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CLASS ACTIONS: ADAMS V. FEDERAL MATERIALS COMPANY, INC.

12.01.2006

In a case of first impression, Adams v. Federal Materials Company, Inc., Action No. 5:05CV-90-R, a Kentucky federal court ruled that the Class Action Fairness Act (CAFA) can be used to remove an action from state to federal court by a defendant who is added to the lawsuit after CAFA was enacted (even though the other two defendants were sued prior to the enactment of CAFA). CAFA makes clear that its relaxed removal provisions are only available to actions “commenced” after CAFA was enacted on February 18, 2005. J. Mark Grundy and Brent R. Baughman, Members in our Louisville office, successfully argued to the Court that the civil action commenced against their client when it was brought into the suit, rather than when the initial complaint was filed against the other two defendants. In other words, there should be a different commencement date for a later or newly added defendant. Because Greenebaum’s client was sued after the enactment of CAFA, the client was able to remove the matter to federal court under CAFA. This opinion will certainly assist in situations where plaintiffs rushed to file class action lawsuits prior to the enactment of CAFA, but failed to include certain defendants until after CAFA was enacted.

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