On Monday, December 15, the U.S. Supreme Court issued an opinion that makes it easier for defendants to remove class actions to federal court under the Class Action Fairness Act of 2005 (“CAFA”). Dart Cherokee Basin Operating Co. v. Owens does so in three ways:
1. A defendant’s Notice of Removal does not have to include evidentiary submissions to establish federal jurisdiction under CAFA. A CAFA class action can be removed to federal court if the amount in controversy – i.e. value of the case – exceeds $5 million. Under Dart, defendants need only make a “plausible allegation” that the value of the case satisfies this jurisdictional amount. Evidence supporting the amount alleged is not required. This “plausible allegation” standard echoes the “short and plain statement” pleading standard in Federal Rule of Civil Procedure 8(a). If neither the plaintiff nor the district court contests the defendant’s allegations regarding the amount in controversy, no “evidence” is necessary. But if the allegations are contested, both sides submit proof, and the court will decide, by a preponderance of the evidence standard, whether the amount in controversy is met.
Dart puts an end to any antiremoval presumption in CAFA cases.
2. There is no presumption against removal of CAFA class actions. Before Dart, some courts applied a strong presumption against CAFA removals. The Supreme Court, however, held otherwise: “no antiremoval presumption attends cases invoking CAFA, which Congress enacted to facilitate adjudication of certain class actions in federal court.” Dart puts an end to any antiremoval presumption in CAFA cases. The Court did not decide whether such a presumption against removal exists in non-CAFA cases.
3. Federal appellate courts’ discretion to hear CAFA remand appeals is not “rudderless.” Although review of a CAFA remand order is permissive, Dart reminds federal appellate courts that a court “would necessarily abuse its discretion if it based its ruling on an erroneous view of the law.” An appellate court must exercise its “correctly ‘informed’ discretion,” applying the proper legal standard, to determine whether a petition meets the requirements for review.
No. 1 already applies to non-CAFA removals. In fact, the Court relied on 1446(c)(2)(B), which on its face does not apply to CAFA removals, and “assume[d] without deciding” that this provision applies to CAFA. No. 3 does not apply to non-CAFA cases at all, but No. 2 may or not apply to non-CAFA cases (the only support the Court cited is applicable only to CAFA). Whether and how Dart impacts future class action rulings will be important to watch.