What is the Class Action Fairness Act?

The Class Action Fairness Act, also called CAFA, is a United States' law that was enacted in 2005 to move many class-action lawsuits from under the jurisdiction of state courts to federal courts. Proponents of the act argued that cases would be fairer under federal courts, where cases could be judged on a national standard rather than by the mixed bag of state courts. Opponents argued that the law would slant courts against plaintiffs, by extending the period before victims might be recompensed—federal courts have far more cases to handle than state courts—and by placing cases in courts that might be less sympathetic to plaintiffs and more sympathetic to big business.

Under the Class Action Fairness Act, class-action lawsuits that exceed a possible recompense of more than $5 million US Dollars (USD) and involve plaintiffs who reside in different states from the defendants are relegated to federal courts. An example of a lawsuit that, under the act, would now fall under federal jurisdiction might be an oil spill. Oil spills, such as the 2010 BP spill in the Gulf of Mexico, tend to affect plaintiffs from multiple states, and the amount of possible damages quickly exceeds $5 million USD. As a result, such a case would easily fall under federal jurisdiction as stipulated by the Class Action Fairness Act.

Proponents of the Class Action Fairness Act argue that it makes the law more fair. It makes it so that defendants, facing charges from plaintiffs across multiple states, can't sway the case to be tried in a state court system that’s biased toward the defendant. By elevating cases to a national level, bias would be diluted, and defendants' attorney couldn't cherry-pick federal courts in the same way they could state courts. They also argue that cases would be judged more consistently, which would serve to make the rule of law more fair to all parties.

Opponents, however, argue against such notions. State courts, they say, are generally more inclined to rule in favor of plaintiffs, as judges and juries of such courts reside in the same areas as the plaintiffs. They might be more inclined to understand the nature of the plaintiffs' suffering, and be therefore less inclined to bend under the influence of deep-pocketed defendants. Another argument against the Class Action Fairness Act is that—even if federal courts prove to be just as fair—it may be years before plaintiffs and defendants ever get their day in court. Federal courts are more backlogged, and take longer to get around to cases. As such, it could take years longer for deserving plaintiffs to be awarded damages.