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As reported in National Law Journal and Corporate Counsel, a unanimous United States Supreme Court held on Tuesday, March 19 in Standard Fire Insurance v. Knowles that plaintiffs’ lawyers in proposed class actions cannot avoid federal courts by promising to seek less than $5 million in damages.  The rationale, wrote Justice Breyer, is “simple” – “Stipulations must be binding.”  Yet, “[a] plaintiff who files a proposed class action … cannot legally bind members of the proposed class before the class is certified.”  The case is a significant victory for defendants who wish to remove class actions filed in state court to federal court, which is generally viewed as more business-friendly.

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