In a unanimous decision penned by Justice Stephen Breyer, the United States Supreme Court last week closed a loophole in the Class Action Fairness Act (“CAFA”) that had been used by plaintiffs’ lawyers to avoid removal of class actions to federal court. Specifically, the Court held that plaintiffs in class actions cannot stipulate to a recovery of less than $5 million in order to avoid meeting CAFA’s amount-in-controversy requirement.

Under CAFA, enacted in 2005, federal courts have original jurisdiction over class actions in which, among other things, the aggregated value of the claims of individual class members exceeds $5 million. …