When enacted in 2005, CAFA expanded federal diversity jurisdiction over class actions and mass actions and attempted to make removal of these cases easier. The expansion of jurisdiction reflected a preference for federal courts to hear interstate cases involving numerous plaintiffs.

For detailed information on CAFA's requirements, see Practice Note, Class Action Fairness Act of 2005 (CAFA): Overview.

Since CAFA's enactment, however, issues surrounding the appropriate circumstances supporting removal and applicability of certain exceptions from federal jurisdiction have been regularly litigated. The resulting opinions clarify some of a federal court's jurisdictional limits. Although CAFA is now ten years old, courts continue to weigh in on when or whether a party may remove a class action to federal court. A handful of recent opinions by the Ninth Circuit, for example, address:

For more information on navigating CAFA's provisions, see Article, CAFA Mass Actions: Will Courts Continue to Permit Plaintiffs to Game the System? and CAFA Jurisdiction Comparison Chart.

In two recent decisions, the Ninth Circuit held that CAFA removal was timely even though it was based on events that occurred after a defendant filed an initial notice of removal.

In Reyes v. Dollar Tree Stores, Inc., the defendant, Dollar Tree Stores, Inc., had previously removed the case to federal court in 2012 (781 F.3d 1185, 1186 (9th Cir. 2015)). The district court originally remanded the case to state court because the narrowly defined proposed class in the amended complaint failed to meet CAFA's amount in controversy requirement.

After remand, the California state court certified the class, expanding the class definition and increasing the amount in controversy to an amount exceeding CAFA's $5 million threshold. As a result, Dollar Tree removed the class action to federal court for the second time. Once again, the district court remanded the case to the state court, relying on the class definition in the amended class action complaint rather than the expanded class definition identified by the state court. (781 F.3d at 1187-88.)

On appeal, the Ninth Circuit reversed, finding that the state court's certification decision functioned like an order permitting a party to amend a pleading to change the class definition. Because the state court's certification order expanded the class and increased the amount in controversy, federal jurisdiction over the class action under CAFA now existed. (781 F.3d at 1186-88.)

The Ninth Circuit found removal proper because subsequent events had revealed a “new and different" ground for removal from the initial notice of removal. Therefore, Dollar Tree's successive removal petition was permitted and timely because it had removed the case to federal court within 30 days after receiving the state court order certifying the newly defined class. (781 F.3d at 1188-90; 28 U.S.C. § 1446(b).)

Similarly, in Jordan v. Nationstar Mortgage LLC, the Ninth Circuit found removal to be timely based on the emergence of new and different grounds for removal two years after the complaint was filed in state court (781 F.3d 1178, 1180 (9th Cir. 2015)). The defendant, Nationstar Mortgage LLC, removed the action after receiving the plaintiff's interrogatory responses showing that the amount in controversy exceeded CAFA's $5 million threshold. The district court held that Nationstar's removal of the case was untimely because the class action complaint filed in state court two years earlier contained allegations supporting federal question, rather than diversity, jurisdiction. Because federal question jurisdiction existed in the original complaint, and the case was removable at that time, the district court found the attempt to remove untimely and remanded the case. (781 F.3d at 1180-81.)

Broadly interpreting CAFA, the Ninth Circuit reversed, holding that a case becomes removable when the "CAFA ground for removal is disclosed" (781 F.3d at 1184 (citing Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1253 (9th Cir. 2006))). Although Nationstar could have removed the case after the class action complaint was initially filed in state court based on federal question jurisdiction, CAFA jurisdiction did not arise until the plaintiff provided information in her interrogatory responses indicating that the amount in controversy exceeded $5 million. Therefore, the Ninth Circuit held that the removal of the class action within 30 days of receiving the plaintiff's interrogatory responses was timely. (781 F.3d at 1184; 28 U.S.C. § 1446(b).)

Under the so-called securities exception to CAFA removal, federal courts lack jurisdiction over class actions involving claims concerning the rights, duties and obligations related to any security (28 U.S.C. § 1453(d)(3)). The Ninth Circuit recently interpreted the language of the securities exception for the first time and determined that the case fell outside CAFA jurisdiction. Relying on several opinions from the US Court of Appeals for the Second Circuit, the only other circuit to address the exception, the Ninth Circuit found that the exception applies when each of a class action plaintiff's causes of action is based on alleged duties arising under a security. (Eminence Investors, L.L.L.P. v. Bank of N.Y. Mellon, 782 F.3d 504, 507-510 (9th Cir. 2015).)

The Ninth Circuit determined that the exception applied because all five causes of action alleged in the plaintiff's class action complaint stemmed from the relationship between the parties created by a series of bonds for which the defendant acted as the fiduciary. Therefore, the court found that it did not have jurisdiction to hear the appeal of the remand order and dismissed the appeal. (782 F.3d at 505.)

In addition to expanding federal jurisdiction over traditional class actions, CAFA also allows federal courts to exercise jurisdiction over “mass actions." However, the statute excludes certain types of actions from the definition of a mass action, including where all the claims arise from an event or occurrence in the state in which the action was filed and the injuries were suffered in that state, even if the case would otherwise satisfy CAFA's jurisdictional requirements (28 U.S.C. § 1332(d)(11)(B)(ii)(I)).

In interpreting the local single event exception, the Ninth Circuit did not conform to the interpretation given by its sister circuits and instead expressly split from the US Courts of Appeals for the Third and Fifth Circuits to narrowly construe the statute. The Ninth Circuit held that this exception applies to only a single event or happening rather than to a continuing set of circumstances or a continuous pattern culminating in a single injury-causing event (Allen v. The Boeing Co., No. 14-0596, , at *6 (9th Cir. Apr. 27, 2015)).

In Allen, the plaintiffs sued The Boeing Company and its environmental remediation contractor in Washington state court, claiming that Boeing's use of hazardous solvents at a manufacturing plant for over 40 years contaminated the plaintiffs' groundwater and damaged their properties (, at *1).

The Ninth Circuit vacated the district court's remand order and found that the local single event exception did not apply, reasoning that:

(, at *4-7.)

With this decision, the Ninth Circuit upheld its previous interpretation of CAFA's local single event exception to federal jurisdiction and declined to adopt competing interpretations. The Third Circuit put forth the broadest definition, which includes a continuing set of circumstances and does not necessarily have a temporal limitation. The Fifth Circuit's definition, narrower than the Third Circuit's but arguably broader than the Ninth Circuit's holding, includes a series of acts that occur over a period time but result in a single happening that allegedly injures the plaintiffs.