The Seventh Circuit recently weighed in on an important jurisdictional issue relating to the Class Action Fairness Act of 2005 ("CAFA"). In Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805 (7th Cir. 2010), the court addressed whether a case that is removed to federal court under CAFA should remain there if class certification is denied. Judge Richard Posner, writing for the court, answered the question affirmatively, concluding that a federal court retained jurisdiction with CAFA even if the class is not certified. Judge Posner based his opinion on CAFA's language and the fact that jurisdiction under the statute "attaches when a suit is filed as a class action, and that invariably precedes certification." 592 F.3d. at 806. As Judge Posner found, this interpretation lead to a better result because if a state had different criteria for certifying a class than Rule 23, the remanded case could "continue as a class action in state court." Id. Such a result also would be contrary to CAFA's intent "of relaxing the requirement of complete diversity of citizenship so that class actions involving incomplete diversity can be litigated in federal court." Id. at 807.
The court's conclusion also is in keeping with the general principle that, once properly invoked, federal jurisdiction is not lost by subsequent developments. In reaching its conclusion the Seventh Circuit joined the Eleventh Circuit in Vega v. T-Mobile USA, Inc., 564 F.3d. 1256, 1268 n. 12 (11th Cir. 2009).
The Cunningham Charter decision is one step toward rationalizing federal court jurisdiction under CAFA. Others are sure to follow.
