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September 25, 2013

9th Circuit Allows CAFA Sidestep

On Tuesday, the Ninth Circuit Court of Appeals ruled that a mass action against Teva Pharmaceuticals can stay in California state court, reports the American Lawyer.  The U.S. Chamber filed an amicus brief in the case, arguing that the suit should be moved to federal court under provisions of the Class Action Fairness Act. 

But the court decided the plaintiffs should be in control of selecting the forum:

CAFA requires that mass actions be removed to federal court when they are “proposed to be tried jointly.” But when the four plaintiff firms suing Teva asked the California Judicial Council to join their cases into a single proceeding, they emphasized the benefits for discovery and other pretrial issues. That wording was enough to keep them in state court, the Ninth Circuit ruled.

A dissenting judge argued the case is exactly the type designated for federal court, regardless of how the plaintiffs characterized it.

Since it was passed in 2005, plaintiffs’ lawyers have repeatedly tried to bypass provisions of CAFA that require large class actions to be tried in federal court instead of plaintiff-friendly state court.  Recently, the Supreme Court unanimously squashed one such attempt where lawyers promised to seek less than $5 million, the threshold that would move the case to the federal system. 

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