Class Actions -- 2014

Mississippi v. AU Optronics Corp.   (U.S. Supreme Court)

Removal jurisdiction under CAFA

The Attorney General of Mississippi brought a parens patriae action in state court on behalf of numerous citizens of the state against 22 out-of-state companies for alleged price-fixing in the LCD screen industry. The appeals court ruled that this suit was in effect a mass action, like a class action, that is removable under the provisions of the federal Class Action Fairness Act (CAFA), and that the case should be heard in federal court. CAFA was enacted to allow large cases involving numerous plaintiffs against out-of-state defendants to be transferred, or removed, to a federal court. Federal courts are often viewed as a more neutral judicial forum than some state courts.

The NAM joined with the Access to Courts Initiative, Inc. in an amicus brief urging the Court to recognize that the Constitution established federal courts in part to hear cases between one state and citizens of another (including companies located in other states). There should be no presumption against transferring a mass action case out of state court, and in fact, there should be a presumption in favor of removal under the constitutional structure. An unduly constrained view of federal jurisdiction has helped fuel the litigation explosion of the last fifty years, contributing to the imposition of billions of dollars of costs on American consumers and the loss of hundreds of thousands of American jobs.

The Supreme Court ruled unanimously 1/14/14 that a case like this cannot be removed to federal court because Mississippi was the only plaintiff and the case was therefore not a mass action under CAFA. CAFA allows removal of cases with 100 or more persons, but a state filing suit in a representative capacity is only one plaintiff, even through it represents hundreds of unidentified persons with an interest in the outcome. The Court refused to look behind the pleadings by the state to find out if it was gaming the system, because Congress did not intend for such an inquiry in mass action cases.

Related Documents:
NAM amicus brief  (September 10, 2013)


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