Class Action Fairness Act (CAFA)
The Class Action Fairness Act (CAFA) is a 2005 federal law that lets larger class actions be heard in federal court and adds checks on class settlements.
Also called: CAFA, Class Action Fairness Act of 2005, CAFA removal
The Class Action Fairness Act (CAFA) is a 2005 federal law that lets larger class actions be heard in federal court and adds checks on class settlements.
What it means
The Class Action Fairness Act of 2005, or CAFA, is a federal law (Pub. L. 109-2) that changed where large class actions are heard and added protections for class members in settlements.
CAFA lets a federal court hear a class action if three things are true. The claims together exceed $5 million. The class has at least 100 members. And at least one class member is from a different state than at least one defendant. Some mostly local cases stay in state court. A company sued in state court can generally move a qualifying case to federal court without the other defendants' consent.
CAFA also adds checks on settlements. The settling company must notify federal and state officials, generally including the U.S. Attorney General, within 10 days after filing a proposed class settlement. The court can't grant final approval until 90 days after they are served. Coupon settlements get extra scrutiny, with attorney fees tied to coupons actually redeemed. And a court can't approve paying some class members more only because they live closer to the court.
What it means for you
CAFA is why a class action that began in state court may end up in federal court. It also affects timing. The court can't grant final approval until 90 days after officials get notice. So final approval can't come right after a deal is filed, which can push payment dates back. Settlement documents often mention a "CAFA notice." That is the notice to officials, not something sent to you. If a settlement pays in coupons or vouchers instead of cash, CAFA's extra scrutiny applies, so look at what form your payment takes before you file.
Example
Say a customer files a class action in state court over a hidden fee charged to two million customers in many states, adding up to well over $5 million. The company moves the case to federal court under CAFA. Years later, the parties file a settlement. The company sends notice to federal and state officials, and the judge waits at least 90 days after they are served before granting final approval.
FAQ
It is the notice a settling company sends to federal and state officials, including the U.S. Attorney General, within 10 days after a proposed class settlement is filed. A court cannot grant final approval until 90 days after the officials are served.
No. The federal-court rules generally need at least 100 class members and more than $5 million at stake, and some mostly local cases stay in state court. Smaller or local class actions are often heard in state court instead.
Related terms
- Class Action Fairness Act of 2005, Pub. L. 109-2 (GovInfo)
- 28 U.S.C. § 1332(d), class action jurisdiction (Cornell Legal Information Institute)
- 28 U.S.C. §§ 1711-1715, class action settlements (Cornell Legal Information Institute)
- 28 U.S.C. § 1453, removal of class actions (Cornell Legal Information Institute)
Updated Oct 18, 2026. Plain-English definitions for general information — not legal or tax advice.