The NAM and 6 corporations have supported a petition asking the Supreme Court to review a Ninth Circuit decision that allows plaintiffs to break a large mass action case into seven smaller cases, each with fewer than 100 plaintiffs, to avoid the restraints imposed by the Class Action Fairness Act of 2005 (CAFA).
Under CAFA, class action and mass action litigation involving 100 or more plaintiffs and more than $5,000,000 in damages may be filed in state courts, but defendants, often manufacturers, are allowed to transfer the cases to federal courts, which are often viewed as more fair and balanced.
In this case, trial lawyers divided a single lawsuit involving 664 plaintiffs into seven different lawsuits, all making the same claim. The Ninth Circuit accepted this chicanery and rejected the defendant’s attempt to have the case heard in federal court. Our amicus brief highlights how this decision conflicts with that of another federal appeals court, and asks the Supreme Court to review the case and allow a federal court to hear it. If the Ninth Circuit’s ruling is allowed to stand, that would present a serious problem for manufacturers, since many plaintiffs would file mass actions in courts within that jurisdiction, and would further shop around for the friendliest county courthouses. Avoiding the overwhelming pressure to settle cases that wind up in such “magnet jurisdictions” was one of the primary reasons that Congress passed CAFA.
The NAM joined with Centerpoint Energy, Eli Lilly, ExxonMobil, General Electric, Occidental Petroleum and Owens-Illinois in the amicus brief.
Cert denied on October 6, 2009.