Antitrust and Unfair Competition Law

Competition: Fall 2014, Vol. 23, No. 2

CAFA: RECENT DEVELOPMENTS ON THE JURISDICTIONAL AND SETTLEMENT FRONTS

By Michael L. Mallow1

Since Congress enacted the Class Action Fairness Act (CAFA) in 2005, the nation’s class action litigation has increasingly migrated to the federal stage, with plaintiffs bringing more class actions directly to federal court and corporate defendants exercising the right of removal. Although the Supreme Court’s class action jurisprudence has been relatively thin for many years, a handful of recent decisions have addressed class actions, including jurisdictional issues specific to CAFA. While these decisions—particularly in the arbitration realm—may be regarded as favoring defendants,2 there have also been several unanimous decisions directed at achieving consistency in the federal courts’ application of CAFA and preventing "artful pleading" by class plaintiffs to avoid CAFA jurisdiction.

A legislative response to a number of perceived problems and abuses in class action litigation, CAFA transformed the class action landscape in two important ways: expanding the diversity jurisdiction of federal courts over class actions, and providing a "Class Action Bill of Rights" that requires courts to engage in more exacting scrutiny of proposed settlements. While the Supreme Court’s CAFA decisions have, so far, focused primarily on jurisdictional and class certification issues, there has been ample judicial activity at the settlement review stage, with district and circuit courts inspecting coupon settlements, cy pres allocations, and attorneys’ fees through CAFA’s remedial lens. This article examines developments at both ends of the class action "life-cycle." The first section discusses the Supreme Court’s recent jurisdictional decisions—and some of the open issues that still surround removal and remand under CAFA. The second section looks at recent decisions considering the post-CAFA viability of coupon settlements and cy pres distributions, even in class actions outside of CAFA’s jurisdictional reach.

I. CAFA’S JURISDICTIONAL PROVISIONS

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