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U.S. Supreme Court to Take Up Class Actions Again
Author: Scarinci Hollenbeck, LLC
Date: June 3, 2013
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Class-action lawsuits continue to dominate the U.S. Supreme Court’s business docket. The justices recently agreed to consider Mississippi v. AU Optronics Corp.
The case involves price-fixing allegations by the Mississippi Attorney General against several electronics companies regarding the sale of liquid-crystal displays. The attorney general filed the lawsuit in state court and seeks to keep it there. Meanwhile, the LCD makers want to remove the case to federal court under the Class Action Fairness Act (CAFA).
As we have previously discussed on this Business Law Blog, the 2005 law gives federal district courts original jurisdiction over class actions in which the matter in controversy exceeds $5 million in sum or value. The goal is to ensure that large class-action lawsuits are decided in federal court and to deter abuse of the class-action process in state courts. To accomplish this goal, when more than $5 million is at stake, the CAFA allows class actions to be removed to federal court, giving defendants the benefit of federal procedural protections.
The question before the Supreme Court is whether Mississippi’s lawsuit is a “mass action” under the CAFA, given that 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 Fifth Circuit Court of Appeals previously ruled that CAFA still applies, adopting a “claim by claim” approach. The court considered not only who filed the suit but also who would benefit. Using this framework, the appeals court concluded that because Mississippi consumers were parties in interest, the case should be removed to the federal court.
The current Supreme Court has been notoriously business friendly, particularly when it comes to class actions. We will be closely tracking this case and will let you know if the trend continues next term.
If you have any questions about this case or would like to discuss the legal issues involved, please contact me, Christine Vanek, or the Scarinci Hollenbeck attorney with whom you work.
- Practices: Litigation, Commercial Litigation - Business Litigation Attorney
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