Supreme Court Makes Clear That CAFA Removal Is Not Defeated By Plaintiffs' Amount-In-Controversy Stipulations

A unanimous United States Supreme Court has now ruled that self-appointed would-be class representatives cannot defeat Class Action Fairness Act (CAFA) removal by simply purporting to limit the damage claims of class members to less than $5 million in the aggregate in the complaint or other precertification filings. Standard Fire Ins. Co. v. Knowles, — U.S. — (Mar. 19, 2013). This landmark decision effectively reverses contrary precedent from the Eighth Circuit and a number of district courts around the country.

The Supreme Court was careful to point out in Standard Fire that in an individual case, a plaintiff can effectively limit his or her own damages to less than the amount in controversy required for diversity removal. See St. Paul Mercury Indemnity...