In the United States, we have multiple venues for addressing conflicts. Lawsuits that are filed can be handled by either the state or the federal courts or if there is an arbitration agreement preventing use of the courts through a private trial. In general, federal courts only handle large cases that cover multiple states and involve federal statutes or claims of $75,000 of over between citizens of different states or a country. The state courts tend to handle smaller cases in which the dispute is limited to one state. In some instances, a lawsuit may fit the jurisdiction for either state or federal court. In the past, plaintiffs in class action lawsuits could only file non-federal statutory claims only in state court.
In order to federalize most class actions, the Class Action Fairness Act (CAFA) was passed in 2005. This law allows defendants to move a class action lawsuit out of state court and into a federal court if the case meets three requirements: 1) The class must have at least 2 members who are citizens of different states; 2) the amount under dispute must reach at least $5 million; and 3) the class must consist of at least 100 members. If the lawsuit meets all of these criteria, the defendants can file a motion asking for the case to be moved to federal court. Since most federal courts tend to be fairly sympathetic towards defendants in class action lawsuits, this is a common practice for defendants involved in large legal disputes.
Dart Cherokee Basin Operating Company, LLC is currently facing a class action lawsuit from Brandon W. Owens, who alleges that the company underpaid members on royalties from oil wells. The lawsuit (which was filed in state court) alleges that the underpayment constitutes a breach of contract, and is seeking damages, although the complaint did not specify a number for damages.
Dart Cherokee responded by filing to have the case moved to federal court, claiming that the damages at stake exceed $5 million. The Tenth Circuit Court denied the motion, stating that it did so because the oil company failed to provide evidence for their estimated amount of total damages. In doing so, the appellate court deviated from most other federal courts that have dealt with this issue.
The Supreme Court jumped in, and issued a writ of certiorari, meaning that it will review the Tenth Circuit Court’s decision, even though the defendant’s did not have an opportunity to appeal the decision. In reviewing the lower court’s ruling, the Supreme Court will check for any legal errors made, which would have resulted in the order to remand the case back to the state court.
The CAFA is a fairly new law, but the Supreme Court has already dealt with it once in Standard Fire v. Knowles, in which the Court ruled that plaintiffs could not avoid having their case removed to federal court by stipulating that their claims did not reach $5 million.
Once the Supreme Court has ruled in Dart Cherokee Basin Operating Co., LLC v. Owens, it will provide clarity for lower courts as far as the amount of evidence that a defendant must provide when trying to move a class action lawsuit to a federal court.Our Chicago class action lawyers near Wheaton and Woostock bring class action, privacy law and individual consumer rights lawsuits. We bring suit for many types of class action lawsuits for consumer fraud issues and for unpaid overtime, junk fax, junk text messages, privacy rights violations, property damages due to pollution, false advertising and other claims. Super Lawyers has selected our Kane, DuPage and Cook County class action lawyers as among the top 5% in Illinois. Our Chicago class action attorneys only collect our fees if we win or settle your case. For a free consultation call us at our toll free number (833) 306-4933 or contact us on the web by clicking here.