Impact of CAFA Study Finds 72 Percent Increase in Class Actions

The Impact of the Class Action Fairness Act of 2005 on the Federal Courts, Fourth Interim Report to the Judicial Conference Advisory Committee on Civil Rules (April 2008) (pdf) found a 72 percent increase in class action cases for comparable periods in 2001 and 2007 in 88 federal district courts. Much of that increase was in federal question cases, especially labor class actions and class actions filed under federal consumer protection statutes. Since CAFA’s effective date in February 2005, however, the Federal Judicial Center study also observed an increase in the number of class actions initiated in the federal courts on the basis of diversity of citizenship jurisdiction.

From the summary of key findings:

• There has been a dramatic increase in the number of diversity class actions filed as original proceedings in the federal courts in the post-CAFA period. The pre-CAFA average of such filings per month was 11.9; the post-CAFA average was 34.5 per month.
• Diversity class action removals increased in the immediate post-CAFA period over their 2004 levels but have been trending downward since 2005. In the last months of the study period, diversity removals were at levels similar to those in the pre-CAFA period.
• The increase in diversity class action original proceedings was widespread. Diversity class action original proceedings increased overall in the districts in eleven of the twelve circuits, when we compared filings for calendar years 2002 and 2003 with those for the last two years of the study period, July 1, 2005–June 30, 2007. Diversity class action original proceedings also increased between the two time periods in all but one of the districts with substantial numbers of diversity class actions during the study period.
• The results we found for diversity class action removals were more varied. When we compared removals in calendar years 2002 and 2003 with those in the last two years of the study period, we found that they decreased in the last two years of the study period in five circuits. However, when we analyzed the districts separately, we found that most of the districts with substantial numbers of diversity class actions experienced some increase in diversity removals.
• The increase in diversity class actions is due largely to increases in the numbers of contracts, consumer protection/fraud, and torts-property damage class actions being filed in or removed to federal court in the post-CAFA period. Tortspersonal injury cases have not increased in the post-CAFA period.

[JH]