The Class Action Fairness Act (CAFA) gives federal courts jurisdiction of class actions where the matter in controversy exceeds $5 million. The U.S. Supreme Court considered the question of whether a named class representative can avoid application of CAFA by stipulating that he will not seek damages that exceed $5 million in Standard Fire Ins. Co. v. Knowles.
In an unanimous opinion, the Court holds that the stipulation is ineffective. In other words, the stipulation will not foreclose application of CAFA. Why? The Court reasons that a plaintiff cannot legally bind members of the proposed class before the class is certified. This opinion resolves a split that had developed between the circuit courts of appeals.
One issue the Court did not resolve was whether the plaintiff’s counsel for the named representative could avoid application of CAFA by stipulating that he would limit attorney’s fees sought. The Court did not address this because that particular stipulation had not been offered in the district court. The Court’s opinion may be found here.