully defends banks and other consumer financial services and product providers in class actions filed in state and federal courts throughout the country. Our Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs). 

For more information, please contact group Chair Alan S. Kaplinsky, 215.864.8544 or kaplinsky@ballardspahr.com; Vice Chair Jeremy T. Rosenblum, 215.864.8505 or rosenblum@ballardspahr.com; Mark J. Levin, 215.864.8235 or levinm@ballardspahr.com; Martin C. Bryce, Jr., 215.864.8238 or bryce@ballardspahr.com;or Burt M. Rublin, 215.864.8116 or rublin@ballardspahr.com.

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