Standard Fire Ins. Co. v. Knowles
United States Supreme Court
133 S. Ct. 1345 (2012)
Greg Knowles (plaintiff) filed a class action lawsuit against Standard Fire Insurance Company (insurance company) (defendant), alleging that the insurance company failed to compensate homeowners for a general contractor fee when claims were paid. Knowles filed this lawsuit in an Arkansas state court. The proposed class included hundreds and possibly thousands of Arkansas policyholders. The lawsuit stated that Knowles and the class sought to recover damages of less than $5 million. Knowles also attached an affidavit to the complaint that again stipulated that Knowles would not seek damages for the class in excess of $5 million, in the aggregate. The insurance company removed the lawsuit to federal court based on the Class Action Fairness Act (CAFA), which grants jurisdiction of class actions where the total amount in controversy exceeds $5 million dollars. The trial court determined that the claim would likely exceed $5 million but accepted the stipulations of Knowles regarding the amount of damages that would be sought. The trial court remanded the case back to state court. The insurance company appealed the remand order to the United States Court of Appeals for the Eighth Circuit, which declined to hear the appeal. The insurance company then sought review by the United States Supreme Court.
Rule of Law
Holding and Reasoning (Breyer, J.)
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