Class Action Fairness Act: Requirements, Exceptions and What It Means for You
Reference Guide
The Class Action Fairness Act (CAFA) is the federal law that decides whether a large class action is heard in federal or state court. It covers a class action when the claims together exceed $5 million, the class has at least 100 members, and at least one class member lives in a different state from at least one defendant. It also adds protections that apply to almost every settlement notice you receive. There is no CAFA settlement and nothing to claim — this page explains the law.
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What the Class Action Fairness Act Is
The Class Action Fairness Act of 2005 (Public Law 109-2, Senate bill S. 5) was approved on February 18, 2005. It applies to civil actions filed on or after that date.
Congress wrote its reasons into the law. Its findings say class members were sometimes left with “coupons or other awards of little or no value” while lawyers were “awarded large fees,” that notices were confusing, and that state courts were keeping “cases of national importance out of Federal court.”
The law does two things. It widens federal jurisdiction over interstate class actions (28 U.S.C. 1332(d) and 1453). And it adds a short “consumer class action bill of rights” on settlements (28 U.S.C. 1711–1715). The Federal Judicial Center describes the intent as shifting “some class action litigation from the state courts to the federal courts.”
Case details
Class action fairness act requirements — a federal court has jurisdiction under 28 U.S.C. 1332(d) when all of these are met:
1. Amount: the matter in controversy exceeds $5,000,000, not counting interest and costs. The individual class members’ claims are added together to reach it.
2. Size: the proposed class has at least 100 members.
3. Minimal diversity: any one class member is a citizen of a different state than any one defendant. Ordinary diversity cases need every plaintiff to differ from every defendant and more than $75,000 per claim.
4. Not a government case: CAFA jurisdiction does not apply when the primary defendants are states, state officials or other government entities.
Exceptions that send a case back to state court. A federal court must decline a case when two-thirds or more of the class and the primary defendants are citizens of the state where it was filed (the home-state exception). It must also decline under the local-controversy exception: more than two-thirds of the class are citizens of that state, at least one significant defendant is local, the principal injuries happened there, and no similar class action was filed in the prior three years. Between one-third and two-thirds, the court may decline after weighing listed factors.
Removal. Under 28 U.S.C. 1453(b), any single defendant can move a class action from state to federal court without the other defendants’ consent, even if it is a citizen of that state, and the usual one-year limit on removal does not apply. An order sending the case back to state court can be appealed if the application is made within 10 days, and the court of appeals must generally rule within 60 days.
Mass actions. Cases where monetary claims of 100 or more named people are proposed to be tried together count too — unless all claims arise from a single event or occurrence in the state where the suit was filed.
Status: In Force Since 2005, Shaped by Supreme Court Rulings
Four Supreme Court decisions show how it works in practice:
Standard Fire Insurance Co. v. Knowles (No. 11-1450, March 19, 2013): a plaintiff who sued in Arkansas state court stipulated the class would seek less than $5 million. The Court held that the stipulation “does not defeat federal jurisdiction under CAFA,” because a named plaintiff cannot bind class members before certification.
Mississippi ex rel. Hood v. AU Optronics (No. 12-1036, January 14, 2014): a state suing LCD makers was the only named plaintiff, so the case was not a “mass action” and could stay in state court.
Dart Cherokee Basin Operating Co. v. Owens (No. 13-719, December 15, 2014): a defendant’s removal notice needs only a “plausible allegation” that the amount exceeds the threshold, and “no antiremoval presumption attends cases invoking CAFA.”
Home Depot U.S.A. v. Jackson (No. 17-1471, May 28, 2019): a company brought in through a third-party counterclaim could not remove under 1441(a) or CAFA’s 1453(b); the Fourth Circuit’s ruling was affirmed.
Does CAFA Affect My Case?
If you are a class member, CAFA mostly decides where the case is heard — federal or state court — not whether you are included or how much you get. You do not apply for anything under CAFA.
Where it touches you directly is the settlement. Within 10 days after a proposed settlement is filed, each settling defendant must send notice of it to the appropriate federal official and to the appropriate State official in every state where a class member lives — the official with primary regulatory or licensing authority over the defendant, or the state attorney general if there is none. Final approval cannot come earlier than 90 days after those officials are served. That waiting period is one reason settlement payouts take months; see how long settlements take to pay out.
If that official notice was never served, the law lets a class member refuse to be bound by the settlement, if the class member shows the notice was not provided. The court papers usually confirm service — here is how to find them.
What CAFA Means for Your Payout
Coupon settlements: if class members get coupons, the part of the lawyers’ fee tied to the coupons must be based on the value of coupons actually redeemed — not the face value printed in the settlement (28 U.S.C. 1712).
No net losses: a court may approve a settlement that leaves a class member paying class counsel more than they receive only with a written finding that non-money benefits “substantially outweigh the monetary loss” (28 U.S.C. 1713).
For settlements that are actually paying, see the open class action settlements list.
Class Action Fairness Act Timeline
February 18, 2005 — CAFA Becomes Law
Public Law 109-2 (S. 5) is approved. It applies to civil actions commenced on or after that date.
March 19, 2013 — Standard Fire v. Knowles
The Supreme Court holds a named plaintiff cannot keep a case in state court by stipulating to less than $5 million for the class.
January 14, 2014 — Mississippi v. AU Optronics
A suit with a state as the only named plaintiff is not a CAFA mass action and can remain in state court.
December 15, 2014 — Dart Cherokee v. Owens
A removal notice needs only a plausible allegation of the amount; no presumption against removal applies to CAFA cases.
May 28, 2019 — Home Depot v. Jackson
A third-party counterclaim defendant cannot remove a class action under CAFA’s removal provision.
June 5, 2025 — Federal Judicial Center Study
The FJC publishes a study of appeals of remand orders in CAFA removals from 2014 to 2023.
Three Things to Watch For
Official-sounding law names are easy to borrow. Three patterns tied to CAFA:
“Class Action Fairness Act payment” offers
CAFA is a statute, not a settlement. There is no CAFA fund and no CAFA claim form. A message saying you are owed money “under the Class Action Fairness Act” and asking for bank details or a fee is not from a court administrator.
Fake “attorney general” settlement letters
CAFA requires defendants to notify state officials of settlements — it does not make your attorney general your claims processor. If a letter claims to be from a state official collecting your claim, check it on the attorney general’s own website, not the number in the letter.
Coupons sold as cash
CAFA exists partly because coupon settlements paid lawyers on face value. If a notice promises a big “award,” read whether it is cash or a coupon, and what it takes to redeem it, in the official notice on the court-approved settlement website.
Class Action Fairness Act — Questions People Actually Ask
Short answers to the questions people ask most about this case.
What is the Class Action Fairness Act of 2005?
A federal law approved February 18, 2005 (Public Law 109-2) that moves large interstate class actions into federal court and adds settlement protections for class members, such as limits on coupon settlements and required notice to federal and state officials.
What are the Class Action Fairness Act requirements?
Under 28 U.S.C. 1332(d): the combined claims exceed $5,000,000; the class has at least 100 members; at least one class member is a citizen of a different state than at least one defendant; and the primary defendants are not states or government entities. The home-state and local-controversy exceptions can still send a case to state court.
What are the requirements for a class action under Rule 23?
Federal Rule of Civil Procedure 23(a) requires that the class is so numerous that joining everyone is impracticable, that there are common questions of law or fact, that the representatives’ claims are typical of the class, and that they will fairly and adequately protect the class. CAFA decides which court hears the case; Rule 23 decides whether it can proceed as a class.
What is a class action lawsuit in law?
Under Rule 23, one or more members of a class may sue as representative parties on behalf of all members, if the Rule 23(a) prerequisites are met. Class members are included without signing up and can usually opt out. See our class action lawsuits overview.
Can you file a class action against the government?
CAFA itself does not cover it: its federal jurisdiction does not apply when the primary defendants are states, state officials or other government entities. Whether a state or federal agency can be sued depends on other laws and immunities that this page does not cover — that question needs a licensed attorney.
Can a defendant move my class action from state court to federal court?
Yes, if CAFA’s requirements are met. Any one defendant can remove under 28 U.S.C. 1453(b), without the others’ consent and without the usual one-year limit. In Dart Cherokee (December 15, 2014) the Supreme Court held the notice needs only a plausible allegation that the amount exceeds $5 million.
Can plaintiffs avoid CAFA by asking for less than $5 million?
Not through a pre-certification stipulation. In Standard Fire Insurance Co. v. Knowles (March 19, 2013) the Supreme Court held such a stipulation does not defeat federal jurisdiction, because the named plaintiff cannot bind absent class members.
Why does final settlement approval take at least 90 days?
Under 28 U.S.C. 1715, defendants must notify the appropriate federal and state officials within 10 days after a proposed settlement is filed, and final approval may not be issued earlier than 90 days after those officials are served. The officials get time to review the deal before it binds you.
About This Information
- Editorially Reviewed — Content reviewed for accuracy using published legal research, government data, and verified court records. See our methodology. Reviewed by Leonard Goldberg, Editor · Last updated
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This page is for general information only and is not legal advice. Lawsuit status, eligibility, and compensation can change. Settlement Insight is not a law firm and does not represent any party. Consult a licensed attorney about your specific situation.
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