Antitrust Law Daily Wrap Up, ANTITRUST NEWS: High Court lets stand remand of state price fixing suits, (Jan 21, 2014)

By Jeffrey May, J.D.

One week after ruling that a State of Mississippi action against manufacturers of liquid crystal displays (LCDs) for conspiring to fix prices should not have been removed to federal court as a “mass action” under the Class Action Fairness Act (CAFA), the U.S. Supreme Court has rejected the other petition on its docket questioning the impact of CAFA on state antitrust enforcement actions.

The Court today denied a petition for certiorari filed in January 2014 by LCD panel makers AU Optronics Corporation and LG Display Company, seeking review of a decision of the U.S. Court of Appeals in Richmond, Virginia. That decision (699 F.3d 385, 2012-2 Trade Cases ¶78,100) upheld remand of price fixing suits brought by the State of South Carolina (AU Optronics Corp. v. State of South Carolina, Dkt. 12-911).

Left standing is the Fourth Circuit decision, concluding that the State of South Carolina was entitled to remand of the suits because diversity did not exist under either the traditional framework or the minimal diversity requirements of CAFA. CAFA loosened jurisdiction requirements in order for national “class actions” and “mass actions” to proceed in federal courts.

The LCD makers had argued in their petition that the Fourth Circuit’s decision was in conflict with a November 2012 decision of the U.S. Court of Appeals in New Orleans (701 F. 3d 796, 2012-2 Trade Cases ¶78,150), which has now been reversed by the Supreme Court. Unlike the Fifth Circuit, the Fourth Circuit panel held that South Carolina was a real party in interest and, by seeking civil forfeitures and statutory penalties, it was asserting a quasi-sovereign interest—to protect and vindicate the rights of the public in general. South Carolina’s suit did not constitute a mass action under CAFA, since it failed to satisfy CAFA’s numerosity requirement and the minimal diversity required for mass actions under CAFA did not exist, the appellate court ruled.

Specifically, AU Optronics and LG Display had asked the Court whether the citizenship of the persons on whose behalf monetary relief claims are brought by a state may satisfy CAFA’s minimal diversity requirement as set forth in 28 U.S.C. § 1332(d)(2)(A)-(C) and (d)(1)(D) for purposes of mass action jurisdiction under CAFA even if those persons are not named plaintiffs.

Attorneys: Henry L. Parr Jr. (Wyche, P.A.) for AU Optronics Corp. Susan F. Campbell (McGowan Hood Felder LLC) for State of South Carolina.

Companies: AU Optronics Corp.; LG Display Co.

News: Antitrust