Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Class Action Fairness Act Raises Issues for Employment Litigation

By Betsy L. Katten
March 29, 2005

In February, President Bush signed his first piece of “tort reform” legislation, the Class Action Fairness Act (the Act), into law. The Act expands federal diversity jurisdiction to encompass most large class actions, including employment law related class actions. One area of employment litigation that the Act may likely impact is in the wage and hour class action context where, as discussed below, litigants file wage and hour class actions in state court while also pursuing Fair Labor Standards Act (FLSA) collective actions in federal court.

What's in the Act

Generally stated, the Act provides a right to remove to federal court any state court class action (or mass action of 100 or more plaintiffs) commenced after the effective date of the Act, Feb. 18, 2005, in which:

  • there is minimal diversity (at least one member of the proposed class is from a different state than at least one defendant); and
  • the amount in controversy is more than $5 million.

A federal court may decline to exercise jurisdiction if between one-third and two-thirds of the potential class members and the primary defendants are citizens of the state where the case was filed. The Act precludes federal courts from exercising jurisdiction where at least two-thirds of the potential class members and at least one of the primary defendants are citizens of the state in which the case was filed. It also puts significant limits on attorney fee awards in cases where the class members receive “coupons” instead of cash payments. The Act further requires that defendants notify the appropriate federal and state authorities prior to court approval of any settlement.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

Legal Possession: What Does It Mean? Image

Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.

The Anti-Assignment Override Provisions Image

UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?