9th Circuit Holds that CAFA Cases Remain in District Court after Denial of Class Cert.

In United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union, AFL-CIO, CLC v. Shell Oil Co., --- F.3d --- (9th Cir., Apr. 21, 2010), a union and two employees filed a putative class action against three employers in state court, alleging violation of California's wage and hour laws and the Unfair Competition Law (UCL). The employers removed the action pursuant to the Class Action Fairness Act (CAFA). After denying the plaintiffs' motion for class certification, the district court remanded the case to state court. The employers appealed, and the Ninth Circuit reversed:

Defendants removed this putative class action from state court pursuant to the Class Action Fairness Act of 2005 (CAFA),FN1 28 U.S.C. §§ 1332(d), 1453. After denying class certification, the district court concluded that it no longer had jurisdiction and remanded the case to state court. We accepted defendants' appeal to consider whether the denial of class certification divests federal courts of jurisdiction over cases removed under § 1332(d). Today we join the Seventh and Eleventh Circuits in holding that it does not. If the putative class action was properly removed to begin with, the subsequent denial of Rule 23 class certification does not divest the district court of jurisdiction. The case remains removed and is not to be remanded to state court.