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How is the Class Action Fairness Act working?

By Walter Olson, Ted Frank, and David Nieporent

The Washington Legal Foundation announces a new paper by Brian Anderson and Mel Schwing: "Two leading class action defense
attorneys utilize a federal court judge?s recent rejection of a settlement as a case study of how CAFA can deter defendants? ability to 'buy peace' through settlements" in cases where the claim is so meritless that it is only worth a small amount of money for the defendant to settle:

While CAFA surely benefited class action defendants more than plaintiffs by transferring more cases to federal courts that offer more fairness and predictability in the adjudication of class actions, it is not a ?free-pass? for targets of class action lawsuits.

The quid pro quo of giving class action defendants greater access to federal courts is that CAFA expects defendants to vigorously litigate, not settle via coupon settlements, frivolous class actions. The message of Figueroa is that class action defendants in federal court who try to escape all litigation risk by proposing low-value coupon benefits in exchange for global releases of claims (especially where competing lawyers and attorneys? general are involved in the controversy) will have a difficult time persuading the federal courts to approve such settlements.

Figueroa was the first time in the three-year history of CAFA that state attorneys general used their CAFA right to intervene in a settlement hearing. Last year, I also took a look at CAFA.

Full post as published by Overlawyered on February 09, 2008 (boomark / email).