Thursday, February 11, 2010
A recent Seventh Circuit decision holds that the denial of class certification in federal court does not eliminate federal subject-matter jurisdiction under the Class Action Fairness Act (CAFA). Therefore, when a case is removed to federal court under CAFA and class certification is denied, the case should remain in federal court and should not be remanded.
The case is Cunningham Charter Corp. v. Learjet Inc., No. 09-8042, ___ F.3d ___, 2010 WL 199627, 2010 U.S. App. LEXIS 1452 (7th Cir. Jan. 22, 2010). Writing for the panel, Judge Posner reasoned:
[I]f a state happened to have different criteria for certifying a class from those of Rule 23, the result of a remand because of the federal court's refusal to certify the class could be that the case would continue as a class action in state court. That result would be contrary to the Act's purpose of relaxing the requirement of complete diversity of citizenship so that class actions involving incomplete diversity can be litigated in federal court.
He added: "Our conclusion vindicates the general principle that jurisdiction once properly invoked is not lost by developments after a suit is filed."
(Hat Tip: BNA's US Law Week)