Seventh Circuit: CAFA Jurisdiction Remains After Class Certification Is Denied

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On Friday, January 22, 2010, the U.S. Court of Appeals for the Seventh Circuit held that a federal court does not lose Class Action Fairness Act (CAFA) jurisdiction over an action when class certification is denied. Cunningham Charter Corp. v. Learjet, Inc., ___ F.3d ___, 2010 WL 199627 (7th Cir. Jan. 22, 2010). The Eleventh Circuit came to the same conclusion in Vega v. T-Mobile USA, Inc., 564 F.3d 1256 (11th Cir. 2009), noting that its vacating an order certifying a class action did not affect CAFA jurisdiction. Id. at 1268 n.12. The First Circuit declined to reach the issue in College of Dental Surgeons v. Connecticut General Life Insurance Co., 585 F.3d 33, 42 (1st Cir. 2009), although an earlier decision from the First Circuit, In re TJX Cos. Retail Sec. Breach Litig., 564 F.3d 489, 492 (1st Cir. 2009) suggested in dicta that CAFA jurisdiction might be eliminated by the denial of class certification. There is a split of authority on the question among district courts. Compare Ramirez v. Dollar Phone Corp., ___ F. Supp.2d ___, 2009 WL 3747215, at *20 (E.D.N.Y. Nov. 10, 2009) (“Class certification having been denied, jurisdiction over this action is lacking.”); Salazar v. Avis Budget Group, 2008 WL 5054108, at *5 (S.D. Cal. Nov. 20, 2008) (“When this Court denied class certification, it determined there is not – and never was – CAFA diversity jurisdiction.”) with Lewis v. Ford Motor Co., 2010 WL 27409, at *8-9 (W.D. Pa. Jan 5, 2010) (citing CAFA’s legislative history, specifically the deletion of a provision that would have required dismissal of putative class actions after denial of class certification, and holding that CAFA jurisdiction remained after denial of class certification).

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