The Class Action Fairness Act of 2005

On February 18, 2005 the President signed into law the Class Action Fairness Act of 2005 (the "Act" or "CAFA"). The Act, whose stated purpose is "to amend the procedures that apply to consideration of interstate class actions to assure fairer outcomes for class members and defendants," represents the culmination of years of efforts to address the recent dramatic increase in practices widely viewed as abusive in interstate class actions brought in state courts.

The Act has implications for all defendants in class actions filed after the date of the Act’s passage. Passage of the Act is a welcome development for defendants, reducing the risk of prejudicial and inconsistent treatment in state court. Various issues remain to be worked out as the Act is implemented in the courts, however, and a proper understanding of what the Act does and does not accomplish will be essential to navigating this early litigation.