On March 19, 2013, the Supreme Court issued an opinion in Standard Fire Insurance Co. v. Knowles, holding that a case can be removed to federal court under the Class Action Fairness Act of 2005 (CAFA) despite a pre-certification stipulation by the named plaintiff to seek less than $5 million in damages.

Generally, CAFA permits class actions to be removed to federal court where both:

To avoid CAFA removal, the named plaintiff in Knowles stipulated that neither he, nor the class he purported to represent, would seek more than $5 million from the defendant. "But for" this stipulation, the class's claims would have exceeded CAFA's $5 million jurisdictional threshold.

The Supreme Court held that the plaintiff's stipulation did not divest the federal district court of subject matter jurisdiction under CAFA. The Court reasoned that pre-certification stipulations simply cannot bind absent class members. Although the named plaintiff would be bound by his stipulation to seek less than $5 million, the same could not be said for the other potential class members. As a result, the possibility remained that the class' claims, in the aggregate, would exceed $5 million, thereby triggering jurisdiction under CAFA.