On November 6, 2013, the Supreme Court heard argument in Mississippi ex rel. Hood v. AU Optronics Corp., involving the question of whether a state attorney general parens patriae action is removable as a “mass action” under the Class Action Fairness Act (CAFA).
In AU Optronics, the Mississippi attorney general sued LCD panel manufacturers and distributors under state statutes seeking, among other things, restitution for the injuries of individual consumers caused by defendants’ alleged price-fixing. Defendants removed the suit as a CAFA mass action on the theory that those individual consumers, who numbered over 100, were also “real parties in interest.” The district court remanded the case, but the Fifth Circuit reversed the remand order. In light of conflicting authorities involving the very same company and issues in the Fifth and Fourth Circuit, certiorari was granted.
During oral argument, the questioning of Respondent AU Optronics focused on the plain language of CAFA’s mass action provision. CAFA defines mass actions as cases “in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact . . . .” 28 U.S.C. § 1332(d)(11)(B)(i). The State urged that on its face, the mass action definition refers to “plaintiffs” in the plural and thus plainly contemplates a Rule 20/joinder-like “common questions of law and fact” analysis involving multiple named plaintiffs, each with their own claims. In a parens patriae action, the State argued, there was only one plaintiff with one set of claims. In contrast, AU Optronics argued that Congress’ use of the term “persons” versus “plaintiffs” in the statutory language was meant to encompass representative actions where unnamed “persons” are real parties in interest even if not named as nominal plaintiffs. Justices Sotomayor and Kagan took the lead in challenging AU Optronics’ interpretation in this regard. As to the State’s argument, many of the Justices—most notably Chief Justice Roberts—appeared to be troubled by the prospect of double recoveries for harm to consumers because a consumer class action (which included Mississippi residents) involving the same claims as those brought by the Mississippi AG had already settled. The Chief Justice further raised the specter of copycat suits by state AGs around the country following on the heels of successful private consumer actions.
Overall, the justices were split in their questioning. Interestingly, the Court focused much more heavily on the statutory language and not on issues of State sovereignty and the “real parties in interest” question raised in earlier briefing. Depending on the breadth of its reasoning, the Court’s ruling in the case could have significant implications for federal jurisdiction over state attorney general actions and interpretation of CAFA more generally.