Supreme Court Agrees to Hear Arguments About Class Actions in Case That Started as Collection Suit

What started as a run-of-the-mill collection lawsuit has grown to be a case about the future of class action lawsuits that will be argued before the Supreme Court.

The Supreme Court agreed yesterday to hear arguments in Home Depot USA v. Jackson, in which the do-it-yourself retail giant is seeking to have a class-action lawsuit that was filed  against removed to federal court. The defendant in the case, George Jackson, filed the lawsuit against Citibank, Home Depot and Carolina Water Systems back in 2016, alleging unfair and deceptive trade practices. Originally, Jackson was sued by Citibank for not paying for a water treatment system he purchased from Home Depot using a Citibank-issued credit card.

Jackson’s lawsuit against Home Depot was filed in state court in North Carolina. Home Depot sought to have the case moved to federal court under the Class Action Fairness Act. A District Court and the Fourth Circuit Court of Appeals subsequently denied the petitions to have the case moved to federal court, which lead to the plaintiff seeking an audience before the Supreme Court.

A published report said that companies of all shapes and sizes are facing “class-action sized headaches” if Home Depot’s appeal is not successful.

The Class Action Fairness Act was signed into law in 2005 to prevent forum-shopping by plaintiff’s attorneys at the state court level. The question presented to the Supreme Court is:

Whether an original defendant to a class-action claim can remove the class action if it otherwise satisfies the jurisdictional requirements of the Class Action Fairness Act when the class action was originally asserted as a counterclaim against a co-defendant.