How Does the Class Action Fairness Act Impact Class Actions?

The recently enacted Class Action Fairness Act has changed the way many class actions will be litigated. The Act provides that class actions meeting certain requirements (normally claims for amounts greater that $5,000,000 or involving members of different states) may be litigated in federal courts. This allows the case to be filed in a federal court or “removed” to a federal court from a state court by the defendant. It is likely that there will be more consolidation of cases in front of a single federal judge.

There are also other provisions in the act about how payments are made for legal fees and court supervision of certain types of settlements involving coupons. The act also provides for notification to State officials when some cases are settled.

How the Act will play out is a work in progress. Some legal analysts believe that the act will result in fewer class action cases advancing beyond early stages of litigation. Also, there will likely be fewer settlements and more trials with defendants having to make more monetary payments to class members.