Document Type

Article

Publication Title

University of Pennsylvania Law Review

Volume

156

Publication Date

2007

Keywords

CAFA, Class Action Fairness Act, class action, claim settlement, class action claim settlement, class action lawyer, class action lawyers

Abstract

Procedural reforms alter litigation options directly, but they alter the litigation landscape in more ways than reformers anticipate. Three years ago, Congress dramatically expanded federal jurisdiction with the Class Action Fairness Act of 2005 (CAFA), a statute drafted with no love for class action plaintiffs' lawyers. Those lawyers have adapted to the statute, in part, by altering their forum-selection and claim-selection strategies. Analysis of these adaptations offers an emerging picture of the statute's impact on class actions and class action lawyers. CAFA's impact on the class action bar deserves particular attention because, although the statute speaks the language of subject matter jurisdiction, its message of mistrust was aimed squarely at the lawyers. The history of recent class action reforms suggests that even if changes are driven by wariness about class action lawyers, the adjustments may have the unintended consequence of strengthening the position of certain of those lawyers. Indeed, data on post-CAFA class action filings suggest that, like the 1995 securities litigation statute, CAFA has shifted class action practice in ways that will strengthen the upper tier of the plaintiffs' class action bar. Part I of this Article shows the extent to which CAFA was motivated by a mistrust of class action lawyers. Part II places CAFA in the context of other recent class action developments. Similar feelings of mistrust motivated many of those developments, yet the changes- particularly those brought about by the PSLRA-brought the unintended consequence of enhancing the power of the strongest class action law firms. Part III looks at data on post-CAFA shifts in class action practice and the effect of those shifts on the class action bar. CAFA has affected not only the division of labor between state and federal courts, but also horizontal forum selection among federal courts and class action claim selection. These changes, taken together, bode well for the same upper echelon of firms that profited from the unintentional impact of prior class action reform.

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