Forum
U.S. Supreme Court
Case Status
Decided
Docket Number
08-1008
Term
2009 Term
Oral Argument Date
November 02, 2009
Questions Presented
1. Can a state legislature properly prohibit the federal courts from using the class action device for state law claims?
2. Can state legislatures dictate procedure in the federal courts?
3. Could state-law class actions eventually disappear altogether, as more state legislatures declare them off limits to the federal courts?
Case Updates
Supreme Court rules on class actions for statutory penalty cases
March 31, 2010
The Supreme Court held that a New York law barring class actions for statutory penalty cases does not apply in federal courts hearing diversity cases.
U.S. Chamber files amicus brief
September 30, 2009
NCLC urged the Supreme Court to hold that a federal court sitting in diversity jurisdiction must follow state laws regarding the availability of the class action device for state causes of action. In this case, Shady Grove Orthopedic Associates proposed a class action in federal court alleging that Allstate owed statutory interest penalties to the class for failing to timely pay insurance claims. Both the district court and Second Circuit dismissed the class action, because a New York statute barred the class action device in this context.
In its brief, NCLC argued that the Erie doctrine requires federal courts sitting in diversity to apply the New York prohibition on class actions because the availability of the class action device is a substantive rather than procedural rule. NCLC also argued that the Class Action Fairness Act was not intended to provide a forum for class actions that were based on state laws that explicitly preclude the class action device.