Under rather unique circumstances, the Third Circuit has held that the prospects for class certification cannot be considered in assessing the $5,000,000 amount in controversy jurisdictional threshold under the Class Action Fairness Act (CAFA). In Hoffman v. Nutraceutical Corp., No. 13-3482 (3d Cir. Apr. 10, 2014), the court rejected the argument of plaintiff Harold Hoffman, who contended that CAFA removal was improper solely because his putative class action could never achieve class certification in federal court under existing Third Circuit law. Third Circuit law does not allow class actions to proceed when the sole class representative is also the sole class counsel. See Kramer v. Scientific Control Corp., 534 F.2d 1085, 1090 (3d Cir. 1976). Hoffman asserted various state law claims relating to the advertisement and quality of a joint pain supplement produced by the defendant and filed them in New Jersey state court as sole class representative and sole class counsel. After removal by the defendant pursuant to CAFA, Hoffman moved to remand on the grounds that the amount in controversy could not exceed the $5,000,000 jurisdictional threshold under CAFA because he could never achieve certification under the Third Circuit’s decision in Kramer, thereby limiting the amount in controversy (at least outside of federal court) to the roughly $200 value of his own individual claim. The Third Circuit reasoned that CAFA plainly requires the calculation of the amount in controversy before making a certification determination, and that “[a] putative class action's prospects for certification are irrelevant to whether federal courts have subject matter jurisdiction over that action in the first instance.”
Prospects for Certification Not to Be Considered for CAFA Amount-in-Controversy Calculation
