California Toyota Recall Attorney Discusses State versus Federal Class Actions

With numerous lawsuits being filed against Toyota Motor Corporation as a result of the series of recalled announced over the last year, many people may be wondering how the decision is made whether to file a case in State or Federal Court. The rules differ depending on whether you are filing an individual lawsuit or a class action lawsuit. A class action lawsuit is essentially a group of people that have joined together to file suit against a Defendant because they all suffered similar injuries or damages. One of the most common types of class action lawsuits are product liability lawsuits. In the case of Toyota, a number of class action lawsuits have been filed claiming economic losses – all of which have recently been centralized in the U.S. Federal District Court in Torrence, California. Why, however are the cases being heard in Federal Court instead of State Courts?

One of the founding principals of the American legal system is that Plaintiffs (the person that has suffered the injury) can choose the forum for the lawsuit. This was important to the founding fathers to prevent abuses of the legal system by wealthy Defendants simply choosing a favorable court for any lawsuit filed against them thereby all but assuring their victory. The concept of Plaintiff’s choice still exists today, however with a number of exceptions. A class action lawsuit can, in theory, still be filed in State Court. The Defendant then has the option to file a motion to remove the case to federal court. Certain requirements must be met before the Federal Court can grant the motion for removal.

First, with rare exceptions, the case may be removed to Federal Court ONLY if the case could have been filed in Federal Court at the time the request to remove the case was made. This means that the case must meet either the federal question prong or the diversity prong of the federal case test. Cases involving federal questions are generally easily removed as long as all Defendants agree to the removal. Considering that Federal Courts have historically been more favorable to Defendants, this is usually an easy process. Cases involving the diversity prong, however, are not as easy to remove to Federal Court. Under the diversity prong, the Plaintiff and Defendant must be from different states AND the amount in controversy must exceed $75,000. When there are multiple Defendants, or when an argument can be made that the Defendant is a resident of the same state as the Plaintiff (as in the case of a corporation with multiple offices), then removal is more difficult. Plaintiffs are usually successful at objections to removal in these cases. Having said all of that, the Class Action Fairness Act (CAFA) of 2005 made removal to Federal Court a little easier for Defendants. The CAFA basically allows class action cases to be removed to Federal Court if ANY of the Plaintiffs are from a different state than ANY of the Defendants AND the amount in controversy exceeds $5 million. The CAFA was written for cases exactly like the Toyota recall class action cases.

While the CAFA doesn’t make it impossible to object to removal of a case like the Toyota recall class action lawsuits, but it makes it likely that the case will be removed if the Defendant moves for removal even if you do make a timely objection.

If you would like additional information or a free detailed analysis of a Toyota recall case that you may have, please feel free to contact California Toyota recall attorney Emery Ledger online at www.ledgerlaw.com or at his toll-free number – 1-800-300-0001.

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