WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on
May 28 granted a petition for writ of certiorari in a dispute over
whether a state's parens patriae lawsuit may be removed to federal court
as a "mass action" under the Class Action Fairness Act (CAFA) (State of
Mississippi, ex rel. Jim Hood, Attorney General v. AU Optronics Corp., et al.,
No. 12-1036, U.S. Sup.; See May 2013) (lexis.com subscribers may access Supreme Court briefs for this case).
State Court Complaint
The State of Mississippi sued nearly two dozen liquid
crystal display (LCD) companies in the Hinds County, Miss., Chancery Court,
alleging that the defendants' conduct artificially inflated prices, which harmed the consumers, who were forced to pay higher
prices. The defendants removed the case to the U.S. District Court for
the Southern District of Mississippi, claiming that the action was a class
action or a mass action under CAFA.
The state moved to remand the case to state court, and
the District Court granted the motion. The defendants appealed to the
Reversing the District Court's remand order, the
appellate panel opined that not only are there more than 100 consumers,
resulting in more than 100 claims at issue in this case, but that CAFA's
general public exception is inapplicable. "It provides that a suit is not
a mass action if 'all of the claims in the action are asserted on behalf of the
general public (and not on behalf of individual claimants or members of a
purported class) pursuant to a State statute specifically authorizing such
action.' 28 U.S.C. § 1332(d)(11)(B)(ii)(III). But this public
exception does not exempt this case from the CAFA and federal
jurisdiction. The requirement that 'all of the claims' be asserted on
behalf of the public is not met here," Judge E. Grady Jolly wrote for the
However, the panel added that it acknowledged "the
concern that finding the general public exception inapplicable here may render
such statutory exception a dead letter (because finding a suit to be a mass
action negates the possibility of the exception applying), and we welcome
congressional clarification of this issue."
Judge Edith Brown Clement joined in the opinion.
Judge Jennifer Walker Elrod concurred, but only in
judgment. "I concur in judgment because the majority opinion is a fair
application of our binding precedent, namely Louisiana ex rel. Caldwell v.
Allstate Insurance Co., 536 F.3d 418 (5th Cir. 2008). I write
separately, however, to express my concerns with Caldwell. Caldwell's
claim-by-claim approach is problematic when applied to CAFA's 'mass action'
provision in parens patriae suits such as the instant case.
Moreover, and just as troubling, applying Caldwell's reasoning to CAFA's
general public exception may render the exception a dead letter in this
circuit. We should reconsider Caldwell and correct our course in
this area of the law," the judge said.
Mississippi Attorney General Jim Hood filed a petition
for writ of certiorari with the U.S. high court on Feb. 19, claiming
that there were conflicting rulings on the matter in various federal circuit
"This circuit conflict has led to inconsistent
jurisdictional outcomes. Indeed, this circuit conflict is so profound
that cases involving the same claims, arising out of the same conduct
by the very same Defendants have been remanded to state court in the
Fourth, Seventh, and Ninth Circuits, but retained in federal court in the Fifth
Circuit. The Fourth, Seventh, and Ninth Circuits found no federal
jurisdiction; the Fifth Circuit found federal jurisdiction as a CAFA mass
action. Absent review by this Court, federal jurisdiction over state parens
patriae lawsuits will continue to depend entirely on the location of the
federal court to which the suit is removed," Hood argued.
The same question is presented in the certiorari
petition in AU Optronics Corp. v. South Carolina, No. 12-911 (that
petition is still pending). But Hood argued that "the instant petition is
a better vehicle for deciding this question. While the Fifth Circuit's
approach has been disavowed by every other court of appeals to consider the
question, in the decision below, the Fifth Circuit reaffirmed its precedent and
its conflict with three other circuits. The decision in this case
contains a full explication of the Fifth Circuit's views, and all relevant
dimensions of the question are squarely before this Court."
Hood of Jackson, Miss., represents the petitioner.
Christopher M. Curran of White & Case in Washington represents the
respondent, AU Optronics. Scott L. Nelson of Public Citizen Litigation
Group in Washington filed an amicus curiae brief on behalf of Public
Mealey's is now available in eBook
For more information about LexisNexis
products and solutions connect with us through our corporate site.