The Standard Fire Insurance Co. v. Knowles
August 31, 2012
Case #: 11-1450
Court Below: Unpublished (W.D. Ark. 2011).
Full Text Opinion: http://www2.bloomberglaw.com/public/document/Knowles_v_The_Standard_Fire_Ins_Co_No_411cv04044_2011_BL_309519_W
Civil Procedure: Whether a class action plaintiff's stipulation limiting damages to below the federal amount in controversy threshold, made to defeat defendant's right of removal under the Class Action Fairness Act of 2005, is binding on absent class members.
Respondent filed a class action complaint against Petitioner for underpayment of claims for damage to real property covered under an insurance policy issued by Petitioner.
Petitioner removed the case to federal court under the Class Action Fairness Act of 2005 (CAFA) (28 U.S.C. § 1332). Respondent moved to remand to state court by presenting evidence of a stipulation limiting the class’ recovery to within state jurisdictional limits. The district court held that Respondent’s good faith stipulation limiting the aggregate damages of the class to below the state jurisdictional limit of $5,000,000 was binding and granted his motion to remand.
The Court of Appeals for the Eighth Circuit denied Petitioner's request to file an interlocutory appeal and its petitions for rehearing en banc and for panel rehearing, but the Supreme Court granted cert. On appeal, Petitioner argues that allowing a named plaintiff to bind proposed class members to a capped recovery violates due process, offends precedent and contravenes congressional intent and the text of CAFA.