Supreme Court rules state AGs not governed by CAFA regulations

The ruling arises from the case Mississippi ex rel Hood v. AU Optronics Corp.

The U.S. government has attempted to cut back on class action lawsuits through the Class Action Fairness Act (CAFA), but according to the Supreme Court, state attorney general suits are not subject to these restrictions.

In a Jan. 14 ruling, the court unanimously voted in Mississippi ex rel Hood v. AU Optronics Corp. that the suits brought by state attorneys general against businesses for corporate wrongdoing are not restrained by CAFA, which brings all large class action lawsuits to federal court rather than being tried in-state.

Justice Sonia Sotomayor, writing for the unanimous Court, said in the ruling, “According to CAFA’s plain text, a ‘mass action’ must involve monetary claims brought by 100 or more persons who propose to try those claims jointly as named plaintiffs. Because the State of Mississippi is the only named plaintiff in the instant action, the case must be remanded to state court.”

The case in question involved an antitrust suit brought by Mississippi AG Jim Hood against the makers of LCD televisions, whom Hood said had conspired to fix prices. Although many of the individuals in the case had already settled with the manufacturers, Hood decided to bring a case on behalf of the state as well.

The manufacturers argued that under CAFA, they should have the right to move the case out of state court and into federal court. Attorney Christopher Curran had argued that the suit was merely an attempt to “double dip” and said he believed Hood was abusing his office in an attempt to bring a “copycat” lawsuit to the state courts.

However, Hood and the 46 states who backed him have emerged victorious. A ruling on the case itself is expected during summer 2014.

 

InsideCounsel has been following this case from the beginning, both with news and opinion pieces from outside observers:

Mass or morass: When claims are ‘proposed to be tried jointly’ under CAFA’s ‘mass action’ mechanism

Recent DOJ and FTC actions highlight the role of remedies in antitrust matters

Supreme Court case evaluates suits that represent states

Supreme Court considers whether parens patriae can be removed to federal court

Litigation: Examining the scope of CAFA’s general public exception in parens patriae cases

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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