The Impact of the Class Action

Fairness Act of 2005

Second Interim Report to the Judicial

Conference Advisory Committee

on Civil Rules

Thomas E. Willging

Emery G. Lee III

Project Team: George Cort, Laural Hooper, Maria Estelita Huidobro, Marie Leary, 

Angelia Levy, Dean Miletich, Robert Niemic, and Nicholle Reisdorff

Federal Judicial Center

September 2006

Thisreport was undertaken at the request of the Judicial Conference’sAdvisory Committee on Civil Rules and is infurtherance of the Center’s statutory mission to conduct and stimulate research and development for the improvement of judicial

administration. The views expressed are those of the authors and not necessarily those of the Federal Judicial Center.
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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Contents

Introduction, 1

Caveat, 1

Summary of Interim Results, 1

Interim Results, 2

Filing trends, 3

Nature of suit, 4

Contract, 4

Tort—personal injury and property damage, 6

“Other” actions, 7

“Other fraud,” 7

Labor, 8

Securities, 9

Civil rights, 10

Basis of federal jurisdiction, 10

Origin of cases, 12

Methods, 13
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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Introduction

At the request of the Judicial Conference Advisory Committee on Civil Rules (acting in consultation with the chairs of the Committees on the Administration of theBankruptcy System,

Court Administration and Case Management, Judicial Resources, Federal–State Jurisdiction,

and Rules of Practice and Procedure), the Federal Judicial Centerhas undertakena long-term

study of the impact of the Class Action Fairness Act of 2005 (CAFA) on the resources of the 

federal courts. 

The following report presents preliminary data on the number, frequency, and types of

class action filing and removal activity in the federal district courts between July 1, 2001, 

through June 30, 2005. We define class action activity to include original federal filings and

removed cases in which class action status is sought at any stage of the proceedings. The 

CAFA study is designed to identify all such cases that are filed in orremoved to federal court

during the four years and beyond. The study includes the 85 districts that use the Case Management/Electronic Case Filing (CM/ECF)system and have created electronic docketing records for cases filed as of July 1, 2001.

This is the second of a series of interim reports to the committee. We expect to presentthe

nextreport in the spring of 2007. At that time, we will analyze data for class actions filedinor

removed to federal district courts between July 1, 2005, and June 30, 2006.

Caveat

The data presented below may differ slightly from data presented in the May 2006 preliminary report and may be revised slightly in later reports. As we update our search of docket

records for class action activity we anticipate identifying cases filed during July 1, 2001, and

June 30, 2005, that had not previously evidenced any such activity. We also expect that further analyses might uncover case events that we were unable to detect during this initial examination, such as cases that were transferred to another district after ourinitial examination

of the docketrecords. Forfurther discussion of such potential updates, see Methods on page

13. 

Summary of Interim Results

Overall, data from 85 federal district courts show a substantial increase in class actionactivity

during the period from January 1, 2001, through June 30, 2005, a time thatspans the February 18, 2005, effective date of CAFA. More to the point, we found a substantial increase in

class action activity during the months following CAFA’s effective date. Because the Act’s

primary goal was to expand federal jurisdiction over state-law class actions, onewouldexpect

CAFA’s impact on class action activity to be concentrated in cases involving state-lawclaims,

especially diversity of citizenship cases, and not in cases involving federal statutory claims.

To distinguish between long-term trends and short-term effects of CAFA, time-series

analysis using ordinary leastsquaresregression (that is, measurement ofrelationships among

variables) was applied to monthly filing and removal numbers overthe entire four years.The

time-series analyses demonstrate that filings and removals in certain types of cases, especially

traditional federal question cases such as labor, civil rights, and securities, were not affected
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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by CAFA, just as one would anticipate. But time-series analyses do indicate a statistically

significant increase in activity, post-CAFA, in diversity of citizenship cases and inremovalsto

federal court, even after controlling forlong-term trends. Indeed, CAFA appears to have reversed long-term downward trends in these types of cases. 

More specifically, data from the 85 courts show the following:

• Class action filings in orremovals to federal district courts post-CAFA brought class

action activity to its highest level during the four-year period. Class actionswere filed

at a rate of 10.48 cases per filing day before CAFA (July 1, 2001, through February 17,

2005) and 11.96 cases per filing day after CAFA went into effect. This difference in

filing rates is statistically significant.

• Increases in class action activity during the post-CAFA period occurred primarily in

the nature-of-suit categories likely to include state-lawclaims: contracts,torts(almost

entirely in property damage and not in personal injury cases), and“otherfraud” cases

(about half of which were based on diversity jurisdiction; many were filed originally

in state courts). Increases in the contracts and fraud cases were statistically significant;

the increase in property damage cases was not statistically significant.

1

• After CAFA, cases based on diversity of citizenship jurisdiction increased from 13%

of all class action filings and removalsto 19% of such cases. The percentage of federal

question cases declined correspondingly. Time-series analysis confirmed that the increase in the number of diversity class actions in federal courts was associated with

CAFA. 

• After CAFA, cases removed from state courts increased from 18% of all class action

activity to 23% of such activity. The percentage of original proceedings filedinfederal

court declined correspondingly. Time-series analysis confirmed that the increase in

the number of class actions removed to federal courts was associated with CAFA.

The Center’s next report will shed additional light on whetherthe trends revealed during

the first 134 days of CAFA’s existence continue.

Interim Results

To identify class actions, the research team examined the dockets of thousands of cases and

detected references to class action activity in 18,811 cases filed in or removed to 85 federal

district courts from July 1, 2001, through June 30, 2005. By eliminating reopened cases and

adjusting for consolidations(both interdistrict and intradistrict)—a combined total of 8,133

cases—we arrived at a total of 10,678 unique or lead class actions filed or removed during

those four-years. See Methods on page 13.

1. Throughout this report we use the term statistically significant to referto differences that are not likely to occur by chance more than once in twenty observations (p < 0.05)).
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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Filing trends

For the analyses in this report, the charts present data measured at six-month intervals and

connected graphically by lines. Chart 1 presents data on class action filings orremovalsin 85

federal district courts between July 1, 2001, and June 30, 2005, grouped by nature of suit.

2

CAFA went into effect on February 18, 2005. Filings and removals during the six-month periods ranged from 1,244 to 1,476. The high point was reached between January 1, 2005, and

June 30, 2005, the period that includes CAFA’s effective date. 

Chart 1 reveals an immediate and substantial increase in filings and removals in the types

of cases that are related to CAFA’s purpose of shifting state-law claims to the federal courts.

The data suggest that CAFA has had an immediate effect, and time-series analyses show statistically significant increases in class action filings and removals after the effective date of

CAFA for certain natures of suit. Further testing by adding additional years of activity will

enable us to learn more about the strength and endurance of the effects observed in this initial period under CAFA.

2. We did not include data regarding 21 counseled general habeas corpus actions; because of the small number

of such cases, they are difficult to show in a chart with the other nature of suit categories.
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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We detected a difference in pre- and post-CAFA filing and removal rates overthe 913 days

on which at least one class action was filed or removed before CAFA (July 1, 2001–February

17, 2005) and the 93 such days after CAFA. Before CAFA, attorneys filed class actions in or

removed them to federal courts at a rate of 10.48 cases per day. After CAFA, attorneys did so

at a rate of 11.96 cases per day. The difference is statistically significant.

Nature of suit

The series of charts beginning with Chart 2a presents class action filing data for varioustypes

of cases during the four years. We collapsed all cases into six groups: (1) contracts, (2) personal injury/property damage, (3) “other” (a residual category including federal and state

statutory actions and common-law fraud cases), (4) labor, (5)securities, and (6) civil rights. 

The groups of cases are based on nature of suit classifications identified by the plaintiff’s attorney at the time of filing. Similar nature of suit categories, such as “Insurance-contract”

and “Other contract,” were collapsed into the “Contracts” category.

The discussion of the data represented in Charts 2a through 2f focuses on the number of

class action cases filed during the time period after CAFA became effective, that is, February

18, 2005–June 30, 2005. Because CAFA is expected to have the largest impact on state-based

claims filed in state courts (on behalf of classes with at least minimal diversity of citizenship), 

the legislation’s mostsignificant effects will likely be found in the contract(Chart 2a) andtort

(personal injury/property damage) (Chart 2b) cases. As Chart 1 shows, both categories had

relatively low levels of activity throughout the four years. 

Contract

As Chart 2a shows, contract filings and removals increased noticeably during the last sixmonth period. For more than three and a half years before CAFA, contract cases made up

only about 10% of all class action cases. In the four and a half months after CAFA, contract

cases made up 14.5% of class action cases. This change is statistically significant.
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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Time-series analysis of monthly filings in contract cases reveals both an overall downward

trend in the filing and removal of such cases during the four years and an increase in filings

since the effective date of CAFA. Both the overall trend and the post-CAFA effect are statistically significant. In the short run, at least, a measurable increase in contract case class action

activity in the federal district courts is associated with CAFA. If this trend continues, federal

courts will be coping with more contract class actions than in the past.
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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*Note: A substantial portion of the increase in property damage cases in the January-June 2005 period occurredbefore CAFA and was mostly made up of two sets of related cases that were not consolidated or coordinated. Because

the chart is based on data points using six-month intervals, these pre-CAFA class actions should not be confused

with post-CAFA activity.

Tort—personal injury and property damage

As Chart 2b illustrates, personal injury class actions were relatively constant over the four

years, declining slightly after CAFA’s effective date. This finding is notsurprising givenrecent

federal case-law developments. The percentage of property damage class actions was also

relatively constant throughout the four years but increased by lessthan 1% after CAFAwhen

compared with the percentage of property damage class actions filed orremoved in the preCAFA periods. That change is notstatistically significant. Another year of data should clarify

the effect, if any, of CAFA in property damage cases. Time-series analysis of monthly filings

in personal injury and property damage cases confirms the patterns observed in Chart 2b. In

both models, CAFA did not have a statistically significant effect on monthly filings. 
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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“Other” actions

The “other” actions category illustrated in Chart 2c includes a wide range of federalstatutory

actions, including antitrust, RICO, Truth in Lending, Fair Credit Reporting Act, Fair Debt

Collection Practices Act, and “otherfraud” cases as well as a small number of state statutory

actions that do not fit into another nature of suit category. Overall, the percentage of other

actions increased by slightly more than 1% from the pre-CAFA portion of the four-year period to the post-CAFA portion. Surprisingly, time-series analysis reveals a minor butstatistically significant increase in monthly filings and removals in other cases post-CAFA.

“Other fraud”

At least one subclass of the other class actions category increased in a substantively andstatistically significant way. “Other fraud” cases increased from 2% of the pre-CAFA class action

activity to 4% of the post-CAFA activity. Time-series analysis of monthlyfilings andremovals

of “otherfraud” cases confirms a statistically significant post-CAFA increase in such activity.

“Otherfraud” cases appearto include a substantial number of state lawclaims. Slightlymore

than half of such cases asserted diversity of citizenship to be the basis forfederal jurisdiction

and more than 40% were originally filed in state courts. 
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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Labor

Labor cases, which consist primarily of federal Fair Labor Standards Act (FLSA) and Employment Retirement Income Security Act (ERISA) cases, increased somewhat after CAFA

went into effect but not to a statistically significant degree. When compared with the preCAFA periods, labor casesincreased from 26% to 27% of all class actions. Time-series analysis of monthly filings in labor cases indicates that the post-CAFA increase in the filing and

removal of such cases is the result of the overall upward trend in the monthly filings of such

cases over the entire four years and not the effect of CAFA itself. In the course of the four

years studied, labor cases have increased substantially, from 256 cases in the first six-month

period to 407 cases in the most recent period, with most of that increase preceding CAFA.

Though not directly relevant to the purpose of the study, it is interesting to note that FLSA

cases, which are opt-in class actions governed in part by statute, were the largest single category of class actions in the study: 1,975 cases, amounting to 18% of all class actions.
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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Securities

Securities class actions make up the second largest category of class actions in the federal

courts: 1,429 cases (after aggregating many consolidated cases), amounting to 13% of the

cases in the study to date. The percentage of securities cases declined substantially from 14%

of all class actions before CAFA to only 9% after CAFA. This is a noteworthy change in the

composition of class actions filed in orremoved to federal courts. Post-CAFA,securities class

actions represented a smaller share of the federal docket than before, even though the filing

and removal ofsuch caseswasrelatively constant in the last yearstudied. Time-series analysis

of monthly filings in securities cases confirms that CAFA had no impact on the filing and removal of securities cases. The analysis also indicates that the trend in filing and removal of

such cases has been flat during the four years.
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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Civil rights

As Chart 2f shows, civil rights class action cases exhibited a noticeable decline. Before CAFA,

civil rights cases represented 13% of all class actions; after CAFA, civil rights cases represented 11%. Time-series analysis again confirms the trends seen in Chart 2f. There is a statistically significant downward trend in the filing and removal of civil rights cases, nationwide,

during the four years, which was not affected by CAFA. 

Basis of federal jurisdiction

Chart 3 presents the basis of federal jurisdiction for class action cases filed in the 85 federal

district courts during the four years. These data compare federal question jurisdiction with

diversity jurisdiction and exclude any cases in which the basis for jurisdiction was the involvement of the United States as a defendant. Cases in which the United States is a plaintiff,

such as Equal Employment Opportunity Commission actions on behalf of a class of employees, Federal Trade Commission actions, or Securities and Exchange Commissionactions, are

not included in this study because they are not Rule 23 class actions.
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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Chart 3 shows that the vast majority of class actions filed in the 85 federal districts relied on

federal question jurisdiction. CAFA has affected the proportions of those two jurisdictional

bases. In the three and a half years before CAFA, filings and removals based on federal question jurisdiction constituted 87% of all class actions; after CAFA federal question cases constituted 81% of class actions. The data show a corresponding increase in the percentage of

diversity filings after CAFA, from 13% of all class actions before CAFA to 19% after CAFA.

This change isstatistically significant and substantively important.CAFAappearsto have had

an immediate impact on the nature of the class action cases filed in or removed to federal

court.

Time-series analysis of monthly filings and removals of diversity of citizenshipcasesshows

both a statistically significant downward trend in the numbers of such cases over the preCAFA period and a statistically significant increase post-CAFA. Time-series analysis of

monthly filings and removals of federal question cases shows a statistically significantupward

trend in monthly filings and removals of such cases over the entire four years, unaffected by

CAFA. In the short term, then, CAFA has been associated with an upswing in the filing and

removal of diversity of citizenship cases but has not affected the filing and removal of federal

question cases.
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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Origin of cases

CAFA was designed to facilitate removal of class actions with state law claims, particularly

those involving the laws of more than a single state. CAFA eases previous statutory restrictions on removal of cases and gives reason to expect that the number and percentage of cases

that are removed will increase. On the other hand, CAFA makes removal more predictable 

and might encourage plaintiffs’ attorneys to file actions in federal court and avoid any costs

and delays associated with removal. The ultimate question is whether more state-based class

actions end up in federal courts. This appears to be the case as of June 30, 2005.

Chart 4 shows that the vast majority of class actions were filed in 85 federal district courts

as original federal actions, not removals from state courts. (Cases remanded from an appellate court ortransferred from another district or by the Judicial Panel on MultidistrictLitigation were excluded from this analysis.) After CAFA the percentage of removed cases increased from 18% to 23% while the corresponding percentage of original proceedings decreased from 82% to 77%. These changes are statistically significant. Moreover, they are substantively significant because they suggest that CAFA is having its intended effect.

Time-series analysis of removalsindicates both thatthere was an overall downward trend

in the removal of class actions pre-CAFA and that CAFA is associated with a statistically significant increase in removals since February 2005. These findings are similar to those for
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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contract cases and, in terms of the post-CAFA effect, for “other fraud” actions. Not coincidentally, those two categories of cases make up 58.6% of removed actions in the study population. 

Together, data in Charts 3 and 4 indicate that CAFA has had an early impact on the number and percentage of class actions in federal courts that are based on diversity jurisdiction

and on the number and percentage of class actions that are removed to federal court.

As Charts 3 and 4 suggest and underlying data confirm, plaintiffs who file federal question

cases (including, of course, mixed federal question/state law cases)tend to file those claimsin

federal court as original matters (90%). A small minority (10%) were filed in state court and

removed (this study, of course, cannot determine how many cases are filed in state court but

notremoved). By contrast, 40% of the cases in which federal jurisdiction was basedondiversity of citizenship were filed originally in federal court. CAFA both expandedfederal diversity

jurisdiction over class actions and expanded the ability of defendants to remove cases.Inthis

preliminary data it appears that plaintiffs continued to file diversity cases in state courts after

CAFA and defendants removed a considerable number of those cases. Class actions nowsubject to removal under CAFA could also be filed as original actions in federal courts. In phase

two of this study we will examine a sample of case files to determine whether attorneys seem

to be adjusting to CAFA by filing more cases with state-law claims as original actions in federal courts. 

Methods

To identify the population of class action cases, we first used national CM/ECF real-time

back-up databases to identify cases with activities related to class actions. We searched electronically forthe term “class” and eliminated all cases in which the reference was not to class

action activity (for example, references to “first class mail” or “World Class Distributors”).

We also looked in the replication database for a class action flag variable used by the Administrative Office (AO) and some courts to identify class actions at filing andattermination.We

supplemented thatsearch by including cases identified as class actions in the IntegratedData

Base (IDB) maintained by the FJC, based on data provided by the courts to the AO. We also

included all cases identified as class actions by CourtLink, an electronic service produced by

Lexis/Nexis. CourtLink identifies class actions via PACER docketrecords by searching forthe

terms “similarly situated” or “representative of the class” among the parties’ names, in the 

case caption.

We excluded all actions in which there was not an attorney on the plaintiff side of the 

litigation because pro se litigants do not have authority to represent a class. For similar

reasons we also excluded cases dealing with prison conditions. We did not exclude counseled

habeas corpus class action cases, such as those alleging illegal detention or challenging

deportation policies, but the number of such cases is so small that separate analysis is not

warTroanitdeden.tify and eliminate overlapping and duplicative actions, we searched the above

dataset of class action docket records for terms including “consolidate,” “transfer,” “related

case,” “MDL,” “JPML,” “conditional transfer order,” and for variations on those terms.Ifwe

found no such term orif the casewas not consolidated with another, we countedthe case as a

single or “unique” case and included it in the study. For all related and consolidated cases, 
Federal Judicial Center CAFA Progress Report to the Advisory Committee on Civil Rules, Sept. 7, 2006

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both intradistrict and interdistrict(including multidistrict or MDL transfers andinterdistrict

transfers based on an order changing venue), we identified a single “lead” case for inclusion

in the study and identified “member” cases for exclusion. The Clerk of the Judicial Panel on

Multidistrict Litigation (JPML) and his staff 3 provided statistical informationthat allowedus

to double check whether any of the cases we had marked as “unique” were in fact part of an

MDL consolidation. 

As a further check, we eliminated from the database all cases that had been terminated by

transferto another district, whetherfollowing a transfer orderfrom the JPML or an orderto

change venue issued by a district court. Almost all of the latter were “member” cases but we

may find in our updates that some “unique” cases will have been transferred, reducing the

number of unique class actions for these districts.

Overall, the number of unique, lead, and member cases was as follows:

Table 1: Frequency of Lead, Member, and Unique Cases Examined in Study of Class

Action Filings Between July 1, 2001, Through June 30, 2005, in 85 Federal Districts

Class Action Case Filing Frequencies Total Percent

Lead-intradistrict consolidation 1154 6

Lead-multidistrict (JPML) consolidation 155 1

Unique 9,369 50

Subtotal-Cases included in study 10,678 57

Member-intradistrict consolidation 4,938 26

Member-multidistrict (JPML) consolidation 2,964 16

Member-interdistrict transfer by change of venue 231 1

Subtotal-Cases excluded from study 8,133 43

Total number of class action filings 18,811

Table 1 shows that approximately 43% of proposed class actions overlapped with or duplicated other class actions filed in a federal district court.

u

In the spring of 2007 we will present to the committee a report with additional data on class

action filings and removals from July 1, 2005, to June 30, 2006.

3. We are grateful to Jeffrey N. Lüthi, Clerk of the Judicial Panel on Multidistrict Litigation (JPML), andAriana

Estariel and Alfred Ghiorzi of the JPML clerk’s office for their timely and invaluable assistance.
The Federal Judicial Center

Board

The Chief Justice of the United States, Chair

Judge Bernice B. Donald, U.S. District Court for the Western District of Tennessee

Judge Terence T. Evans, U.S. Court of Appeals for the Seventh Circuit

Magistrate Judge Karen Klein, U.S. District Court for the District of North Dakota

Judge James A. Parker, U.S. District Court for the District of New Mexico

Judge Stephen Raslavich, U.S. Bankruptcy Court for the Eastern District of Pennsylvania

Judge Sarah S. Vance, U.S. District Court for the Eastern District of Louisiana

Judge Karen J. Williams, U.S. Court of Appeals for the Fourth Circuit

James C. Duff, Director of the Administrative Office of the U.S. Courts

Director

Judge Barbara J. Rothstein

Deputy Director

John S. Cooke

About the Federal Judicial Center

The Federal Judicial Center is the research and education agency of the federal judicial system. It

was established by Congress in 1967 (28 U.S.C. §§ 620–629), on the recommendation of the Judicial Conference of the United States.

By statute, the Chief Justice of the United States chairs the Center’s Board, which also includes

the director of the Administrative Office of the U.S. Courts and seven judges elected by the Judicial

Conference.

The organization of the Center reflects its primary statutory mandates. The Education Division

plans and produces education and training programs for judges and court staff, including satellite

broadcasts, video programs, publications, curriculum packages for in-court training, and Webbased programs and resources. The Research Division examines and evaluates current and alternative federal court practices and policies. This research assists Judicial Conference committees, who

request most Center research, in developing policy recommendations. The Center’s research also

contributes substantially to its educational programs. The two divisions work closely with two

units of the Director’s Office—the Systems Innovations & Development Office and Communications Policy & Design Office—in using print, broadcast, and on-line media to deliver education

and training and to disseminate the results of Center research. The Federal Judicial History Office

helps courts and others study and preserve federal judicial history. The International Judicial Relations Office provides information to judicial and legal officials from foreign countries and assesses

how to inform federal judicial personnel of developments in international law and other court

systems that may affect their work.

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Washington, D.C. 20002-8003