House Hearing on CAFA- Seven Years Later

A topic near and dear to the hearts of readers of MassTortDefense was the subject of a recent hearing by a subcommittee of the U.S. House Judiciary Committee. Entitled "Class Actions Seven Years After the Class Action Fairness Act,” the hearing was designed to address what has worked with the law, what has not, and what Congress overlooked when it passed CAFA.

Witnesses included a plaintiff-side attorney, who typically complained about CAFA's impact on consumer fraud class actions, and Professor Redish from Northwestern, who talked about the need for legislative revision of the use of so-called “cy pres” awards in class action proceedings in particular.

Rep. Trent Franks (R-Ariz.) is the chairman of the Subcommittee on the Constitution, and has expressed concern over the ability of plaintiffs to engage in a new form of forum shopping under CAFA, filing cases in particular federal circuits they think are more hospitable to class actions.

John Beisner, who typically represents defendants in class actions, testified on behalf of the U.S. Chamber Institute for Legal Reform; he noted that a small number of judicial rulings have ignored Congress’s intent behind this landmark legislation, meriting further legislative attention. From imposing a heightened “legal certainty” standard on defendants with respect to CAFA’s amount-in-controversy requirement to broadly construing CAFA’s narrow exceptions to federal jurisdiction, these rulings run afoul of CAFA’s presumption in favor of federal jurisdiction. Second, he argued that Congress should also assess certain troubling aspects of federal class action jurisprudence that were not affected by CAFA. These issues include: (1) efforts by a small number of federal courts to loosen the requirements of Rule 23; (2) the increasing use of cy pres settlements to support large fee payouts to class counsel; and, he noted, (3) judicial approval of class actions that encompass substantial numbers of uninjured individuals (that is, persons who lack Article III standing).