Suits Brought By State AGs Alone Not 'Mass Actions': SCOTUS Sides With 4th, 7th, And 9th Circuits In Clarifying CAFAs Mass Action Requirements
In Mississippi ex rel. Hood v. AU Optronics Corp., No. 12-1036, 2014 U.S. LEXIS 645 (Jan. 14, 2014) the Supreme Court of the United States addressed the circuit split that arose after the 5th Circuit Court of Appeal's holding in Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418 (5th Cir. 2008) that a suit brought by the Louisiana Attorney General qualified as a "mass action" under the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d)(11)(B)(i). The Fourth Circuit, Seventh Circuit, and Ninth Circuit all reached the opposite conclusion. The Supreme Court, resolving the split in favor of the Fourth, Seventh, and Ninth Circuits, held that the mass action provision can only be invoked to remove a case where the case is brought by 100 or more named plaintiffs. Lawsuits brought by state attorneys general in which the state is the only named plaintiff do not qualify as "mass actions."
In 2011, the State of Mississippi sued AU Optronics on behalf of itself and its citizens, alleging violations of the Mississippi Antitrust and Consumer Protection Acts. AU Optronics filed a notice to remove the case to federal court, arguing that the case was removable under either the "class action" or "mass action" provision of CAFA.
The U.S. District Court for the Southern District of Mississippi remanded. The court held the following: (1) the case was not a "class action" as it had not been brought pursuant to Federal Rules of Civil Procedure Rule 23; (2) the case was a "mass action" because 100 or more Mississippi consumers had purchased the LCD screens at issue and were therefore real parties in interest to the State's claim; and (3) the case must nevertheless be remanded because it fell within CAFA's "general public" exception, which excludes from the definition of "mass actions" civil actions "asserted on behalf of the public." The Fifth Circuit agreed with the first two holdings, but reversed on...
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