The Class Action Fairness Act of 2005 creates
federal diversity jurisdiction over class actions in which the
amount in controversy exceeds $5 million. Suppose a defendant
removes a putative class action to federal court, making a showing
that the $5 million threshold is met, and the plaintiff signs a
stipulation that he or she will not seek more than $5 million on
behalf of the class. May the case be remanded on the basis of such
a stipulation?
That question will be decided by the Supreme Court this term in
Standard Fire Insurance Co. v. Knowles. In
Knowles, the complaint was filed in an Arkansas state
court and accompanied by the plaintiff’s signed
affidavit, which stated that the plaintiff “will not at
any time during this case . . . seek damages for the class . . . in
excess of $5,000,000 in the aggregate (inclusive of costs and
attorneys’ fees).” Standard Fire removed to
federal court, and the plaintiff moved to remand.
