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February 2009

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This article is in the news archives --- for current news go to the Third Branch News.

 

Study: Class Action Plaintiffs Most Often Did Not Seek to Certify Class


A recent Federal Judicial Center (FJC) study finds that plaintiffs in most diversity class action cases never asked a judge to “certify a class” of those allegedly affected similarly. Citing findings that plaintiffs filed certification motions in fewer than 25 percent of such cases, the interim report states that “in diversity class actions there is less to class allegations than one would expect.”

These results can be found in the latest interim report in the FJC’s ongoing study of the impact of the Class Action Fairness Act of 2005 (CAFA). This report focuses on pre-CAFA class action lawsuits that landed in federal courts because the parties—plaintiffs and defendants—were from different states (so-called diversity cases).

The findings were based on 231 diversity class actions that reached final disposition. The FJC plans to issue its next interim report in the fall of 2009, in which it will begin to compare pre-CAFA and post-CAFA data. A final report on the law’s impact is not expected until sometime in 2010.

An earlier interim report found that the law, aimed at facilitating removal of class action lawsuits from state to federal courts, already has increased the number of such cases handled in federal courts at a rate of several hundred cases per year.

Among the principal findings in the latest interim report are these:

  • Parties proposed class settlements in 21 of the 231 cases, or 9 percent.
  • Judges approved all 21 proposed settlements, although approval in three cases came only after the proposal was modified.
  • Parties typically did not file many motions in the cases. Fifty-six percent of the cases had one or no motions filed.
  • Voluntary dismissal of the lawsuit was the most frequent disposition.

See the interim report at www.fjc.gov/public/pdf.nsf/lookup/cafa1108.pdf/$file/cafa1108.pdf.