On August 31, 2012, the United States Supreme Court granted certiorari in Standard Fire Insurance Co. v. Knowles, No. 11-1450, indicating its intent to address, for the first time, the scope of the Class Action Fairness Act of 2005 (CAFA). Specifically, the Court granted certiorari to decide whether a named plaintiff in a putative class action can avoid federal jurisdiction under CAFA by stipulating that she seeks damages, on behalf of herself and the absent class members, in an amount less than the jurisdictional minimum of $5 million. In doing so, the Court will resolve a split among several circuit courts of appeals and address an issue that has considerable ramifications for the reach of CAFA.
The District Court and Eighth Circuit Decisions -
In Knowles, the named plaintiff sued Standard Fire Insurance Co. (“Standard Fire”) in Arkansas state court, alleging that Standard Fire breached his insurance contract by underpaying property damage claims. The plaintiff sought to assert his claim on behalf of himself and a statewide class. With his complaint, the plaintiff submitted an affidavit stating that he sought damages — for both himself and the alleged class he sought to represent — of less than $5 million.
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