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Class Action Plaintiffs Can’t Hide Amount of Damages to Keep Cases in State Court

Among plaintiffs’ lawyers, California state court is generally the preferred venue for consumer class actions, as state judges and juries are perceived as friendly to consumer plaintiffs. A recent 9th Circuit ruling, however, may make it more difficult for plaintiffs to keep their class actions in state court.

In Kuxhausen v. BMW Financial Services NA LLC, 8:12-cv-00366-AG-JPR, the 9th Circuit found that the plaintiff couldn’t avoid having the case removed to federal court by omitting the amount of damages from the complaint. Under the federal Class Action Fairness Act (“CAFA”), federal courts have jurisdiction over some consumer class actions where the amount in controversy exceeds $5 million. In this case, however, the plaintiff’s complaint failed to allege an amount in controversy, presumably to avoid removal to federal court.

The 9th Circuit held that the defendant’s otherwise untimely removal of the case to federal court was timely, and thus permitted the case to remain in federal court. The Court found that CAFA’s 30-day clock for removal did not begin upon the filing of the complaint because the defendants were entitled to extra time to determine whether it had grounds for removal to federal court.

Moving forward, plaintiffs’ lawyers in consumer class actions should be aware that plaintiffs have a duty to supply detailed information in complaints, particularly in regards to the amount in controversy.