Smith v. King-Hagerstown

Public Citizen Litigation Group and co-counsel Scott Borison, a Frederick, Maryland consumer rights lawyer, helped win a significant victory for consumers when a Maryland federal court sent back to a Maryland state court a class action that the defendants had attempted to remove to federal court under the so-called Class Action “Fairness” Act of 2005 (CAFA).

The case, Smith v. King Hagerstown Motors, was brought by a class of consumers in Maryland against a Maryland car dealership and two out-of-state finance companies. The case was based on violations of Maryland state consumer protection laws. Nonetheless, the out-of-state defendants tried to remove the action to federal court. CAFA, however, provides that when more than 2/3 of class members live in the same state as a defendant from whom significant relief is sought (and no similar class actions have been brought recently against the same defendants), a case may not be removed to federal court even if other defendants are from out of state.

In the Smith case, it was agreed by all that at least 2/3 of the class consisted of Maryland citizens, and the complaint clearly sought the same relief from the in-state defendant as from the out-of-state ones. But the out-of-state defendants still claimed that the relief sought from the in-state defendant was not “significant.” The court, however, didn’t buy it.