The Ninth Circuit Court of Appeals has determined that state attorney general (AG) actions brought on behalf of the state and as parens patriae for state citizens cannot be removed to federal court under the Class Action Fairness Act of 2005 (CAFA). Washington v. Chimei Innolux Corp., No. 11-16862 (9th Cir., decided October 3, 2011).
The decision involved claims filed in state courts by the attorneys general of California and Washington alleging a conspiracy to fix the prices of thin-film transistor liquid crystal display panels resulting in state agencies and consumers paying inflated prices for products, such as TVs and cellphones, containing the panels. The defendants removed the actions to federal court on the ground that consumers were the real parties in interest and thus the parens patriae actions were disguised as class actions which are removable under CAFA. Both district courts granted the states’ motions to remand, and the cases were consolidated on appeal.
According to the Ninth Circuit, CAFA allows the removal of actions filed under Federal Rule of Civil Procedure 23 or a state law or rule that authorizes an action to be brought as a class action. None of the state statutes authorizing the attorneys general to bring a parens patriae action requires that they demonstrate standing through a representative injury or that they obtain certification of a class to recover on behalf of individuals. The statutes also lack “the typical class action requirements of showing numerosity, commonality, typicality, or adequacy of representation.” Finding that the district courts properly remanded the matters to state court, the Ninth Circuit joined the Fourth Circuit, “the only other circuit court to have squarely considered the question,” in concluding that these actions are not covered by CAFA.