Litigating California Wage & Hour and Labor Code Class Actions
Litigating California Wage & Hour and Labor Code Class Actions
Litigating California Wage & Hour and Labor Code Class Actions
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XIII. <strong>Class</strong> Action Fairness Act of 2005<br />
A. The Purpose of the Act<br />
The <strong>Class</strong> Action Fairness Act of 2005 (“CAFA”) amended the federal diversity jurisdiction<br />
statute, 28 U.S.C.A. § 1332, to broaden the basis for federal diversity jurisdiction. In<br />
enacting the CAFA, Congress’s intent was to shift class action litigation from state courts to<br />
the federal courts. 294 The most significant increase in filings of class actions has been in<br />
labor class actions. 295 Most of these class actions are brought under either F.R.C.P. 23 or<br />
the Fair <strong>Labor</strong> St<strong>and</strong>ards Act (FLSA). 296<br />
B. General Requirements<br />
The CAFA grants the federal court jurisdiction over any class action in which: 1) the<br />
proposed class consists of at least 100 members, 2) the total amount in controversy<br />
exceeds $5 million after combining claims, exclusive of interest <strong>and</strong> costs, <strong>and</strong> 3) there is<br />
diversity between at least one plaintiff class member <strong>and</strong> one defendant. 297<br />
The CAFA exp<strong>and</strong>s the jurisdiction of the federal courts to hear class action lawsuits <strong>and</strong><br />
replaces the strict complete diversity requirement with a more lenient rule, thereby granting<br />
jurisdiction where any diversity exists between plaintiffs <strong>and</strong> defendants. 298 CAFA diversity<br />
exists when at least one plaintiff is a citizen of one state <strong>and</strong> one defendant is a citizen of a<br />
different state, or when one plaintiff is a citizen of a foreign country <strong>and</strong> one defendant is a<br />
U.S. citizen, or when one plaintiff is a U.S. citizen <strong>and</strong> one defendant is a citizen of a<br />
foreign country. 299<br />
The CAFA defines class actions as any civil action filed under Federal Rule of Civil<br />
Procedure 23 or similar state law. 300 Also included within this definition, for removal<br />
294<br />
295<br />
296<br />
297<br />
298<br />
299<br />
300<br />
Federal Judicial Center, Impact of CAFA on the Federal Courts: Fourth Interim Report, at 1-2, Apr. 2008 (reporting a<br />
72% increase in class action cases filed in the 88 district courts from January to June 2007 compared with July to<br />
December 2001).<br />
Id. at 7.<br />
Id. (reporting a 228 percent increase when comparing the first six-month period to the last six-month period).<br />
28 U.S.C. § 1332(d)(2). CAFA does not confer federal subject matter jurisdiction when the primary defendants are<br />
states, state officials, or other governmental entities against whom the district court may be foreclosed from ordering<br />
relief. Id. § 1332(d)(5).<br />
Natale v. Pfizer, Inc., 379 F. Supp. 2d 161, 167 (D. Mass. 2005), aff’d, 424 F.3d 43 (1st Cir. 2005).<br />
Id. § 1332(d)(2); Bush v. Cheaptickets, Inc., 425 F.3d 683, 684 (9th Cir. 2005).<br />
28 U.S.C. § 1332(d)(1)(B). At least one district court has held that representative actions under PAGA are not “class<br />
actions” <strong>and</strong> therefore are not removable pursuant to CAFA. Sample v. Big Lots Stores, Inc., 2010 WL 4939992 (N.D.<br />
Cal.)<br />
Seyfarth Shaw LLP | www.seyfarth.com <strong>Litigating</strong> <strong>California</strong> <strong>Wage</strong> & <strong>Hour</strong> <strong>Class</strong> <strong>Actions</strong> (12th Edition) 67