SW Legal studies in Business

Diversity Requirements Must Be Met for Class Action Suit to Be in Federal Court
Description

Appeals court held that for a federal court to have jurisdiction in a class action suit with parties from multiple states, at least one member of the class must claim an amount in controversy in excess of $75,000 or the class fails for purposes of federal jurisdiction.

Topic Court Procedure
Key Words

Jurisdiction; Class Action; Amount in Controversy

C A S E   S U M M A R Y
Facts

Cappuccitti sued DirecTV on behalf of himself and other similarly situated Georgia residents. The suit, brought under the Class Action Fairness Act (CAFA) contended that the cancellation fees charged to DirecTV subscribers, which ranged from $175 to $480, were improper. The suit claimed damages in excess of $5 million for affected members of the class. The suit was originally filed in state court in Georgia. DirecTV, a California company, moved the case to federal court. It asked the court to compel arbitration of the issue, as subscribers’ contracts required arbitration of disputes. The district court refused to compel arbitration. DirecTV appealed.

Decision

Vacated. CAFA provides federal courts with original jurisdiction over class actions in which the amount in controversy exceeds $5 million and at least one plaintiff and one defendant are from different states. The federal district court does not have jurisdiction over this suit because no one member of the class is alleged to have suffered damages in excess of $75,000, as is required for federal diversity jurisdiction. The maximum damage claimed for any member of the class was $480. Since the district court did not have jurisdiction, it cannot accept jurisdiction over the matter.

Citation

Cappuccitti v. DirecTV, ---F.3d--- (2010 WL 2803093, 11th Cir., 2010)

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