The Supreme Court, stepping into the middle of a multi-state controversy over the prices of liquid crystal displays on electronics products, agreed on Tuesday to clarify the authority of state governments to sue in their own state courts to protect their citizens from alleged price fixing.   The dispute in Mississippi v. AU Optronics Corp. (docket 12-1036) involves a variation on class-action lawsuits, a source of deep fascination for the current Court.

This was one of two new cases the Justices accepted, for hearing and decision in the new Term starting in October.  The other case seeks to clear up a conflict among lower courts on what proof federal prosecutors must offer to gain an added prison sentence for an individual convicted of aiding and abetting the firing of a gun during a drug crime or crime of violence.   That case is Rosemond v. United States (12-895).

The new Mississippi case grows out of a lawsuit that the state government pursued in its own name, but did so on behalf of a large number of consumers in the state.  State officials wanted the case, against a long list of foreign and U.S. producers of liquid crystal displays, to stay in state court, but those companies had it transferred to federal court under the Class Action Fairness Act of 2005.  State officials want it sent back to state court.  (An LCD display is a flat panel that shows figures or numbers on such items as a digital clock, a portable computer, or an appliance.  There has been a flood of litigation claiming an international price-fixing conspiracy among display producers and marketers.)

Congress passed the Class Action Fairness Act in an attempt to curb what it considered to be abuses of the class approach to litigation, in state and local courts.  Congress found that some of those courts were keeping cases of national importance out of federal courts, and sometimes acted in ways that were biased against out-of-state companies.   One of the lawmakers’ concerns was that private attorneys were preventing these cases from being shifted to federal courts, by manipulating who was suing whom in order to defeat federal court jurisdiction.

One of the provisions of the Act allows a class-action lawsuit to be shifted from state to federal court, if any person who is within the class that is suing is from a state different from that of any of the parties who have been sued — a narrow “diversity” jurisdictional basis.

That provision applies not only to class actions as such — that is, a lawsuit in which one or a few individuals go to court to represent a large number who share a common legal grievance — but also to what are called “mass action” lawsuits.   That is defined as any lawsuit in which money damages are sought for one hundred or more individuals, when their legal claims are common to the group.

The state of Mississippi argued in its petition to the Supreme Court that this provision should not apply when a state government has sued in its capacity as the legal protector (parens patriae) for residents living in the state, even though the residents themselves will mainly benefit if the lawsuit is successful.   It interferes with the states’ sovereign powers under the Tenth Amendment, Mississippi argued, to deprive a state of the right to pursue in its own state courts a remedy for residents harmed by illegal actions by corporations.

Mississippi sued the makers of liquid crystal displays under two state laws — one dealing with antitrust violations, one dealing with consumer protection.   But the corporations involved had the case shifted to federal court, and a federal district court judge ordered the case back to a Mississippi state court.

The Fifth Circuit Court overturned that result, and found that the case could proceed in federal court under the 2005 Act.   That is the result Mississippi is challenging in the case.   (While agreeing to hear Mississippi’s plea, the Court took no action on a separate case raising the same issue in a South Carolina dispute — AU Optronics Corp. v. South Carolina, 12-911.  Presumably, that case is being held for the ruling in the Mississippi controversy.)

The other case the Justices accepted on Tuesday involves a federal criminal law that adds an extra ten years or more of prison time to a sentence that an individual receives for a drug crime or crime of violence, if that individual fired a gun during such a crime, or aided and abetted someone else who fired.

That case grew out of a drug deal that fell apart.   An arrangement had been made for the sale of one pound of marijuana at a location in Utah, but when buyers and sellers met, one of the buyers grabbed the marijuana and the two buyers fled.  Shots were fired at them as they fled.

Prosecutors charged that a Texan, Justus C. Rosemond, either had fired the gun himself, or that he aided and abetted someone else in the pursuing car as the shots were fired.  The judge at the trial refused to instruct the jury that it had to find that Rosemond actually took steps to facilitate or encourage the shooting.  It was enough, the judge told jurors, that Rosemond knew that someone had used a gun.    Rosemond was convicted of that and other crimes.   He got a 48-month sentence for the other crimes, but then a ten-year sentence — 120 months — was tacked on mandatorily for the firearm offense.

Rosemond’s petition argued to the Supreme Court that his view of what prosecutors must prove — that is, something more than merely knowing that a gun was used — has been supported by eight federal appeals courts, while the government’s view has been supported in only three appeals courts.

(DISCLOSURE: Rosemond’s lawyer in the case is John P. Elwood, a Washington attorney who writes frequently for this blog.  The author of this post, however, operates independently of any law practice.)

While taking on two new cases for next Term, the Court on Tuesday refused to review a number of significant new cases.  These were the issues of some of those denied cases:

** Whether the state of Indiana violated the terms of the federal Medicaid law by cutting off all funding from state sources, or from federal programs run by the state, for any entity in the state that provided abortions.   The 2011 Indiana law has been blocked by lower courts.  The Justices turned down opposing petitions, by state officials in 12-1039, and by Planned Parenthood-Indiana in 12-1159.  No reason was given for this or other denials.

** Whether, when state governments gain custody of U.S. savings bonds that have reached their maturity date, but which were abandoned by their owners, the states have a legal and constitutional right to use the money behind the bonds to pay state expenses.  Officials of five states have made claims to some $1.6 billion in funds that were invested in now-matured savings bonds.   The case refused to hear the states’ plea in Montana v. U.S. Treasury, 12-926.

** What must employers do to accommodate disabled employees who are unable to perform their assigned job, when someone else on the payroll is more qualified to do the new task.  The Court had agreed to decide this issue in 2007, but that case was settled before a decision could be reached.  The new case denied Tuesday was United Airlines v. Equal Employment Opportunity Commission, 12-707.

Posted in Featured

Recommended Citation: Lyle Denniston, States’ role in mass cases at issue, SCOTUSblog (May. 28, 2013, 2:20 PM), http://www.scotusblog.com/2013/05/states-role-in-mass-cases-at-issue/