“In One Direction Only”: Chains of Reasoning and Tail Events in CAFA Amount-in-Controversy Claims

Abstract

While the Class Action Fairness Act (CAFA) establishes a bright-line jurisdictional amount in controversy for removing cases from state to federal court, calculating that quantitative threshold in practice is a fraught and heavily litigated exercise. This article examines removals under CAFA to show the substantial lack of clarity in how state-law causes of action and damage claims interact to reach the jurisdictional threshold. It compiles cases illustrating the challenges surrounding removal litigation that flow from these uncertainties, particularly in how the structure of CAFA incentivizes defendants to chain together tail-event precedent to inflate theoretical amounts in controversy. It then applies a Coasean analysis to suggest these uncertainties impede efficient resolutions to litigation. Finally, it suggests a series of practical amendments to CAFA and its interpretive case law that would provide clarity, decrease forum-selection litigation, and enhance the efficacy of class litigation.