Controversy Over The Amount In Controversy

Two recent decisions from the Ninth Circuit demonstrate how knowledgeable pleading by plaintiffs regarding the amount-in-controversy requirement of CAFA can determine whether a class action will be litigated in federal or state court.

For the district court to retain original jurisdiction over a civil action under CAFA, the amount in controversy must exceed $5 million, the aggregate number of proposed plaintiffs must total 100 or more, and any member of the plaintiff class must be diverse from any defendant. The latter two requirements are usually met without any dispute. Thus, more often than not, once a plaintiff files an action in state court, the burden shifts to the removing defendant to prove that the amount in controversy exceeds $5 million.