Kaufman v. Allstate New Jersey Ins. Co., 561 F. 3d 144 (3d Cir. 2009)

Practice Areas: Insurance Coverage and Bad Faith

This appeal addressed the meaning of two provisions within the Class Action Fairness Act of 2005’s local controversy exception.  The plaintiffs, here, filed suit in the Superior Curt against six automobile insurance carriers.  Thereafter, the matter was removed to the United States District Court for the District of New Jersey pursuant to CAFA.  The plaintiffs’ motion to remand the matter based on the local controversy exception was granted.  The defendant auto carriers sought to challenge the District Court’s interpretation of the following two provisions of CAFA–(1) significant basis provision; and (2) the principal injuries provision.  The Court of Appeals rejected the defendants’ interpretation yet vacated in part the judgment of the District Court and remanded the case for the District Court to reconsider its significant basis analysis which erroneously relied on generic market share numbers instead of focusing on the conduct alleged in the Complaint.

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