In a recent case, the U.S. Court of Appeals for the Third Circuit addressed the Class Action Fairness Act (CAFA)’s amount in controversy requirement. In Hoffman v. Nutraceutical, No. 13-3482, slip op. (3d Cir. March 27, 2014), the Third Circuit affirmed the district court’s denial of the plaintiff’s motion to remand the case back to state court. The court held that the CAFA jurisdictional requisites, including the amount in controversy requirement, were satisfied and supported federal jurisdiction. Embedded in the decision is an interesting operational assumption: Instead of the burden being on the defendant to prove that the CAFA amount in controversy requirement had been met—as is true in most CAFA cases—the burden was placed on the plaintiff to show that the jurisdictional amount had not been met.
CAFA was enacted in 2005. It authorizes the removal of certain class actions from state to federal court. The U.S. Supreme Court has defined the act’s primary purpose as “ensuring federal court consideration of interstate cases of national importance,” in Standard Fire Insurance v. Knowles, 133 S. Ct. 1345, 1350, (2013). The act grants original jurisdiction to federal courts for class actions whose amount in controversy exceeds $5 million, provided those actions have diverse parties and at least 100 members in the putative class. Congress has already foreseen the need for appellate courts to interpret the boundaries of CAFA jurisdiction—the act provides an exception to the usual ban on interlocutory appeals of remand orders found in 28 U.S.C. Section 1447(d). The exception is found in 28 U.S.C. Section 1453(c)(1) and was instituted “to facilitate the development of ‘a body of appellate law interpreting [CAFA] without unduly delaying the litigation of class actions,’” according to Alvarez v. Midland Credit Management, 585 F.3d 890, 893 (5th Cir. 2009).
