Allapattah & the Class Action Fairness Act

Professor Adam Steinman has recently posted his article, entitled Sausage-Making, Pigs' Ears, and Congressional Expansions of Federal Jurisdiction: Exxon Mobil v. Allapattah and its Lessons for the Class Action Fairness Act, which discusses two recent developments on the federal jurisdictional front: The Court's Section 1367 decision in Exxon Mobil Corp. v. Allapattah Services, Inc. and the new Class Action Fairness Act enacted earlier this year. Here is the abstract:

The first half of 2005 witnessed two watershed developments in federal jurisdiction: the Class Action Fairness Act (CAFA), which created a new source of federal jurisdiction for certain class actions, and Exxon Mobil Corp. v. Allapattah Services, Inc., which resolved an aspect of 28 U.S.C. 1367 (supplemental jurisdiction) that had deeply divided both the judiciary and academia. CAFA and 1367 pose the same fundamental question: how should courts interpret a statute whose literal text would expand federal jurisdiction far beyond what Congress apparently intended? While 1367's legislative history suggested an intent to legislatively overturn a single Supreme Court decision issued one year earlier, the text of the statute appeared to cast aside a number of well-established precedents that had limited the extent of federal jurisdiction over claims by new plaintiffs in diversity cases. Similarly, CAFA's legislative history indicated that Congress meant to expand federal jurisdiction only to certain large class actions with interstate dimensions, but the unambiguous text of CAFA authorizes removal of virtually every state court class action to federal court.

Since CAFA and 1367 raise similar interpretive problems, this article examines Allapattah to divine its lessons for interpreting CAFA. I conclude, however, that the Court sent mixed messages. The Court's language imparted an unmistakable endorsement of textualism - jurisdictional statutes should be read no more narrowly or broadly than the text provides. But the Court's ultimate conclusion confirmed that it is willing to compromise strict fidelity to the text in order to avoid expanding jurisdiction far beyond what Congress apparently intended. If courts heed Allapattah's words, they will apply CAFA's literal text and conclude that nearly all class actions filed in state court are subject to removal. But if courts heed Allapattah's actions, they will adopt a middle ground interpretation: CAFA would eliminate certain requirements that had impeded the removal of class actions in the past, but it would not create an independent basis for removing all state court class actions; rather, a basis for removal must exist elsewhere in federal law.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=802764