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MVA Litigation Blog: U.S. Supreme Court Limited Authority to Remove Class Actions to Original Defendants, Third-Party Counterclaim Defendants May Not Remove Even Under CAFA

August 2019

Charlotte Litigation Member Tony Lathrop’s MVA Litigation Blog post titled, “U.S. Supreme Court Limited Authority to Remove Class Actions to Original Defendants, Third-Party Counterclaim Defendants May Not Remove Even Under CAFA” was published August 23.

The Article

A defendant by any other name does not smell as sweet when it comes to removing class actions from state court to federal court, even under the Class Action Fairness Act of 2005 (“CAFA”). Congress passed CAFA to address perceived abuses in class action litigation and to provide an avenue for defendants to remove class actions filed in state courts to the more neutral ground of the federal court system. But, who can avail themselves of the removal authority provided by CAFA? The U.S. Supreme Court recently held in Home Depot U.S.A. , Inc. v. Jackson, 587 U. S. ____ (2019) that only the party sued by the original plaintiff in a lawsuit, i.e., the original defendant, has the authority to remove a case. A third-party brought into the case by being named as a defendant to a counterclaim (i.e., a third-party counterclaim defendant) may not remove a class action case, even under CAFA. This does not change if the original complaint has been dismissed and the only complaint left in the case is the class action counterclaim. Despite the protections that CAFA was meant to provide, companies easily could find themselves stranded in state court on the other end of a class action third-party counterclaim after Home Depot.

The complete blog post can be viewed here.