The (Surprisingly) Prevalent Role of States in an Era of Federalized Class Actions

In enacting the Class Action Fairness Act of 2005 (CAFA), Congress intended to expand access to the federal courts for interstate class actions by creating minimal diversity and removal jurisdiction. In Section 2 of the Act, “Findings and Purposes,” Congress stated that class action abuses undermined “the concept of diversity jurisdiction as intended by the Framers of the United States Constitution” in that state courts kept cases of national importance out of federal court and sometimes demonstrated bias against out-of-state defendants. Congress stated that a purpose of CAFA was to “restore the intent of the framers of the United States Constitution by providing for Federal court consideration of interstate cases of national importance under diversity jurisdiction.” As many commentators have suggested, CAFA was intended to federalize class action litigation. An historical examination of dual system complex litigation illustrates the extent to which federal courts have successfully (or unsuccessfully) intervened in pending parallel state court proceedings through application of abstention, the Anti-Injunction Act, preclusion, and Erie doctrines.

In the post-CAFA era, however, class action and other complex litigation has been federalized in derogation of state enforcement efforts by providing defendants with more ready access to federal courts. Nonetheless, state courts have retained jurisdiction over an array of complex litigation. Despite the federal predisposition of CAFA, states have retained a role in addressing complex litigation aided by Supreme Court decisions recognizing the independent role of state courts in enforcing local legal norms. To a significant extent, state courts have been insulated from federal judicial encroachment on states’ ability to handle complex litigation in its own courts, and state attorneys general have in various ways been empowered to pursue aggregate relief on behalf of state citizenry.