September 19, 2013 Articles

Class Action Ethics in Standard Fire v. Knowles

The exception can prevent a federal court from exercising jurisdiction over a class action case.

By Catha Worthman

For those interested in the debates over the future of class actions, Standard Fire v. Knowles, 133 S. Ct. 1345 (Mar. 19, 2013), is worth a closer look than may be apparent on first reading. Although on the surface it is a narrow, technical decision about the Class Action Fairness Act (CAFA), examining Standard Fire in more depth sheds light on ongoing disputes concerning class action ethics. As Theodore Boutrous, Jr., the attorney for defendant Standard Fire Insurance Company, said in oral argument, the case “really goes to a fundamental issue of what a class action is.”

Standard Fire’s holding is narrow and unexceptional: A unanimous Court held that plaintiffs cannot stipulate around the jurisdictional amount-in-controversy provision in CAFA, 28 U.S.C. § 1332(d). Beyond this holding, however, deeper issues are at play. These issues involve competing beliefs about fairness in forum selection and pleading, including the extent to which plaintiffs can act as “masters” of their complaint, weighed against defendants’ interests in the procedural protections of federal court (or protecting against the choice of too favorable a forum for plaintiffs).

Standard Fire also reveals judicial mistrust about the relationship of class action plaintiffs and lawyers to the people and causes they seek to represent, and doubt about how effectively class action law protects both absent class members and defendants. Whatever the merits of such concerns, they are worth examining further because they will play out in forthcoming cases and policy debates. Of particular importance for class action litigation is how Standard Fire will be read to affect the ability of named plaintiffs to shape class action litigation, especially before class certification.

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