Where's the Party: Do Class Action Plaintiffs Really Prefer State Courts?

Neil J. Marchand
2009 Social Science Research Network  
of Article Scholars and interest groups have discussed litigants' behavior in the class action context. This paper uses empirical data to determine whether class action plaintiffs actually prefer to litigate their suits in state courts. Despite well-reasoned conjectures on the subject, to date there is a paucity of empirical data on class action litigation, especially at the state court level. This scarcity has thwarted analysis of the likelihood of class certification in the state courts, the
more » ... lass Action Fairness Act of 2005's (CAFA) total impact on the judiciary, and the predictability of class action litigation. This study aims to start filling the void in empirical analysis of class action suits by focusing on one representative state: Michigan. The goal of this empirical analysis is to help inform the larger debates over class action litigation. Four hypotheses are tested. The first hypothesis is whether plaintiffs prefer to file their class action suits in Michigan's state courts. The data in this study shows that plaintiffs prefer to file their labor and civil rights class action suits in Michigan's federal courts and their contract, consumer protection, property, and tort class action cases in Michigan's state courts. Combined with other data, this suggests that plaintiffs prefer to file class actions based on federal substantive law in federal court and state substantive law in state court. However, this forum selection is disrupted by the presence of a non-resident party because diversity of citizenship provides an alternate basis for federal jurisdiction. The second hypothesis is whether the total amount of class action activity has increased since CAFA's enactment. An alternative hypothesis is whether CAFA is relocating class action activity to the federal courts. The results of this study show that both propositions can be answered in the negative, for total class action activity has decreased and CAFA may have failed to relocate any category of class actions to the federal courts. This finding suggests that CAFA is not fulfilling its purpose of relocating class actions to federal court. This conclusion is qualified, however, by the limitations of the databases used to perform the research.
doi:10.2139/ssrn.1334923 fatcat:mh53gv7z2zbmlcpwhtbn2j4zom