In a boon to defendants seeking to remove cases to federal court under the Class Action Fairness Act (“CAFA”), the Ninth Circuit has overturned a rule requiring defendants to show to a “legal certainty” that the jurisdictional amount in controversy is satisfied when a complaint alleges a lesser amount of damages. 

CAFA authorizes federal jurisdiction over civil class actions when the class has more than 100 members, there is minimal diversity, and the amount in controversy exceeds $5 million.  The claims of individual class members are aggregated to determine whether the jurisdictional threshold is met.  But until last week, Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994 (9th Cir. 2007), required defendants to establish to a “legal certainty” that the amount in controversy exceeded $5 million in order to remove a case when a putative class action complaint alleged damages below that amount.  This rule allowed plaintiffs to avoid federal jurisdiction by artful pleading. READ MORE →