The Supreme Court and CAFA - Take 2

The Supreme Court has granted a certiorari petition in Mississippi v. Au Optronics Corp., S. Ct. Case No. 12-2036, and agreed to decide an issue that will impact the growing number of attorney general civil lawsuits around the country: "[w]hether a state's parens patriae action is removable as a 'mass action' under the Class Action Fairness Act 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."

While most CAFA jurisprudence naturally focuses on class action litigation, CAFA also establishes original and removal jurisdiction with respect to "mass actions," defined as a civil action "in which monetary claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law and fact."  In Au Optronics, the Mississippi Attorney General filed a parens patriae complaint in state court and brought state law claims on behalf of the residents of Mississippi against the defendant.  The defendant removed the action to federal court under CAFA.  The district court determined that the case should be remanded, but the Fifth Third Circuit Court of Appeals reversed, ruling in part that a parens patriae action was a mass action and removable under CAFA.  See Mississippi ex rel. Hood, v. AU Optronics Corp., 701 F.3d 796 (5th Cir. 2012) (affirming Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418 (5th Cir. 2008)).

The Au Optronics opinion, however, conflicts with opinions from the Fourth, Seventh and Ninth Circuit Court of Appeals, which have concluded that a parens patriae action is not a mass action (or a class action) and is therefore not removable under CAFA.

This will be only the second time that the Supreme Court considers CAFA.  Earlier this year, the Supreme Court issued its first opinion related to CAFA and ruled that a damages stipulation by a named plaintiff cannot bind the purported class and defeat removability under CAFA.  See Standard Fire Insurance Co. v. Knowles, 133 S. Ct. 1345 (2013).

This case is likely to generate significant interest, especially from the attorneys general in other states, and will be one of the decisions to watch in the upcoming fall term. 

Blog Contact:  Joseph Callow, Litigation Partner
jcallow@kmklaw.com or 513.579.6419

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