WASHINGTON (Legal Newsline) — The U.S. Supreme Court will decide whether federal courts have jurisdiction over lawsuits filed in state courts by state attorneys general on behalf of consumers.
The court granted a petition for a writ of certiorari in Mississippi ex rel Hood v. AU Optronics Corp., according to a 12-page order list released Tuesday.
Oral arguments will be scheduled for the fall term.
In February, Mississippi Attorney General Jim Hood submitted a petition for a writ of certiorari with the court, arguing that a November ruling by the U.S. Court of Appeals for the Fifth Circuit “warrants plenary review.”
The Fifth Circuit, in its Nov. 21 opinion, ruled that the removal of a lawsuit involving liquid crystal display panels to a federal district court was proper.
In Hood’s lawsuit, several companies from Japan, Korea and Taiwan were accused of fixing prices for thin film transistor LCD panels from 1999 to 2006.
The Fifth Circuit found that the suit qualified as a “mass action” under the Class Action Fairness Act.
The federal statute, passed in 2005, gives federal courts jurisdiction to certain class actions in which the amount in controversy exceeds $5 million, and in which any of the members of a class of plaintiffs is a citizen of a state different from any defendant, unless at least two-thirds or more of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the state in which the action was originally filed.
Business groups and tort reform supporters had lobbied for the legislation, arguing that it was needed to prevent class-action lawsuit abuse.
“After analyzing the complaint, the relevant statutes and the parens patriae authority of the State, we hold that the real parties in interest in this suit include both the State and individual consumers of LCD products. Because it is undisputed that there are more than 100 consumers, we find that there are more than 100 claims at issue in this case. The suit therefore meets the CAFA definition of a ‘mass action,’” Judge E. Grady Jolly wrote for the Fifth Circuit.
Hood, who sued several major suppliers of the LCD panels in Hinds County Chancery Court in March 2011, argues that the suit should remain in a state court. The attorney general says he filed the suit under his parens patriae powers — to protect the physical and economic well-being of the residents of his state.
“First, it is beyond reasonable dispute that the Fifth Circuit’s decision directly conflicts with the decisions of the Fourth, Seventh and Ninth Circuits. The Fifth Circuit’s judgment also conflicts with this court’s precedent regarding the nature of parens patriae actions, the real party in interest test, and the requirement that removal statutes such as CAFA be strictly construed,” Hood wrote in his Feb. 19 petition.
“The decision below involves an important and recurring issue of federal law and runs counter to deeply-rooted principles of federalism. The Fifth Circuit’s decision will result in additional, wasteful jurisdictional battles and administrative complexity. Review by this court is amply warranted.”
Hood noted in his petition that there is a “clear and substantial” circuit split regarding the interpretation of CAFA with respect to parens patriae actions.
In fact, the same question presented is pending before the court in a certiorari petition in AU Optronics Corp. v. South Carolina.
In that case, the U.S. Court of Appeals for the Fourth Circuit held that two lawsuits filed by South Carolina’s attorney general can remain in state court. The LCD makers are appealing the Fourth Circuit’s decision.
Hood, in a recent filing with the Supreme Court, argued that the issue before the court now should be limited to whether the case qualifies as a “mass action.”
“This is the issue at the core of the circuit split,” the attorney general wrote in a 12-page reply brief in support of his petition, filed earlier this month.
Hood added that the court should hold off on ruling in the South Carolina case until a decision is made in his own.
Private firms hired to represent Mississippi in the LCD case are Abraham & Rideout of Greenwood, Miss.; Zimmerman Reed of Minneapolis; and Wise, Carter, Child & Caraway of Jackson.
A. Lee Abraham Jr. donated $1,000 to Hood’s campaign fund in 2011, while three Zimmerman Reed attorneys each gave Hood $1,000 in 2007.
The Zimmerman Reed firm gave Hood $11,250 from 2007-11.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.