The Ninth Circuit Rejects Class Action Plaintiffs' Tactic To Avoid Federal Court

Before the Class Action Fairness Act of 2005 (CAFA), many corporate defendants were forced to litigate class actions in state court because the claims of putative class members could not be aggregated to meet the threshold requirement for federal diversity jurisdiction. However, CAFA removed that obstacle by establishing federal jurisdiction for class actions with at least 100 class members, more than $5 million in controversy considering all class members' combined claims, and minimal diversity (i.e., at least one plaintiff and one defendant from different states).

Despite Congress's clear intent to provide increased access to the federal system for interstate class actions, plaintiffs sought to develop a tactic to avoid CAFA jurisdiction by pleading only equitable claims for relief (e.g., restitution or injunctions) while foregoing otherwise viable legal claims for money damages. Doing so, plaintiffs argued, deprived federal courts of “equitable jurisdiction,”