High court rules for insurer in class-action suit
WASHINGTON (AP) — A unanimous Supreme Court on Tuesday rejected efforts by a plaintiff in a class-action lawsuit to keep his claim in state court rather than more business-friendly federal court by limiting the amount of money sought to under $5 million.
The justices threw out a federal appeals court ruling in favor of an Arkansas homeowner who sued his insurer, the Standard Fire Insurance Co. of Hartford, Conn., over the cost of repairing hail damage.
The appeals court sided with the homeowner, Greg Knowles of Miller County in southwestern Arkansas, in allowing the case to go forward in state court because Knowles promised in writing to seek less than $5 million for himself and other Arkansas homeowners insured by Standard Fire.
But Justice Stephen Breyer said for the high court that Knowles could not bind all others who might join the lawsuit to the $5 million limit. A 2005 federal law, the Class Action Fairness Act, allows defendants to transfer class actions involving more than $5 million to federal court.
Breyer noted that the trial judge found that the sum of the damages would have exceeded $5 million, but for the promise.
“And we must decide whether the stipulation makes a difference. In our view, it does not. Our reason is a simple one: Stipulations must be binding,” Breyer said.
Look for expanded coverage in Thursday's print and online editions.