Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Another Petition Asks Supreme Court to Consider Class Action Fairness Act Mass Action Jurisdiction and Resolve Circuit Split, (Feb 27, 2013)

By Jeffrey May, J.D.

The State of Mississippi has asked the U.S. Supreme Court to review a decision of the U.S. Court of Appeals in New Orleans, concluding that the state’s Mississippi Consumer Protection Act (CPA) and Antitrust Act (MAA) claims against manufacturers and distributors of liquid crystal display (LCD) panels qualified as a “mass action” under the Class Action Fairness Act (CAFA) and should be removed to federal court. The appellate court reversed a district court's decision remanding the case to state court (State of Mississippi v. AU Optronics Corp., Dkt. 12-1036).

The State of Mississippi filed its petition for certiorari on February 19, 2013. In its petition, the state asks whether a state's parens patriae action is removable as a “mass action” under CAFA when the state is the sole plaintiff, the claims arise under state law, and the state attorney general possesses statutory and common law authority to assert all claims in the complaint. The state contends that “there is a circuit conflict that 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.”

Mississippi’s lawsuit is one of 13 parens patriae actions brought against the LCD companies for conspiring to fix prices. Other suits were brought by the attorneys general of Arkansas, California, Florida, Illinois, Michigan, Missouri, New York, Oregon, South Carolina, Washington, West Virginia, and Wisconsin. Five attorneys general—from California, Illinois, Mississippi, South Carolina, and Washington—commenced their actions in state courts asserting only state law claims. The defendants removed each of these actions to federal court, and in all five cases, the district court remanded. The only circuit court not to uphold the remand was the Fifth Circuit in the Mississippi action.

Mississippi's petition comes just one month after LCD panel manufacturers and distributors asked the Supreme Court to review a decision of the U.S. Court of Appeals in Richmond, Virginia (699 F.3d 385, 2012-2 Trade Cases ¶78,100), upholding the remand of two lawsuits brought by the State of South Carolina against the firms for conspiring to fix prices in violation of that state’s antitrust law and Unfair Trade Practices Act. In their January 23 petition for certiorari, the LCD panel companies, including AU Optronics and LG Display, contended that removal was proper under CAFA.

At issue in the latest petition is a decision of the Fifth Circuit (701 F.3d 796, 2012-2 Trade Cases ¶78,150), which followed an earlier 2008 Fifth Circuit decision, Louisiana ex rel. Caldwell v. Allstate Insurance Co., 536 F.3d 418, which held that a state's parens patriae action is removable as a mass action under CAFA. The state notes that since that 2008 decision, three circuits have addressed the same question and each has reached the opposite conclusion: Nevada v. Bank of Am. Corp., 672 F.3d 661 (9th Cir. 2012); LG Display Co., Ltd. v. Madigan, 665 F.3d 768, 2011-2 Trade Cases ¶77,686 (7th Cir. 2011); and, most recently, the Fourth Circuit’s decision in AU Optronics Corp. v. State of South Carolina.

Under CAFA, a mass action is a civil action in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the claims involve common questions of law or fact and include an amount in controversy exceeding $75,000. The Fifth Circuit held that, despite the state’s contention that it was the only party in interest, the state and individual citizens who purchased products within Mississippi were the real parties in interest. The variety of allegations demonstrated that the real parties in interest were individual consumers. The court also held that the statutes at issue did not give the state sole authority to recover for injuries suffered by consumers. As a result, the Fifth Circuit found that the suit qualified as a mass action under CAFA.

In its petition, Mississippi argues that the Supreme Court has “consistently held a state’s overall interest in the case it has brought in its name is the determinative inquiry, not who may ultimately benefit from the relief sought.” The state went on to say that, “[e]ven where the state seeks a mix of proprietary relief and relief on behalf of private citizens, a state may sue as the sole plaintiff and real party in interest for purposes of jurisdiction.”

Mississippi also contends that its petition is a better vehicle for deciding the question than the petition of the LCD companies for review of the Fourth Circuit decision. The state’s petition provides a full explication of the Fifth Circuit’s views, the state asserts.

Attorneys: Mississippi Attorney General Jim Hood for petitioner.

Companies: AU Optronics Corp.; LG Display Co.

News: Antitrust