August 12, 2014 Articles

Federal Removal More Difficult in Actions Brought by State Attorneys General

The Supreme Court's decision in Mississippi ex rel. Hood v. AU Optronics Corp. has both immediate and potentially far-reaching, indirect effects.

Loriann E. Fuhrer – August 12, 2014

The Class Action Fairness Act of 2005 (CAFA) relaxes the diversity-jurisdiction requirements for class actions and mass actions (as defined in the act). Most notably, CAFA discards the requirement of complete diversity (which is met only where each and every plaintiff is a citizen of a state different from each and every defendant) for the more easily met “minimal diversity” standard (permitting jurisdiction where “any member of a class of plaintiffs is a citizen of a State different from any defendant”). 28 U.S.C. § 1332(d)(2)(A).

In Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736, 187 L. Ed. 2d 654 (2014), the U.S. Supreme Court addressed the question of whether an action brought by a state attorney general seeking restitution on its own behalf and on behalf of “its citizens” constituted a “mass action” removable to federal court under CAFA. In AU Optronics, the attorney general of Mississippi brought suit in state court against manufacturers of liquid crystal displays (LCDs), alleging they violated Mississippi antitrust and consumer protection statutes. In addition to injunctive relief and civil penalties, the State sought “restitution for its own purchases ‘of LCD products and the purchases of its citizens.’” Id. (internal citation omitted). The defendants removed to federal court, arguing the action was either a “class action” or a “mass action” under CAFA.

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