Mega-fund class action settlements can result in substantial attorneys’ fee awards. However, when a district court judge is confronted with a case that the judge deems “a nuisance case” resulting in a settlement “pretty close to … worthless,” the attorneys’ fee award is very likely going to be minimal, notwithstanding any lodestar calculation plaintiffs’ counsel makes.
As society becomes increasingly litigious, and as plaintiff attorneys market their services more aggressively, class action litigation is posing a rapidly growing threat to businesses in all sectors.
After Citibank filed a debt-collection action against Jackson in state court, Jackson counterclaimed against Citibank and filed third party class action claims against Home Depot and Carolina Water Systems, Home Depot then removed the case to federal court. The district judge remanded the case to state court which the United States Court of Appeals, Fourth Circuit affirmed. Justice Thomas authored the opinion for the five justice majority which affirmed, while Justice Alito wrote a dissenting opinion on behalf of the four dissenting justices.
The Ninth Circuit Clarifies Its Class Action Fairness Act of 2005 (CAFA) Amount in Controversy Removal Rules
Swift Transportation removed plaintiff’s Third Amended Class Action Complaint alleging that the federal court had CAFA subject matter jurisdiction. The district court remanded finding Swift failed to prove the amount in controversy exceeded $5 million. The court ruled that only the amount of attorneys’ fees incurred to the date of removal was part of the amount in controversy. The Ninth Circuit reversed and remanded after concluding that the amount in controversy included all attorneys’ fees which the plaintiff was entitled to recover under the law.
10th Circuit Rules CAFA Jurisdiction Proper—Plaintiff Failed to Prove Home State Exception Applicable
Plaintiff, a royalty owner of Oklahoma natural gas wells, sued for alleged underpayment of royalties. Defendant filed a CAFA removal to federal court. The royalty owner’s motion for abstention or to remand to state court based on the home state exception to CAFA was denied. The 10th Circuit reviewed the record and affirmed. Nichols v. Chesapeake Operating, LLC Plaintiff, a royalty owner in Oklahoma natural gas wells, sued Chesapeake Operating, LLC and Chesapeake Exploration, LLC (Chesapeake) in Oklahoma state court. Chesapeake then removed asserting CAFA jurisdiction because there were at least 100 proposed class members and more than $5,000,000 in controversy. Chesapeake alleged its principal place of business was in Oklahoma and that at least one class member was a Texas citizen.